The great Making Tax Digital risk compliance risk – Why are 65 per cent of people still not registered?

From 6 April 2026, it has been mandatory for sole traders, landlords and self-employed individuals with qualifying incomes over £50,000 to register for Making Tax Digital (MTD) for Income Tax.

HMRC took to the stage at Accountex London 2026 to address the issue and change public perception of MTD.

The comments show a potentially casual approach to some filings, but is this reflective of how MTD actually works?

Are people just ignoring Making Tax Digital?

The seismic nature of MTD, upending the way that taxes are filed in a generational shift, cannot be overstated.

The scale of change has caused many to find the scheme too overwhelming and shy away accordingly.

HMRC is aware of this and has made a new attempt to assuage fears that MTD will be a nightmare of administrative burdens throughout the year.

The statements made at Accountex centred on the quarterly updates, with HMRC noting that they should not be seen as additional tax filings.

To emphasise this, the point was made that quarterly updates can be amended or updated later on without issue.

While this casual approach to a core part of MTD might sound positive, it does risk undermining some of the value of the scheme and even introducing separate compliance issues.

How should quarterly updates for Making Tax Digital be handled?

As there are no penalties for MTD for 2026, it will not be until 2027 that we see whether people adopt MTD purely out of fear of getting fined.

For now, the habits built up by the first cohort stand to shape the way that MTD is managed going forward.

While HMRC have announced a fairly casual view of quarterly updates, the proposed penalty scheme further complicates it.

From 2027, missing the deadline for a quarterly update will incur a penalty point – getting four of these will incur a £200 fine.

The risk is that if quarterly updates are viewed so casually, those affected may rush to submit any form of information to dodge a fine without taking the obligation seriously.

While it could stave off penalties in the short term, such an approach will see the annual tax return become more challenging as the months of incorrect or incomplete figures will need to be hastily fixed before a submission can be made.

Is it too late to register for Making Tax Digital?

Technically, those with a qualifying income should have already registered for MTD, but it is not too late for those who have not.

To help with this, it could be worth understanding the value of MTD and how an expert team like ours can reduce the initial stress of shifting to the new way of working.

MTD is supposed to empower you to take control of your finances by giving you a system to regularly monitor and update your financial records rather than getting caught out at the end of the year.

The annual tax return should be a simple process if the data is being cultivated continually rather than amassed in one panicked rush ahead of a single deadline.

As the economy proves ever more erratic, any amount of financial awareness could help you to pivot your plans accordingly – bracing for times of contraction and making the most of opportunities that arise.

Going it along with MTD is not necessary, as our team of professionals can support you in getting set up.

We can help you find out which MTD-compliant software suits your budget and needs so that you can get more confident with your finances.

As deadlines cycle around, we can help you sort through your data to ensure that they are met without needing to compromise on quality.

Non-compliance risks penalties, but will also damage your long-term financial efficiency, as you will not be able to make the most of the value MTD can provide.

While you should have already registered for MTD, the first quarterly update is not until 7 August.

We can help you get everything in order so that the stress of deadline management does not hold you back.

Get in touch with our team to make the most of Making Tax Digital.