Half of taxpayers for Making Tax Digital are unregistered as deadline passes

12:01 AM, 11th August 2026, 13 hours ago

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More than half of the taxpayers required to use Making Tax Digital, including landlords and sole traders, had still not registered as the first quarterly reporting deadline arrived.

That’s according to the Association of Chartered Certified Accountants (ACCA), citing HMRC data.

It shows that just over 400,000 of around 850,000 affected taxpayers had signed up ahead of the 7 August deadline.

Landlords are required to use the system where their combined qualifying income from property and self-employment is more than £50,000 a year.

Under MTD, they must keep digital records and use compatible software to send quarterly updates of their income and expenses to HMRC.

Landlords still face MTD penalties

ACCA’s senior technical advisory manager, Yogesh Dhanak, told Accountancy Today: “While HMRC has confirmed a 12-month soft-landing period where late filing points won’t be issued for these initial quarterly updates, taxpayers must not treat this as a free pass.

“HMRC can still penalise businesses for failing to keep digital records or for deliberately withholding information.”

He also warned against taxpayers submitting nil quarterly updates as placeholders before correcting the figures later.

He explained: “Crucially, submitting ‘nil’ placeholder returns with the intention of fixing the numbers at the end of the year is completely unacceptable.”

First MTD deadline

The first reporting period ran from 6 April to 5 July for most taxpayers, with the first quarterly update due by 7 August.

HMRC has introduced a soft landing for the first year of the new system and will not issue penalty points for late quarterly updates during the 2026/27 tax year.

However, taxpayers must still meet their MTD reporting and digital record-keeping obligations.

ACCA has warned landlords and other affected taxpayers not to assume the first-year concession removes their other obligations under MTD.

ACCA criticises HMRC campaign

ACCA also criticised HMRC over the number of taxpayers who had not registered as the first deadline approached.

Mr Dhanak said the organisation was urging HMRC to provide clarity before imposing penalties.

He also highlighted that the MTD campaign had seen fewer than half of the expected taxpayers register.

HMRC says those affected must use compatible software to maintain their records and submit quarterly updates.

It also warns that quarterly submissions are not additional tax returns and the absence of penalty points during the first year does not remove the requirement to register.