Making Tax Digital (MTD) is transforming how UK businesses and individuals report their income to HMRC. Instead of submitting one annual Self Assessment tax return, MTD requires digital record-keeping and more frequent submissions using compatible software.
With MTD for Income Tax Self Assessment (MTD for ITSA) starting from April 2026, many sole traders and landlords will soon need to register for Making Tax Digital and prepare their systems.
In this guide, we’ll walk you through how to sign up for Making Tax Digital, what you’ll need before registering, who can’t sign up, and whether you can join early if you want to get ahead.
Making Tax Digital: A Recap
Making Tax Digital is HMRC’s initiative to modernise the UK tax system by moving businesses onto digital platforms. The goal is to improve accuracy, reduce errors, and make tax reporting more efficient.
Under MTD for Income Tax, affected individuals must keep digital records and submit quarterly updates to HMRC, followed by an End of Period Statement and a Final Declaration each year.
If you’d like a more detailed overview of how MTD works, you can read our full “What Is Making Tax Digital?” guide.
Does My Business Need to Register for MTD?
Whether you need to sign up depends on the type of income you earn and your annual gross turnover.
MTD already applies to VAT-registered businesses. The next phase will apply to self-employed individuals and landlords whose gross income exceeds the relevant threshold.
From April 2026, MTD will apply to those earning over £50,000 from self-employment or property income. This threshold reduces to £30,000 from April 2027, bringing more businesses into scope.
If your income exceeds the threshold, you’ll be legally required to register and comply with MTD rules from the relevant start date.
You can read more about the specific timelines in our “When Does Making Tax Digital Start?” blog.
Who can’t sign up for making tax digital?
Not everyone is eligible to sign up for Making Tax Digital.
Some individuals are either exempt or fall outside the scope of the rules entirely. This can include:
- Certain trustees
- Individuals without a National Insurance Number
- Those who qualify for digital exclusion exemptions
If you believe this may apply to you, we cover exemptions in more detail in our “Who Is Exempt From Making Tax Digital?” guide.
What Do You Need to Register for Making Tax Digital?
Before registering for Making Tax Digital, it’s important to have the right information and systems in place.
HMRC will require details that verify both your identity and your business activities. This typically includes your National Insurance Number, business name and address, and your business start date. You’ll also need to confirm your accounting method, whether you use cash or traditional accounting.
Crucially, you must have MTD-compatible software ready before signing up, as HMRC’s system links directly with your digital records. Without compliant software, you won’t be able to submit updates.
Getting these elements in place beforehand makes the registration process far smoother.
How to Set Up For Making Tax Digital For Your Business?
Registering for MTD is a straightforward process, but it does involve a few key steps:
- Choose and set up MTD-compatible accounting software. This will be used to keep your digital records and submit your quarterly updates.
- Log in to your HMRC online account using your Self Assessment user ID and password.
- Confirm your identity during the registration process, either through the HMRC app or by answering security questions linked to your tax history.
- Follow the on-screen instructions to complete the sign-up process.
- Receive confirmation from HMRC outlining when your MTD reporting obligations will begin.
Many businesses choose to have their accountant manage this process on their behalf, ensuring everything is set up correctly from the outset.
What If I Want to Voluntarily Sign Up Early?
HMRC is allowing some businesses to sign up for MTD voluntarily before it becomes mandatory.
This can be appealing if you want to get comfortable with the system early, spread the workload across the year, or modernise your bookkeeping processes ahead of the deadline.
However, early sign-up isn’t suitable for everyone, and there are eligibility criteria to consider.
Eligibility for Early Sign-Ups
To join MTD early, your tax affairs generally need to be straightforward and up to date.
For example, you’ll usually need to have submitted recent Self-Assessment returns, have no outstanding tax compliance issues, and operate a business structure that falls within the current MTD testing scope.
HMRC reviews eligibility before allowing voluntary registration.
What to Consider Before Signing Up for MTD Early
While early adoption has benefits, it’s important to understand the implications before committing.
You should always inform your accountant first, as signing up changes how your records and submissions are handled. In some cases, you may need to begin digital reporting from an earlier date than expected, which could involve backdating records.
There’s also the risk of penalties if you sign up voluntarily but fail to meet the new reporting requirements. Although you can opt out later in some circumstances, the process isn’t always immediate, so it’s best to be confident before enrolling early.
For many businesses, waiting until mandatory implementation is the more practical route unless there’s a clear benefit to joining sooner.
Get Accounting Support for Making Tax Digital With SwiftBooks
Signing up for Making Tax Digital is only one part of the journey; staying compliant and managing quarterly reporting is where many businesses need ongoing support.
At SwiftBooks Accounting, we guide sole traders and landlords through the full MTD process, from initial registration to software setup and ongoing submissions. We ensure your digital records are accurate, your deadlines are met, and your reporting obligations are handled efficiently.
Beyond compliance, we also help you use your software to gain real-time financial insights, giving you better visibility over cash flow, profitability, and tax liabilities throughout the year.
If you’d like help registering for Making Tax Digital, or want to ensure your business is fully prepared ahead of the deadline, our team is here to support you.
Get in touch today to find out how SwiftBooks can make your move to Making Tax Digital simple and stress-free.