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Over half of tax payers still not signed up for MTD

ended 26. June 2026

An analysis of HMRC figures suggests that 100,000 unrepresented tax payers have still not signed up to Making Tax Digital for Income Tax.

Estimates show over half of the 216,000 unrepresented tax payers - that's those who aren't using an accountant or agent to report their figures for them - haven't signed up for the new way of telling HMRC about their income.

The major change requires sole traders and landlords with a turnover above £50,000 to report their income quarterly, rather than once at the end of the year - and use new digital tools to submit their information.

The new rules started in April, and the first reporting deadline is in early August. Whilst HMRC have communicated there are unlikely to be penalties whilst the system is still new - this large number comes the same week at the government reports a significant tax gap from small businesses, the very same people which MTD is most likely to be impacting.

What do newspagers think?

+ Have HMRC dropped the ball on communicating MTD effectively to small businesses?

+ Do the MTD requirements push small businesses too far in asking for them to report quarterly and invest in digital tools to submit their data?

+ Will moving to MTD decrease the tax gap for small businesses, or lead to more errors in reporting and penalties for those least able to afford it?

Source: https://www.litrg.org.uk/press-release/litrg-over-100000-unrepresented-taxpayers-still-register-making-tax-digital

 

2 responses from the Newspage community

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Harvey DhillonVerified
Founder & CEO at Zmartly
The 100,000 who still haven't signed up are the unrepresented taxpayers, the people with no accountant to nudge them, so it is little wonder the message hasn't reached them. It is worth being clear that Making Tax Digital is an administrative change, not a new tax. From 6 April 2026, sole traders and landlords with combined self-employment and property income over £50,000 keep digital records and send HMRC a quarterly summary instead of one annual return. The reporting itself is lighter than many fear; the real hurdle is getting compatible software in place and building the habit. HMRC has sensibly said it won't charge late-update penalties in the first year, and that reassurance deserves to be front and centre. Digital records should reduce careless errors over time, but rushing the least-equipped risks more mistakes, not fewer. If you are over the line, get set up before the early-August update, not in the scramble the night before.
— Harvey Dhillon, ACMA CGMA, founder of Zmartly
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Colette MasonVerified
AI Ethics Consultant at Clever Clogs AI
I can see the benefits of MTD. What gets measured gets managed, and quarterly records should mean fewer nasty surprises in January. Set aside the state micro-surveillance question for a moment, on paper, it makes sense.

But 100,000 people haven't signed up. Is it a Spartacus moment? I'm not filing quarterly. Neither is she. Neither is he. Not because we don't understand. Because we do.

Sole traders and landlords are staring at quarterly deadlines, commercial software nobody asked them to buy, and the free HMRC filing system that 97% of them were happy with binned to make room for it.

Have these people have done the maths and arrived at "No. Enough."? Enough of being the ones who get squeezed while big tech hoovers up entire economies and nobody so much as sends them a sternly worded letter. "You want quarterly compliance from the plumber earning £50,000 gross? Show me you've sent the same energy to the companies whose tax arrangements need a team of forensic accountants to unpick.