Accountants warn unrepresented taxpayers of “increased MTD compliance risk” as first deadline looms

Midlands-based accountancy firm, Prime Accountants, warns unrepresented individuals that a lack of support may make Making Tax Digital (MTD) for Income Tax compliance more challenging ahead of the first deadline on 7 August 2026.

All self-employed individuals and landlords with a qualifying income over £50,000 must now keep digital accounting records and submit quarterly reports to HMRC using compliant software.

Paislei Godley, a director at Prime, said: “Despite MTD registration being mandatory from April 2026, there are roughly 111,840 unrepresented landlords and self-employed individuals still left to register.

“The first quarterly update deadline is coming soon and a lack of accountant support could result in an increased MTD compliance risk.”

One of the main areas of concern is that people are not aware that their income falls within the income bracket if they have been managing their finances themselves.

Paislei said: “A significant portion of taxpayers are unaware that they are falling behind, simply because they don’t think the rules apply to them.

“If they are only looking at qualifying income that is coming in now or came in last year, they might not realise they have already crossed the threshold.”

2026 MTD obligations are determined by qualifying income in the 2024/25 tax year, so people have been urged to check their Self Assessment tax return from this time to see if they meet the criteria for the start date.

“Making Tax Digital is introducing a fundamental shift to how tax is managed, requiring digital record keeping and quarterly reporting using compatible software.

“For many, this is adding a layer of complexity that can be difficult to manage without the right support in place.”

Ahead of the changes, accountants at Prime are urging people to register for MTD and get in touch with an accountant.

Paislei said: “There is no benefit to going this alone – MTD is not going away!

“As the threshold for MTD obligations falls to £30,000 in 2027 and £20,000 in 2028, more people will need to work with an accountant to keep up with the new requirements.

“Even knowing which specialised software to use to comply with the quarterly reporting requirements takes expert advice, as HMRC is not providing any for free.

“While HMRC may not be imposing penalties this year, it is still a legal requirement. Ensuring you follow the rules now will save you a much bigger headache when the penalties kick in next year.”