"This marks an important milestone in the move to a more modern tax system."
- Craig Ogilvie - HMRC
436,000 landlords and sole traders have sent off their first Making Tax Digital (MTD) for Income Tax quarterly update for the tax year, following the first deadline last week.
The figure is under half of the 864,000 sole traders and landlords subject to MTD rules, requiring those earning more than £50,000 to keep digital records and send quarterly updates to HMRC.
Over 570,000 customers have signed up for the service, and HMRC will start signing up the rest of those who fall under MTD rules from September.
HMRC has said there won’t be penalties for those who haven’t yet signed up and will be issuing new guidance in late August to explain the sign-up process.
"It’s fantastic to see so many sole traders and landlords successfully sending their first quarterly updates," Craig Ogilvie, HMRC’s director of Making Tax Digital, said. "This marks an important milestone in the move to a more modern tax system, with many customers telling us that the process is straightforward and works well through their chosen software.
"If you haven’t yet signed up, now is the time to do so. Taking action now means you stay in control, can make sure your Making Tax Digital for Income Tax details are correct from the start, and have time to choose the software that works best for you, rather than waiting for HMRC to sign you up from September."
Kenny MacAulay, CEO of Acting Office, commented: "The first wave of Making Tax Digital submissions is an admin nightmare for accountants, spending significant amounts of time handling repetitive questions, chasing for client information and fixing errors. And this is only the start, with HMRC set to sign up the remaining MTD customers in September.
"Accountants must get ahead of the game, putting fast onboarding systems and compliance technology in place to handle the influx, while freeing up time to concentrate on higher-value advisory work, rather than repetitive compliance tasks."
Prashant Ganti, VP of global strategy and alliances, finance and operations BU, Zoho, added: "Making Tax Digital for Income Tax is often viewed as a compliance exercise, but the real opportunity is far greater. It is encouraging a shift from reactive accounting to proactive financial management.
"Sole traders are already preparing themselves to become compliant with the new regulation, but the move away from spreadsheets and paper-based record-keeping is a real challenge for many."
