HMRC spares 661 from Making Tax Digital as rollout nears
The Register
February 20, 2026
AI-Generated Deep Dive Summary
HMRC has exempted 661 individuals from the Making Tax Digital (MTD) scheme as of January 31, with approximately half of the 1,271 exemption applications approved. The scheme requires quarterly software-based reporting for income tax, which applies to around 780,000 sole traders and landlords earning over £50,000 in the 2024-25 tax year. HMRC has processed 881 applications, rejecting 220 and allowing 661 exemptions, particularly for those unable to comply due to age or disability.
The MTD rollout is set to begin in April, requiring quarterly reports through government-approved software instead of annual submissions or paper returns. Over 37,000 individuals have already registered, with more than 13,500 submitting test updates. HMRC emphasizes its collaboration with businesses and software providers to ensure a smooth transition, offering guidance and hosting over 300 events. Affected taxpayers will receive communication via QR codes and URLs linking to explanatory resources on GOV.UK.
HMRC estimates that the transition will cost sole traders and landlords approximately £350 initially, followed by annual costs of £115. While MTD aims to reduce tax errors and improve productivity for businesses, it is expected to generate significant revenue for HMRC in future years. The scheme's long-term benefits are projected to outweigh its substantial upfront costs, including £780 million in additional tax revenue by 2028-29.
Verticals
tech
Originally published on The Register on 2/20/2026