More than half of the taxpayers mandated to use Making Tax Digital (MTD), including landlords and sole traders, had not registered by the initial quarterly reporting deadline. According to the Association of Chartered Certified Accountants (ACCA), citing HMRC data, just over 400,000 of an estimated 850,000 affected taxpayers had signed up by 7 August.
Landlords with a combined qualifying income from property and self-employment exceeding £50,000 annually are required to use MTD. This involves maintaining digital records and using compatible software to submit quarterly income and expense updates to HMRC.
While HMRC has confirmed a 12-month 'soft-landing' period, meaning late filing points will not be issued for initial quarterly updates during the 2026/27 tax year, taxpayers are still obligated to meet MTD reporting and digital record-keeping requirements. Yogesh Dhanak, ACCA's senior technical advisory manager, warned that HMRC can still penalise businesses for not keeping digital records or for deliberately withholding information. He also stated that submitting 'nil' placeholder returns with the intention of correcting figures later is unacceptable.
ACCA has criticised HMRC regarding the number of unregistered taxpayers, with Mr Dhanak noting that fewer than half of the expected taxpayers had registered. The organisation is urging HMRC to provide clarity before imposing penalties.