2 in 3 taxpayers still not registered for Making Tax Digital for Income Tax
More than 580,000 taxpayers who should already be registered for Making Tax Digital (MTD) for Income Tax have yet to sign up, according to a Freedom of Information (FOI) request submitted by Azets to HMRC.
HMRC's response revealed that while an estimated 864,000 sole traders, self-employed individuals and landlords should have registered for Making Tax Digital for Income Tax from 6 April 2026, only 282,637 had done so. That means almost two-thirds (67%) of those affected remain unregistered.
For many taxpayers, this is a significant compliance risk. While HMRC has confirmed a "soft landing" approach for certain aspects of the first year of MTD for Income Tax, delaying action now could create substantial administrative burdens, future compliance challenges and potential penalties.
What is Making Tax Digital for Income Tax?
Making Tax Digital (MTD) for Income Tax is the biggest change to the Self Assessment system since its introduction in 1997, and impacts sole traders, landlords and the self-employed with qualifying income of over £50,000 in 2026. The new regime requires taxpayers within scope to keep digital records, use HMRC-recognised MTD-compatible software, submit quarterly updates to HMRC and complete an annual Final Declaration. The Final Declaration replaces the traditional Self Assessment tax return.
Why taxpayers need to act now
Fraser Campbell, UK Head of ABAS, explains that many taxpayers may still be unaware of the changes, may have delayed action, or may be assuming they have more time.
However, postponing registration could create significantly more work later.
Those who delay will still need to gather and maintain the digital records required under MTD. If they wait too long, they risk having to catch up on multiple quarterly submissions while also managing ongoing reporting obligations and their year-end declaration.
In practice, this could mean filing several returns within a condensed period, creating avoidable stress, administrative complexity and a greater risk of missing deadlines.
With reporting now required every quarter rather than once a year, establishing compliant processes and software sooner rather than later is critical.
We’re here to help
The latest HMRC data suggests that hundreds of thousands of taxpayers who should already be complying with Making Tax Digital for Income Tax have yet to register.
Whether you are a landlord, sole trader or self-employed professional, taking action now will reduce the risk of future compliance issues and ensure a smoother transition to the new regime.
If you're unsure whether Making Tax Digital for Income Tax applies to you, or need support with registration, software or compliance, get in touch with our MTD specialists today.
