So far, more than 436,000 sole traders and landlords have successfully sent their first quarterly update for 2026/2027. Customers who have not yet sent their first quarterly update can do so now, with no penalty for late updates this year.

From September, HMRC will begin signing up customers that need to use Making Tax Digital for Income Tax for the 2026 to 2027 tax year but have yet to do so. It will happen in stages. In total, more than 570,000 customers have now signed up to the service.

Sole traders and landlords earning more than £50,000 have been required to keep digital records and send quarterly updates to HM Revenue and Customs (HMRC) since April 2026, with the first update covering the first 3 months of the tax year.

Craig Ogilvie, HMRC’s director at MTD, said: “It’s fantastic to see so many sole traders and landlords successfully sending their first quarterly updates. This marks an important milestone in the move to a more modern tax system, with many customers telling us that the process is straightforward and works well through their chosen software.

New guidance will be published in late August to explain what customers need to do if they receive a letter from HMRC about being signed up. 

Making Tax Digital for Income Tax is a legal requirement for sole traders and landlords earning more than £50,000 from self-employment and property. Quarterly updates are not tax returns; they are short summaries sent through compatible software and take minutes to complete.

From April 2027, those earning a qualifying income more than £30,000 will be required to do MTD for Income Tax.

ICAS CEO, Gail Boag, said: “HMRC’s latest figures show that more than three-quarters of registered taxpayers have already submitted their first quarterly update, suggesting that those signed up to MTD are engaging with the new system. MTD is one of the biggest changes to the tax system for individuals in business for many years, and this first quarterly update marks the start of a longer transition journey for many taxpayers and agents. In that context, HMRC appears to be positive about the progress made so far.

“However, around one-third of taxpayers expected to be in scope - an estimated 294,000 people - have yet to register. HMRC’s decision to begin enrolling those individuals directly from September reinforces that MTD is here to stay and compliance is not optional.

“We recommend that taxpayers who think they may be affected act now. Signing up voluntarily is likely to give them greater control over the process, particularly where their circumstances have changed since the 2024/25 tax year, and may help avoid unnecessary complications later.”