Joining MTD for Income Tax early makes sense if your records are messy or you have never used bookkeeping software, because you get a real practice run without penalties for late quarterly updates. It makes less sense if your books are already digital and tidy, or if you are behind with your tax returns. This guide helps you decide, and shows what signing up part-way through a tax year involves.
Key takeaways
- You can sign up for the current tax year or the next one if you meet HMRC's conditions.
- Volunteers do not get penalties for missing quarterly update deadlines, but those updates must still be sent before the return.
- Late return and late payment penalties work differently once you have joined, so volunteering is not risk-free.
- Signing up mid-year means catching up on any quarterly updates already missed.
- You still file your normal Self Assessment return for the year before you start.
What does volunteering for MTD mean?
Volunteering means signing up for Making Tax Digital for Income Tax before the law requires you to. You then keep digital records and send updates through compatible software, as a mandated user would. The phasing is fixed by qualifying income: over £50,000 (2024/25) from 6 April 2026, over £30,000 (2025/26) from 6 April 2027, and over £20,000 (2026/27) from 6 April 2028.
So the people this question really affects are those in the £20,000 to £50,000 range, who have a date coming but have not reached it. GOV.UK's sign-up guidance says you can join before you need to "to help you get ready".
The real trade-off
The attraction is simple. While you volunteer, a missed quarterly date carries no penalty under HMRC's rules for volunteers. You can find out how long your categorising takes, whether your bank feed works and which questions your software cannot answer, all while a slip costs you nothing for that update.
The catch is the other half of that guidance. The newer points-based regime covers your late returns, with a £200 penalty at two points, and a tiered charge covers late payment. HMRC says it will contact you to confirm when you become liable for these after signing up. If you have a history of filing or paying late, read those rules first. Our guide to MTD penalty points walks through how points build up and clear.
A decision table for early joiners
We use these questions with clients who are weighing it up. Be honest about the middle column.
| Your situation | Lean towards | Why |
|---|---|---|
| Records on paper or in a shoebox | Volunteer, once software is set up | You have the most to learn, and a practice period exposes the gaps |
| Already using bookkeeping software monthly | Wait until your date | The habit is in place, so little extra is gained |
| Returns or payments overdue | Wait, and clear the backlog first | Sorting out old years comes first, and you need a return in the last two years to sign up |
| Several income sources, such as trading and rent | Volunteer, or test with an accountant | Separate updates for each source are worth rehearsing |
| Business about to close or change shape | Wait and take advice | You may not need to go through the set-up work at all |
How to sign up without creating a mess
- Confirm your position. Work out your qualifying income, or read our guide to qualifying income.
- Choose software first. You need compatible software to send any missed updates, so do not sign up until it is set up and your bank is connected.
- Gather the details. HMRC asks for your Self Assessment sign-in, the tax year you will start, and your business name, address and trade if you are a sole trader.
- Enter this year's records so far. Bring income and expenses from 6 April into the software before you try to send anything.
- Send the missed updates. Clear them in one sitting, then note the remaining deadlines in your calendar.
- File last year as normal. Your 2025/26 return is still due online by 31 January 2027.
Worked example: joining part-way through 2026/27
"Reece", an illustrative example and not a real client, is a mobile dog groomer with qualifying income of £38,000 for 2025/26. That figure means an April 2027 start. Reece keeps paper receipts and a notebook, and decides in December 2026 to volunteer for the current year.
By then, two standard quarterly dates have passed (7 August and 7 November), and the next is 7 February 2027. Reece spends two evenings entering eight months of records: about 240 card transactions and a folder of receipts. The first attempt shows £1,900 of supplies sitting in the wrong category and a van insurance payment entered twice. Both are easy to fix in December. They would be more stressful to discover in the first mandated year, when late quarterly updates can start to count towards points.
Reece also has a plan B. If the practice period shows that bookkeeping is taking three hours a week, that is useful evidence for deciding whether to hand it to an accountant before April. The figures here are invented. Your own result depends on how many transactions you have and how clean your records already are.
Common mistakes
- Signing up before the software works. You then have obligations with no way of meeting them.
- Treating "no quarterly penalty" as "no quarterly update". The updates are still needed before you can submit your return.
- Forgetting last year's return. Volunteering in 2026/27 does not cancel your 2025/26 Self Assessment.
- Assuming you can simply step back. Check the current position on leaving, and read our guide to leaving MTD before you commit.
- Ignoring the wider penalty change. A late return can be treated differently once you have joined, so note your new deadlines.
How we can help
We are a London-based specialist gig-economy and MTD accounting practice with fixed monthly fees. MTD compliance starts from £49/month, and we can tell you whether volunteering is worth it on your actual records. See our MTD compliance service, check our pricing, or contact us to talk it through.
Frequently Asked Questions
Can I join MTD for Income Tax if I am not required to yet?
Yes, provided you meet HMRC's sign-up conditions. You must be registered for Self Assessment and have submitted a tax return in the last two years. You can choose the current tax year or the next one, and you will need compatible software before you begin.
Do volunteers get penalty points for a late quarterly update?
No. HMRC's volunteer guidance says you will not get penalties for missing quarterly update deadlines while you are volunteering. The updates still have to be sent before you can submit your return for the year, so a missed date creates a backlog rather than a charge.
Which penalties can a volunteer still get?
The newer late submission and late payment penalties for your return and tax bill. A late return earns a point, and reaching two points brings a £200 penalty. Late payment charges depend on how many days overdue you are. HMRC will contact you to confirm when these start to apply to you.
If I volunteer in 2026/27, do I still file a normal 2025/26 return?
Yes. HMRC says you must still submit a Self Assessment return for the tax year before you start using the service. For most people volunteering now, that is the 2025/26 return, due online by 31 January 2027. Joining early does not replace or delay it.
Is starting in April 2027 a sensible alternative to volunteering?
Often, yes. If your records are already digital and you know your software well, an extra practice period may add little. You can still prepare by choosing software and keeping digital records now, without formally signing up until the tax year you are required to join.
Related reading
How Berber Accounts & Tax helps
We are a London-based, specialist gig-economy and MTD accounting practice working with fixed monthly fees. If you would like this handled for you rather than doing it yourself, we can help.
Schedule a consultation →Written by the Berber Accounts & Tax team, 124 City Road, London EC1V 2NX, United Kingdom.
Last reviewed: 31 October 2026.
This article is general information, not personal tax advice. Speak to a qualified accountant about your own circumstances before acting on it.