Taxpayers due to join Making Tax Digital (MTD) for Income Tax from April 2026 are being encouraged to sign up sooner rather than later, as concerns grow that many businesses and landlords remain unprepared for the change.
The Institute of Chartered Accountants in England and Wales (ICAEW) says early registration will give taxpayers and advisers more time to adjust to the new system before the first reporting deadlines arrive.
Under the new rules, individuals with combined gross income of more than £50,000 from self-employment and property income during the 2024/25 tax year will be required to use MTD for Income Tax from April 2026.
The rollout will then widen further. Additional taxpayers will be brought into the regime from April 2027 and April 2028, while those not yet required to comply can choose to join voluntarily.
HMRC estimates that around 864,000 taxpayers will fall within the scope of the first phase in 2026. However, according to the ICAEW, only around 280,000 have signed up so far—with approximately 30,000 doing so voluntarily.
The figures suggest a significant number of affected taxpayers have yet to begin preparing, despite the transition representing one of the biggest changes to income tax reporting in recent years.
Under MTD, taxpayers will need to maintain digital records and submit quarterly updates to HMRC using compatible software, replacing the traditional once-a-year self assessment approach for many individuals.
The ICAEW warns that leaving registration too late could create avoidable pressure ahead of the first quarterly filing deadline on 7 August 2026, particularly if technical or administrative issues arise during setup.
For accountants and tax advisers, the concern is not just compliance, but readiness. Businesses unfamiliar with digital bookkeeping or software-based reporting may face a steeper adjustment curve if preparation is delayed.
The message from the profession is increasingly clear: while the deadline may still seem distant, the shift to Making Tax Digital is already underway—and early action is likely to make the transition significantly smoother.
