Agent guidance for signing up clients to Making Tax Digital for Income Tax

The government has updated guidance on the sign-up process for Making Tax Digital (MTD) for Income Tax. From 6 April 2026, MTD for Income Tax is mandatory for those with a total annual income from self-employment and property exceeding £50,000. If a taxpayer has not signed up by September 2026, HMRC will begin the process automatically, though agents can manage this on their clients' behalf.

What it means for a practice

• Agents must use the specific agent-only service to sign up clients, rather than the taxpayer's personal sign-up route.
• Ensure client details, including all income sources and business changes, are accurate before signing up, as HMRC-led sign-ups rely only on existing records.
• For the 2026 to 2027 tax year, HMRC will not apply penalty points for late quarterly updates, though penalties for late tax returns or late payments still apply.
• Clients who have ceased all relevant income sources must notify HMRC to avoid being required to use MTD for Income Tax.