After a long period of anticipation, Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) is almost here.
It is estimated that the first wave of MTD ITSA will impact around 864,000 individuals, but fewer than 10 per cent of them have currently registered.
It is worth understanding what might be holding back the remaining 90 per cent of those affected and whether there is time for them to register before the deadline.
What is causing the delay with MTD ITSA registration?
It is entirely possible that the first cohort of people impacted by MTD ITSA fail to see why they should change the way that they manage their finances.
To be required to embrace MTD ITSA in April 2026, sole traders, landlords and self-employed individuals must have had an income (before expenses) of over £50,000 a year in the year ended 5 April 2025.
This is not an amount of money that is typically generated through laziness or a lack of awareness of how to manage money.
As such, many people set to be impacted by the new digital record-keeping requirements and the addition of four more filing deadlines throughout the year may struggle to see why they should bother.
With HMRC delaying the introduction of penalties until 2027, there seems to be a distinct lack of carrot and stick with getting people signed up for MTD ITSA.
This is coupled with general anxieties around digital-only systems, anxieties that will not have been helped by the recent IT breach that saw sensitive data exposed on Companies House.
Why should you register for MTD ITSA?
HMRC tend to frame the registration for MTD ITSA as being something that needs to be done in order to stay compliant.
While this is true, MTD ITSA was designed to be more impactful than that.
At its core, the idea of MTD ITSA is to empower those affected to be more in touch with their finances.
Rather than scrambling around annually to meet the self-assessment deadline, MTD ITSA allows a more organic approach to managing tax filings by having live systems that effortlessly integrate with HMRC.
You should be utilising MTD-compliant software to stay compliant, but this will also give greater visibility than a box full of receipts ever could.
Eventually, there will be penalties for missing the deadline, but that should not be the only reason to adopt MTD ITSA.
If you have any concerns about how to migrate your current systems and practices to a new, compliant format, our team is ready to help you.
Taking the time now to find the right cadence with quarterly filings means that you can relax when the deadlines do come into effect.
Likewise, you may find yourself getting a better grasp on your finances as your visibility improves.
MTD ITSA is starting on 6 April 2026 and taxpayers must be registered before the first quarterly filing can be submitted.
Whatever the reason you finally get MTD ITSA ready, the deadline is coming soon so you can no longer afford to delay.
