This month HMRC has begun to automatically sign up taxpayers for MTD if they believe they are within scope. 864,000 sole traders and landlords earning over £50,000 a year were expected to sign up and complete the first Making Tax Digital for Income Tax quarterly filing by the first deadline of 7 August. 134,000 of those registered did not complete the first filing and approximately 294,000 remain unregistered.
There are no penalty points for late quarterly updates during the 2026/27 tax year which may be part of the reason for the failure to complete filings on time. From 6 April 2027, a points-based penalty regime will apply. One penalty point for each missed quarterly deadline will be applied and a £200 penalty will be applied once four points are accumulated. As in previous years, missed end-of-year filings will still trigger penalties.
Taxpayers can avoid being automatically signed up by registering now, this will give them time to check their MTD details and prepare before HMRC contacts them. It should be remembered that the income thresholds will decrease in April 2027 from £50,000 to £30,000, bringing more taxpayers into the scope of MTD.
Should you have any queries or receive a letter from HMRC, please get in touch with our Tax Team on 028 9032 3466.