Hundreds of thousands of UK taxpayers, including landlords, have not registered for the HMRC’s Making Tax Digital (MTD) in time.
The Association of Chartered Certified Accountants (ACCA) says some 400,000 taxpayers, including sole traders and landlords, have missed the deadline of Friday, August 7.
Data from HMRC shows that just over 400,000 of the 850,000 mandated taxpayers have signed up.
This leaves more than 50 people of the target group unregistered for the new reporting requirements.
Although the tax authority confirmed a 12-month soft-landing period without late filing points, non-compliant businesses could still risk fines for failing to keep digital records.
Submitting nil placeholder returns with the intention of fixing numbers at year-end is not permitted, as quarterly filings require direct reconciliation with bank feeds.
Software options and rising compliance costs also present operational hurdles for sole traders.
A significant proportion of the nearly 90 approved software products are not yet fully functional for quarterly filing, while lower-cost software often prevents professional agents from verifying data prior to submission.
Yogesh Dhanak, senior technical advisory manager at ACCA, said: “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.
“Crucially, submitting ‘nil’ placeholder returns with the intention of fixing the numbers at the end of the year is completely unacceptable.
“These updates must be fully reconciled transactional submissions tied directly to bank feeds.”
“ACCA believes HMRC must provide urgent clarity on these requirements before any penalties are leveraged.
“The fact that less than half of mandated taxpayers have registered highlights a clear deficiency in HMRC’s awareness campaign, exacerbated by delays in getting official systems and guidance ready.
“If HMRC cannot successfully onboard higher earners now, the problem will severely compound when lower-earning sole traders are dragged into the scheme in 2027/28.
“Taxpayers – backed by qualified accountants – are currently the only ones positioned to navigate these changes successfully.”