Only around one in ten taxpayers expected to join the first wave of Making Tax Digital for Income Tax (MTD IT) have registered so far, just weeks before the system goes live.
Speaking at the Finance, Accounting & Bookkeeping Show (FAB), HMRC MTD specialist Jim Rogers revealed that only 81,000 sole traders, landlords and self-employed taxpayers have signed up. This is out of roughly 864,000 individuals expected to enter the regime from 6 April 2026.
The figures mean around 90% of eligible taxpayers have yet to register. HMRC has also received around 2,200 exemption requests.
So far, only about 4,000 taxpayers have participated in the pilot programme, underlining the scale of the task HMRC faces in raising awareness and encouraging sign-ups before the launch date.
MTD for Income Tax will require individuals with qualifying income above £50,000 to keep digital records and submit quarterly updates through compatible software. The first reporting deadline will be 7 August 2026.
Taxpayers with both trading and property income may need to submit separate updates for each income stream. HMRC does not provide free software for submissions, although bridging tools and commercial platforms can be used.
Several banks are now offering free filing tools to business customers. Providers, including Monzo, Royal Bank of Scotland, Mettle and Starling Bank, are introducing integrated MTD software.
For example, Monzo Business is preparing an HMRC-recognised filing tool built with Sage Embedded Services. Customers will be able to submit quarterly reports directly from their business accounts.
Despite the changes, MTD does not replace the self assessment return. Taxpayers will still need to file their annual return for the 2025/26 tax year by 31 January 2027.
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