Signing up for MTD voluntarily: what GOV.UK says about starting before you have to

Rhiannon is fictional, but her way of thinking will be familiar to plenty of sole traders. She tutors in the evenings and at weekends alongside a part-time job, and her tutoring turnover sits above £30,000 without getting near £50,000. That puts her in the group Making Tax Digital (MTD) for Income Tax reaches from 6 April 2027. She would rather learn the quarterly routine while she has time to make mistakes than meet it for the first time when it counts, so she wants to know whether she can start early and what that would commit her to. This guide sets out what GOV.UK says on both points, so that someone in her position can weigh it up.

Who can sign up before they have to

GOV.UK is clear that starting early is allowed. You can sign up for Making Tax Digital for Income Tax before you need to use it, to help you get ready. You can sign up for the current tax year or the next one. Its own example fits Rhiannon closely: you may need to use it from 6 April 2027, but you can sign up and volunteer now.

The conditions for signing up are the same whether you volunteer or not. GOV.UK says you must be registered for Self Assessment and have submitted a tax return in the last 2 years. That matters for anyone who has only just started trading or letting, because the second condition means a return needs to have been sent before you can sign up. It also helps to know that volunteering does not replace the return you already owe. You still need to submit a Self Assessment tax return for the tax year before you start using Making Tax Digital for Income Tax.

If you are not yet sure which year MTD reaches you, the guide to the 6 April 2027 step and the guide to the 6 April 2028 step explain who each step brings in, and the Am I in MTD? calculator can check your own figures against the timeline.

What signing up early means in practice

It helps to see volunteering as the real routine rather than a practice mode kept to one side. Once you are signed up, you keep digital records and send quarterly updates through compatible software, just as you would if you were required to. When you sign up, you will be asked to confirm the tax year you will start using Making Tax Digital for Income Tax. That choice is worth thinking about before you start, because it decides which year your updates begin with.

If you choose the current tax year and sign up partway through it, there will be some catching up to do. GOV.UK says: you will need to use software that works with Making Tax Digital for Income Tax to send any missed quarterly updates for the year so far. For Rhiannon, signing up in the autumn for the current year would mean bringing her records up to date from the start of the tax year before she sends her first update. Choosing the next tax year instead would mean her first update period starts at the beginning of that year. The guide to your first quarterly update explains what an update contains, and the software selector can narrow the tracked products to ones that fit how you keep records.

Agreeing to the new penalties when you sign up

This is the part of volunteering that needs the most care, because it is the part you cannot undo. If you are using Making Tax Digital for Income Tax, new penalties replace the current late submission and late payment penalties that apply to your personal tax return, and this applies if you sign up voluntarily. You need to agree that the new penalties will apply to you when you sign up, and you will be asked in the service. You will not be able to change your mind once you have agreed that the new penalties apply to you.

The change applies from the point you join, rather than to the years before it. The current penalties still apply to your previous tax years. GOV.UK gives an example: if you volunteer from 6 April 2026, the current penalties still apply to your 2025 to 2026 tax return, due by 31 January 2027. The new penalties also do not apply to a non-resident company return (submitted on behalf of the company), a trust or estate return (submitted by a trustee) or a partnership return (submitted by a nominated partner). The current late payment and late submission penalties still apply to those returns.

HMRC will send you a letter to confirm when the new penalties will apply to you, once it has checked both that you have signed up and that it has moved your records over to its new IT platform. If you have an authorised agent, they can agree to the new penalties on your behalf, and GOV.UK says they should discuss this with you before they sign you up and agree to the penalties. If an accountant handles your sign-up, it is worth having that conversation before the form is completed rather than after.

Which penalty rules apply while you are volunteering

The rules for volunteers are set out on their own GOV.UK page, and they differ from the rules for people who are required to use MTD. The clearest difference is in the quarterly updates. While you are volunteering, you will not get penalties for missing quarterly update deadlines. You still need to keep digital records and send quarterly updates before you can submit your tax return. So the updates still have to be done, but a late one does not count against you while you are volunteering.

The tax return is different, and it is worth being precise about it. For each tax return you submit late, you will get a penalty point. For volunteers the points threshold is two points, and reaching it brings a £200 penalty. Once you reach the threshold, you will get a further penalty each time you miss another tax return deadline. That further penalty is also £200. If you are also registered for VAT, your penalty points for Making Tax Digital for Income Tax are separate from your penalty points for VAT.

Points are removed differently for volunteers, too. GOV.UK says: “If you have 1 point, we’ll automatically remove it 24 months after the missed deadline.” It adds: “If you reach the 2-point threshold, individual points will not automatically be removed.” Clearing them all at that point means you need to submit your next 2 tax returns on time and submit any outstanding tax returns for the previous 24 months, so a run of late returns takes a while to put right.

Late payment follows its own rules. In your first year of the new penalties, you have 30 days from the payment due date to make full payment or contact HMRC to set up a payment plan before penalties start, and after your first year that window reduces to 15 days. Late payment penalties are not points based and apply to each late payment, and the sooner you pay, the lower the penalty will be. There are no changes to how late payment interest works. GOV.UK’s penalties page for volunteers sets out the percentages by tax year, and the guide to MTD penalties explains how the points and payment systems work for people who are required to use MTD.

What changes if you are later required to use MTD

For someone like Rhiannon, volunteering is a stage before the rules apply to her anyway, so it helps to know how the two fit together. GOV.UK says that for the 2027 to 2028 tax year onwards, once you are required to use MTD, late submission penalties will apply if you miss quarterly update deadlines. Your points threshold also rises from two to four. In GOV.UK’s own example, someone who volunteers for the 2026 to 2027 tax year and is then required to use MTD from 6 April 2027 moves to the higher threshold from that date, and from then on gets a penalty point for a late quarterly update.

Points you already hold are adjusted when the threshold changes. If you already have a penalty point when your threshold changes, your points increase by the difference between the two thresholds, which means you are still the same number of points away from your new threshold. So someone holding one point when the threshold changes would move to three points, still one point away from the new threshold.

The late payment window is the other thing to keep in mind, because the longer first-year window is used up while you volunteer. You will only receive the 30-day period once — if you have volunteered and are now required to use Making Tax Digital for Income Tax, you will continue to have 15 days.

Stopping after you have started

GOV.UK’s page for volunteers refers to stopping volunteering, and it is firm about one consequence. You cannot go back to the previous penalties once you have agreed to the new penalties, even if you stop volunteering. The GOV.UK pages this guide relies on do not explain how a volunteer stops, so this guide does not describe a route. If being able to stop matters to your decision, it is a question to put to HMRC before you sign up, while the choice about the new penalties is still open.

Where to go next

If you decide to volunteer, GOV.UK’s sign-up page explains what you will need and links to the service. If you would rather wait, the guide to the 6 April 2027 step and the guide to the 6 April 2028 step cover what to prepare before your own start date. Either way, the software selector and the first quarterly update guide are useful places to begin, and the main MTD guide covers the wider rules.

Questions people ask about volunteering for MTD