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News • August 20th, 2026
|Nearly half of the self-employed individuals, sole traders, and landlords in the UK have missed the first deadline for the new Making Tax Digital (MTD) for Income Tax, according to a recent analysis by Yorkshire accountants Azets. This new system, which was introduced in April 2026, requires taxpayers to submit their tax information quarterly rather than once a year, marking one of the biggest changes to the personal tax system in over three decades.
MTD Deadline Missed
Data from HM Revenue and Customs (HMRC) revealed that only 436,000 taxpayers managed to file their first quarterly update on time by the deadline of August 7, 2026. This represents just 50.5% of the total eligible taxpayers. With over 864,000 people expected to be affected by this initiative, an estimated 428,000 have not met the deadline.
Understanding the Impact
Fraser Campbell, the UK head of accountancy and business advisory services at Azets, highlighted the scale of the issue, stating,
“The number of people who missed the first MTD for Income Tax deadline is greater than the combined populations of Westminster and York.”
This statistic underscores the significant number of individuals struggling to adapt to the new requirements.
Challenges Faced
The transition to MTD has not been smooth for many. Campbell noted several factors contributing to the delays:
Steep learning curve for taxpayers and accountants
Technical issues such as HMRC system downtime
Registration glitches
Managing exemptions and deferrals
Understanding the limitations and requirements of digital submissions
Due to these challenges, HMRC has decided to waive fines for the first year of MTD, which Campbell described as “definitely needed given this learning curve.” However, he cautioned that those who delay their engagement with these requirements may face difficulties in the future. He advised taxpayers to prepare for the upcoming November filing deadline as soon as possible.
Future Filing Implications
For those who postpone their submissions until the 2027 deadline, the consequences could be significant. They may need to catch up on four filings from this year while simultaneously handling next year’s quarterly submissions and their annual declaration. This could lead to a total of nine returns needing to be filed within a single 12-month period.
Benefits of MTD
Despite the initial hurdles, Campbell pointed out the potential advantages of the MTD system. He explained that the new regime should simplify tax planning and forecasting, providing real-time digital information about business performance and projected tax bills. This could greatly assist in discussions with tax advisers and help individuals manage their savings and tax payments more effectively.
Advice for Taxpayers
For anyone unsure about their obligations under MTD, Campbell encourages checking whether they fall within the new reporting requirements. He stressed the importance of using HMRC-compliant software and seeking advice from accountants to navigate this new system effectively. “Becoming compliant isn’t a simple process as getting the filings ready for submission requires accounting knowledge and a lot of diligence,” he added.
Looking Ahead
The MTD for Income Tax is expected to impact 2.9 million people by 2028, introducing a new way of managing tax obligations for many small businesses. As Yorkshire accountants Azets continue to support local businesses in adapting to these changes, it remains crucial for taxpayers to stay informed and proactive in meeting their new obligations.
With the deadline for the next quarterly submission approaching, there is still time for those affected to engage with the MTD system and ensure their compliance. As the transition unfolds, it will be interesting to see how the changes will ultimately benefit both taxpayers and the broader economy.
