More than 580,000 individuals and landlords in the UK have failed to register for HMRC's new Making Tax Digital (MTD) for Income Tax system, with a key deadline just weeks away, according to a Freedom of Information (FOI) request by accountancy firm Azets.
Registration shortfall revealed
HMRC figures show that 864,000 people were required to register for MTD for Income Tax by April 6, 2026. However, as of May 20, only 282,637 had done so, leaving around 581,363 yet to sign up. An updated HMRC statement this week indicated it expects further sign-ups ahead of the August 7, 2026 deadline.
Fraser Campbell, UK head of accounts and business advisory services at Azets, warned: "MTD for Income Tax represents the most significant change in the personal tax system in nearly 30 years – but two-thirds of those who should be registered aren't."
What is Making Tax Digital?
Making Tax Digital replaces the annual self-assessment tax return with four quarterly digital submissions. The system is being phased in, starting with those earning over £50,000 per year from April 2026. By 2028, it is projected to affect 2.9 million people. Eligible individuals must maintain digital records, use MTD-compatible software, and submit quarterly updates plus a final declaration, which replaces the current tax return.
Potential penalties and risks
Campbell noted that while HMRC has said there will be no penalties for missing quarterly returns this year, failing to register now could lead to future stress and fines. "By not registering now and by delaying it further, anyone who is in scope of MTD will need to catch up with this year's four filings at the same time as next year's quarterly filings become due, as well as their annual declaration, so they'll have to potentially file nine returns over the same 12-month period," he said.
An HMRC spokesperson told the Mirror: "Thousands of customers are signing up for Making Tax Digital every week, in line with our expectations, and we expect further increases ahead of the August 7 deadline. We've written to millions of customers and delivered hundreds of events and webinars."
Who needs to register?
Currently, individuals and landlords with gross income above £50,000 per year must comply. The threshold will drop to £30,000 in 2027 and to £20,000 in 2028. Azets advises those affected to check their obligations, ensure software is HMRC-approved, start using MTD-compliant software now, and check for exemptions on the HMRC website or with an advisor.
Campbell added: "Preparation, planning and taking advice at the right time are key for compliance and staying on top of the UK's ever-evolving tax landscape."
