The MTD Registration Gap: 783,000 Taxpayers Still in the Dark

With just three weeks remaining until the biggest shake-up to the UK tax system in a generation, new data from HMRC reveals a startling reality: 90% of those required to join the first wave of Making Tax Digital (MTD) for Income Tax have yet to register.

Of the 864,000 sole traders and landlords earning over £50,000 who are mandated to start quarterly reporting on 6 April, only 81,000 have completed their registration.

A "Worrying" Lack of Awareness

Despite the looming deadline, the transition has seen a remarkably slow uptake. While HMRC has conducted pilot schemes, only 4,000 participants took part in the testing phase. Experts now fear that a lack of government communication has left hundreds of thousands of business owners unaware of their new legal obligations.

If you are a sole trader or a landlord with a turnover exceeding £50,000, you cannot afford to wait. Registration is not automatic—even if you are already registered for Self Assessment or MTD for VAT, you must sign up for this new service manually.

The Risks of Inaction

The move to MTD for Income Tax replaces the single annual tax return with a requirement for four quarterly updates and a final declaration .

For the 783,000 people who have not yet taken action, the risks include:

• Software Bottlenecks: You cannot register without first having HMRC-compatible software in place.
• System Overload: As the 6 April deadline nears, the HMRC registration portal may face significant pressure.
• Reporting Delays: Your first quarterly update is due by 7 August 2026. Missing this because of a registration delay could trigger the new points-based penalty system.

How to Bridge the Registration Gap

At Harris & Co, we are seeing first-hand that many clients feel "digital fatigue." However, the 6 April start date is fixed. To move into the 10% of prepared taxpayers, you should:

1. Check Your Turnover: If your combined self-employment and property income was over £50,000 in the 2024/25 tax year, you are in the first wave.
2. Select Your Software: HMRC will not provide a free tool. You must choose a recognised provider (like Xero or QuickBooks) or use bridging software.
3. Complete the "Handshake": Once registered, you must authorise your software to "talk" to HMRC.

Let Harris & Co Take the Lead

You don't have to be part of the 90% left behind. We specialize in MTD transitions and can handle the registration and software setup on your behalf, ensuring you are compliant before the April deadline.

Contact us today to secure your MTD registration before 6 April