Who can't yet sign up for MTD IT?
Making Tax Digital for Income Tax (MTD IT) becomes mandatory from April 2026 for sole traders and landlords with qualifying income over £50,000. However, HMRC’s current guidance makes clear that not everyone can sign up yet. If you are preparing early, are you actually eligible?
According to HMRC’s sign-up guidance, certain taxpayers are currently excluded from joining MTD IT. These include individuals who:
- are members of a partnership
- are subject to bankruptcy or an individual voluntary arrangement
- have certain complex tax affairs that the system does not yet support
- do not meet the digital and identity verification requirements.
In addition, some taxpayers with particular reporting needs may find that the service cannot yet accommodate their circumstances. HMRC has indicated that functionality is being expanded in stages. If you attempt to sign up and are not eligible, your application will be rejected and you will remain within self-assessment. This does not remove the obligation to join when mandation applies and your circumstances fall within scope. As 6 April 2026 approaches, you should review both your income level and your eligibility under HMRC’s current criteria before attempting to enrol. Checking the guidance in advance can prevent delays and confusion during the transition to digital reporting.
Related Topics
-
Company buying back shares? Watch out for forthcoming changes
Company owners arranging a retirement, a family succession or a shareholder exit may need to rethink how shares are bought back. The Budget confirms that the government intends to tighten the rules distinguishing capital gains from dividend income, potentially making some buybacks considerably more expensive. How might an ordinary business exit be caught?
-
What can you learn from HMRC’s input tax toolkit?
You know that penalties can be charged on careless errors and many mistakes relate to input tax being wrongly claimed. How can HMRC’s input tax guidance help your business to claim the right amount?
-
A £3,000 side-hustle allowance: more generous than it looks?
People making money from small side businesses will have more room to earn without paying income tax, following a Budget decision to triple the trading allowance. However, the figure relates to what you receive before expenses, not the profit you keep. Will the £3,000 allowance actually save you tax?