Taxpayers are being urged to take action as rules tighten around the roll-out of the government’s Making Tax Digital (MTD) scheme.
The call comes from tax experts at HWB Chartered Accountants, based in Chandler’s Ford, who are advising sole traders and landlords to review their registration status to avoid losing control of the process.
Martin Back, tax compliance manager at HWB, said: "Now is an important time for anyone who is required to use MTD but has not yet signed up for the scheme.
"HMRC have said they are proactively signing people up, if they have not taken action themselves.
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"Being signed up by HMRC means you lose the opportunity to take control of the process yourself."
MTD for Income Tax became mandatory in April for sole traders and landlords with qualifying income of more than £50,000.
The threshold will be lowered from April 2027, extending to those with qualifying income of more than £30,000.
Those within scope must keep digital records and submit quarterly updates to HMRC using compatible software.
While HMRC has confirmed there will be no penalty points for late quarterly updates in the 2026/27 tax year, HWB is warning taxpayers not to view this as a grace period.
Mr Back said: "MTD has presented a steep learning curve for taxpayers including some of the smallest businesses in the south.
"The first quarter has brought challenges around registration, software, exemptions and the practicalities of making digital submissions, so the decision to waive penalties for late quarterly updates this year is welcome.
"But the absence of penalties does not mean there are no consequences to delaying.
"Anyone who leaves their submissions until much later risks creating a significant administrative backlog."
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From April 6, 2027, a points-based penalty system will apply, with a £200 fixed penalty once four points have been accumulated.
HWB says taxpayers should take the time now to confirm whether they are in scope, check for any exemptions, and ensure they are using HMRC-recognised software.
He said: "The move to more frequent digital reporting is a significant change, but there are positives.
"Done properly, MTD can give business owners much better visibility of their financial performance and potential tax liabilities throughout the year."
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