His Majesty's Revenue and Customs is facing an uphill battle to convince sole traders to sign up to its Making Tax Digital scheme, despite years of warnings that the rules would change from next month.
This is Money can reveal the digital scheme has seen just 400,000 sign-ups since the start of the current financial year, less than half of the 864,000 required to register by 7 August.
HMRC first announced plans for its digital scheme a decade ago, but it has been plagued with delays and drawn ire from business owners and accountants alike.
Since 2019, MTD for VAT has been mandatory for all VAT-registered businesses, above the £85,000 threshold and those that have voluntarily registered.
The requirement for businesses to keep digital records of all business transactions and submit quarterly statements was broadened to include sole traders and landlords earning over £50,000 from April 2026.
