You're signing up for Making Tax Digital, whether you want to or not!

Earn over £50,000 as a sole trader or landlord, and not yet signed up for Making Tax Digital (MTD)?

Well, you could be signed up soon, whether you like it, or not.

Tax death star HMRC has just announced that those falling within the scheme, but have yet to register, will be automatically signed up, starting next month.

Latest figures suggest that of the 864,000 who should have signed up, some 570,000 did, although only 436,000 successfully filed quarterly updates.

This means that just over half submitted reports and 66% registered.

Quite why those who registered, but didn't file, is unclear.

But HMRC is determined to ensure that the 34% who didn't register must comply by autumn.

HMRC has said it is happy with the initial reaction although some experts believe the tax authority is moving too fast to get everyone on board.

It all starts in September, when HMRC will sign up those taxpayers for MTD who should have joined earlier this year. This will happen in stages and will only affect those in the first cohort, earning above the £50,000 threshold level.

Once the sign-up process is completed by HMRC on behalf of the taxpayer, they will receive a letter or digital message (depending on their contact preferences) advising them what this means and the next steps they need to take.

Professional advisers are concerned because although the process is being handled by HMRC, they will not automatically update a company's details.

This means potentially companies who changed their circumstances may not have been picked up by HMRC if not separately notified.

Likewise, there may be situations where a taxpayer is exempt from MTD, but HMRC is not aware.

Under MTD, you still file a full tax return once a year, but you also send quarterly updates during the year.

HMRC is keen to point out that the quarterly updates are part of the new process, while the final tax return and payment deadline remains 31 January, after the tax year ends.

Also, the quarterly updates are just summaries of income and expenses submitted to HMRC during the tax year. No tax payments are due resulting from the summaries.

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