In this week’s Enews, we look at estimates of the number of in-scope taxpayers who are yet to sign up for Making Tax Digital. There is a welcome for the phased rollout of payrolling employee benefits and HMRC’s latest guidance for employers to update you on.

• Over 110,000 taxpayers yet to register for MTD
• Phased rollout of payrolling for employee benefits a ‘welcome step’
• Latest guidance for employers

More than 110,000 unrepresented taxpayers who must register for Making Tax Digital (MTD) from April 2026 have still not done so, according to the Low Incomes Tax Reform Group (LITRG).

LITRG’s estimates are based on official HMRC statistics on the number of unrepresented taxpayers it estimates will be in scope for MTD from April 2026, alongside recent public comments from senior HMRC officials on registration and sign-up rates.

From April 2026, taxpayers with gross income of more than £50,000 from self-employment or rental income in the 2024/25 tax year are mandated to use MTD unless they are exempt.

From April 2027, the £50,000 threshold falls to £30,000 and then to £20,000 from April 2028.

LITRG believes that of the 216,000 unrepresented taxpayers HMRC expect to be in scope for this year, around 111,000 have still to register.

Sharron West, LITRG Technical Officer, said:

‘While most of the taxpayers who need to use Making Tax Digital from April 2026 have the services of a professional tax adviser or accountant to help them, there are a significant number who don’t, and many of them have still not signed up.

‘We are concerned that there are a substantial number of people who should register but don’t realise they need to.

‘However, the good news is that there’s still time for these taxpayers to get ready ahead of the first reporting update due on 7 August 2026.’

Internet link: Chartered Institute of Taxation website

The decision to phase in the mandatory payrolling of benefits in kind is a ‘welcome step’ to allow employers and payroll software providers more time to prepare for significant changes, says the Association of Taxation Technicians (ATT).

Benefits in kind are non-cash perks such as company cars or private medical insurance. Currently, most employers report these once a year using a Form P11D, with tax collected through adjustments to employees’ tax codes. This can lead to inaccuracies and the possibility of unwelcome tax bills after the end of the tax year.

Under payrolling, the value of these benefits is added to employees’ pay in real time, so the correct tax is deducted through the payroll each month. Although this improves accuracy and transparency it also requires employers to gather detailed information. They must also ensure their payroll systems can handle the changes.

HMRC had planned to introduce mandatory payrolling for all benefits and more detailed information requirements from April 2027. However, it has now confirmed a phased approach will be taken.

Jon Stride, Chair of the ATT’s Technical Steering Group, said:

‘This is a sensible and welcome step by HMRC. Moving to real-time taxation of benefits should ultimately improve accuracy for employees, but the original timetable based on full implementation in one go was overly ambitious.

‘A phased approach gives employers, software providers and HMRC the time needed to get the systems right and avoid unnecessary disruption.’

Internet link: ATT website

HMRC has published the latest issue of the Employer Bulletin. The June issue has information on various topics, including:

• PAYE Settlement Agreement (PSA) — agreements and a mailbox closure.
• Update — mandatory payrolling of benefits in kind to launch in phases.
• Reminder — file monthly Construction Industry Scheme (CIS) returns or face late-filing penalties.
• Low Earner’s Pension Payment — what employers need to know.
• Employment Rights Act 2025 — actions to take now.
• Helping your workforce get ahead — encourage sending tax returns early.

Internet link: GOV.UK