528k landlords and sole traders not signed up for MTD

Only 336,000 of the first wave of Making Tax Digital (MTD) for Income Tax taxpayers have signed up for the new system as the 7 August deadline for quarterly filing looms, confirmed Craig Ogilvie, director of MTD at HMRC, leaving hundreds of thousands of taxpayers delaying the task.

This means a staggering 61% of the total MTD first cohort of 864,000 landlords, self-employed and sole traders – 528,000 taxpayers – have not signed up.

Despite the huge gap, Ogilvie was upbeat about the numbers in a post on LinkedIn, confirming 336,000 taxpayers have signed up, with around 2,500 registering every week.

‘Now is the time to sign up. Don’t put it off or leave it too late,’ said Ogilvie.

But he did come in for some criticism, with one tax adviser saying, ‘Only more than 60% still to go! Sorry but I'm struggling to see what there is to celebrate when 528,000 out of the mandated 864,000 still haven’t signed up.’

Ogilvie replied, stating ‘I am not celebrating – I am transparently sharing. You and I both know people can sign up before 7 August.

‘We also know some won’t for a range of reasons. We have plans to calmly support and create success. Onwards and upwards.’

HMRC is not running a penalty scheme in the first year of operation so taxpayers will not be financially sanctioned initially for failure to sign up. But this will only be a temporary hiatus.

Last month at Accountex, Jonathan Hawkes, HMRC deputy director of MTD tried to reassure delegates at a seminar, saying: ‘It is all about good enough... We are not expecting perfection.’

However, this will be put to the test in less than 60 days’ time, as on 7 August the deadline to send the first quarterly update will arrive.

HMRC’s last update in May stated there were 303,000 signups, meaning in under a month there were over 33,000 registrations. However, even if this rate of registration keeps up, nearly half a million taxpayers will need to take action.

On the registration figures, Ogilvie said HMRC ‘expect this to rise through late June and July,’ although he did not provide an estimate.

He also confirmed that taxpayers in the original beta trial for MTD which ran last tax year have filed ‘359 end of years for 25-26 from 17 developers’.

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