Making Tax Digital (MTD) for Income Tax is now in effect for the first cohort of affected landlords, sole traders and self-employed individuals.
It is concerning that, a week before its implementation, only 21 per cent of affected taxpayers were registered for MTD.
The real test will be whether everyone who needs to succeed in meeting the first deadline.
Whether you have registered yet or not, we are looking at what you need to do before the first submission.
The first MTD deadline will be 7 August 2026.
By this point, it will be too late to have not got your MTD preparations in order and you will be non-compliant for failing to meet this deadline.
While it might be tempting to ignore the current requirements and focus only on the submission itself, it is best to comply now rather than risk missing the deadline.
The biggest overhaul to tax filings in decades is not something to treat lightly.
Instead, any remaining preparations should be made now so that the first submission is handled as seamlessly as it was intended to be.
While technically only those in the first cohort need to be presently worried about MTD, it would be wise for anyone set to be impacted by MTD to get prepared now.
This means that, alongside those with a qualifying income over £50,000 who are currently obliged to adopt digital record keeping and submit quarterly filings, those with incomes over £30,000 and even over £20,000 would benefit from getting ready now.
The grace period of no penalties for missing deadlines is only in place for the 2026/2027 tax year and will not be extended to subsequent cohorts when they are pulled in.
This means that if you prefer to get stuck in and work out issues as they arise, this is the only year when you can do so without fear of incurring penalties should things go wrong.
If you have concerns or reservations about adopting new software, then voluntarily adopting MTD alongside those for whom it is mandatory can allow you to become confident before your own deadlines begin to matter.
The first penalty will be the regular non-payment penalty before the missed filing penalties take hold from 7 August 2027.
Whether the current MTD obligations affect you or you are due to be pulled in over the coming years, our team can help you prepare.
We can review your current processes and help you establish your MTD-compliant software so that there are no unpleasant surprises waiting for you when the deadlines hit.
Now is the time to check everything is set up and in place before August requires you to take action.
Keep in mind that the first deadline is in the middle of summer, so you may want to handle it ahead of time to avoid cutting into your sunbathing time.
To keep compliant with your Making Tax Digital obligations, speak to our team today.
