UK Trades 2 min read

Two-Thirds of Self-Employed Still Not Registered for Making Tax Digital

What happened

Despite Making Tax Digital for Income Tax (MTD ITSA) going live on 6 April 2026, two-thirds of eligible self-employed taxpayers had still not registered by July, according to accountancy firm Azets citing HMRC figures.

Of the estimated 864,000 sole traders and landlords who should have signed up for the first wave — those earning over £50,000 — only 282,637 had done so. That means roughly 580,000 people are now required to file quarterly digital updates to HMRC but haven't registered for the system.

HMRC has responded by announcing it will automatically sign up eligible taxpayers who haven't registered voluntarily, starting from September 2026. Registration is mandatory even if you didn't receive HMRC's reminder letter.

The next wave — covering those earning between £30,000 and £50,000 — is due to begin in April 2027.

What this means for tradespeople

If you're a self-employed electrician, plumber or builder earning over £50,000 a year, this affects you directly. MTD ITSA means you now need to submit quarterly updates to HMRC using compatible software — such as Xero, FreeAgent or QuickBooks — instead of filing one annual Self Assessment return.

The automatic sign-up means you can't ignore it. If HMRC enrols you and you don't submit your quarterly updates, you could face penalties.

For tradespeople earning between £30,000 and £50,000, you've got until April 2027 — but the Autumn Budget confirmed this threshold, so it's worth getting set up early.

What to do about it

If you earn over £50,000 and haven't registered, do it now at gov.uk. Talk to your accountant about compatible software — many offer free trials and can import your existing records.

If you're under the threshold, use this time to get your record-keeping digital. When your turn comes, the transition will be smoother if you're already tracking income and expenses digitally.

Source: Azets / HMRC

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