Nearly half of the taxpayers required to file under Making Tax Digital for Income Tax missed their first deadline. Azets found that of 864,000 people eligible, only 436,000 filed on time. When a new system trips up that many people at the first hurdle, the fault sits with the system, not the sole traders and landlords trying to use it.
MTD for Income Tax has been live since 6 April 2026 for anyone with qualifying income over £50,000, and it demands something genuinely new: quarterly digital updates through approved software, not the once-a-year Self Assessment routine people have used for decades. Reported HMRC system issues on top of that learning curve made a hard deadline harder. A sole trader running a shop, a trade, or a small practice isn’t failing at tax when they miss this — they’re the ones absorbing the cost of a rollout that wasn’t ready for them.
The real concern is what happens next. From April 2027 the threshold drops to £30,000, pulling in roughly 970,000 more people — many with less spare capacity to absorb a clunky first quarter than the group that’s already struggled. If close to half the current group missed deadline one with software, guidance and reminders in place, the next wave deserves a much smoother on-ramp, not just a bigger mailing list.
If you’re a limited company, MTD for Income Tax doesn’t touch you directly — this is a sole trader and landlord regime. But it’s the same HMRC digital-filing direction of travel businesses of every structure are being pushed down, and a stumble this size is worth watching regardless of which side of the fence you sit on.
If you’re above the £50,000 threshold and haven’t filed yet, don’t wait for the next reminder — check with your accountant or approved software provider now. Is HMRC’s rollout keeping pace with what it’s asking of small businesses, or is this the shape of things to come as the net widens?