MTD Voluntary Registration: Should You Sign Up Early?

If your income is below the MTD threshold, you're not required to use Making Tax Digital yet. But HMRC allows you to voluntarily register — and some sole traders and landlords are choosing to do exactly that.

Who Can Voluntarily Register?

Anyone who currently files a Self Assessment tax return can opt into MTD for Income Tax, regardless of their income level. That includes:

  • Sole traders earning under £30,000
  • Landlords with rental income under £30,000
  • People with both self-employment and rental income that's below the threshold combined

You don't need to wait until MTD is mandatory for your income level.

Why Would You Sign Up Early?

1. Spread the workload across the year

The biggest benefit of MTD isn't compliance — it's the rhythm. Instead of scrambling in January to piece together a year's worth of figures, you're updating quarterly. Each update takes 10–15 minutes because you're only covering three months of transactions.

Many people who've tried it say the January stress disappears.

2. Get ahead of the curve

The threshold is dropping. It's £50,000 from April 2026, £30,000 from April 2027, and HMRC has signalled it could go to £20,000 or lower in future years. If your income is growing, you'll need to comply eventually. Starting early means you're not rushing when it becomes mandatory.

3. Better visibility of your finances

Quarterly updates force you to look at your numbers regularly. You'll spot problems earlier — an expense category that's growing too fast, income that's seasonal, or a tax bill that's higher than expected. No more surprises in January.

4. The soft landing period benefits you too

HMRC's soft landing period for 2026/27 means no penalties for late quarterly updates during the first year. If you voluntarily register, you get to practise the new system with no risk. Make mistakes, learn the rhythm, and be confident by the time penalties do apply.

5. Simpler year-end

If you've been submitting quarterly updates all year, your year-end (EOPS and Final Declaration) is mostly just confirming numbers you've already submitted. Compare that to the current approach of reconstructing an entire year from bank statements and receipts.

Reasons to Wait

Voluntary registration isn't right for everyone:

  • You earn well under £20,000 — MTD may never apply to you, and the current system works fine
  • Your affairs are very simple — if Self Assessment takes you 20 minutes, MTD won't save you time
  • You're planning to stop self-employment soon — no point setting up a new system
  • You don't want to pay for software — HMRC's free tool may be limited, and third-party software costs £79–£120/year

How to Voluntarily Register

  1. Sign up for MTD for Income Tax through your HMRC Government Gateway account
  2. Choose MTD-compatible software — you'll need this to keep digital records and submit to HMRC
  3. Start keeping digital records from the start of the next tax quarter
  4. Submit your first quarterly update by the deadline

Once you're registered, you follow the same rules and deadlines as everyone else. The only difference is that you chose to be there.

What It Costs

The MTD process itself is free — there's no charge from HMRC. Your only cost is MTD software.

ClearMTD costs £9/month or £79/year. For that, you get digital record keeping, quarterly submissions, EOPS, Final Declaration, and direct HMRC connection.

If your income is straightforward, HMRC's free software may also be an option — see our guide on free MTD software from HMRC.

Our Take

If you earn above £20,000 and you're likely to be caught by the threshold in the next couple of years, voluntary registration makes sense — especially during the soft landing period when there are no penalties for mistakes.

If you earn under £20,000 and your Self Assessment is straightforward, there's less urgency. But if you like the idea of quarterly check-ins instead of the January scramble, it's worth trying.

Either way, start by checking your situation with our free MTD checker.