The profession has spent the better part of three years being told that change is coming. This week, several of those changes became present tense.
As part of our Weekly News & Updates, we highlight the significant changes.
MTD for income tax starts in days. HMRC holds earnings data on nearly four million online sellers. Agent account security is being overhauled in response to a wave of fraud that costs clients money and practices credibility.
HMRC to Introduce Mandatory Multi-Factor Authentication for Agent Accounts
Agent accounts have been targeted repeatedly over the past two years. Fraudsters have used compromised logins to file bogus repayment claims, directing proceeds into accounts they control. HMRC’s response is the reintroduction of multi-factor authentication for every agent signing into its services.
From 7 April 2026, a new page will appear in the agent sign-in journey linking to guidance on the change. A small group of volunteers is currently testing the system. Full rollout is scheduled for the end of June 2026, subject to successful testing.
Larger practices with shared logins across multiple staff and locations have two practical routes.
- An authenticator app allows the same one-time code to be shared across multiple users within the same 30-second window
- A password manager with shared vaults can handle both login credentials and authentication codes via a browser extension, without requiring a mobile phone
These changes apply to web sign-in only. PAYE and Making Tax Digital for VAT are unaffected.
How MTD for Income Tax Penalties Will Work from April 2026
The penalty regime for Making Tax Digital for income tax is not the same as the self-assessment framework most advisers know. A new structure governs both late filing and late payment for taxpayers entering MTD from April 2026.
Late Submission Penalties
Each missed filing obligation earns one penalty point. Once a taxpayer reaches the threshold, a £200 penalty is charged, with a further £200 for each additional point above it. The threshold differs by taxpayer type. Mandated taxpayers reach it at four points. Volunteers reach it at two.
For 2026/27, there are no late submission penalties for quarterly updates. But updates must still be submitted before the end-of-year return can be filed.
Points are removed automatically 24 months after a missed deadline, provided the threshold has not been reached.
Late Payment Penalties
*No penalty in the first year within MTD for income tax. The annual rate applies daily from day 31 for up to two years. Late payment penalties do not apply to payments on account.
The current self-assessment penalty structure continues to apply to periods outside MTD scope, even where the filing deadline falls after a client has entered the new regime.
HMRC Now Has Earnings Data on Nearly Four Million Online Sellers
The rule requiring digital platforms to report seller earnings to HMRC has been in place since January 2024. What has changed is the scale of data now flowing through it.
In calendar year 2025, HMRC received reports on the earnings of nearly four million online sellers. Total declared earnings reached almost £55bn, more than double the £25.5bn reported the year before. The number of seller reports rose by 272% year on year.
The reporting threshold sits at 30 sales per year and earnings above £1,700. HMRC is in the final stages of building a system to automatically extract and analyse this data. Once complete, it will drive compliance activity directly.
For advisers with clients earning through digital platforms, two things are now worth addressing:
- Clients who have not accurately declared historical platform earnings can still come forward voluntarily. Doing so before HMRC makes contact affects the penalty calculation
- Where historical liabilities exist, a Time to Pay arrangement may allow repayment in instalments
HMRC has historically lacked the data to pursue under-declared platform income at scale. That is no longer the case.
MTD for Income Tax Passes 100,000 Sign-Ups With Weeks to Go
More than 100,000 taxpayers are now registered for Making Tax Digital for income tax. The milestone represents roughly 12% of the first wave of mandated taxpayers.
The first wave covers individuals with a combined gross income from sole trades or property above £50,000 in the 2024/25 tax year. Mandatory quarterly reporting begins from 6 April 2026. With the start date days away, approximately 740,000 taxpayers in scope remain unregistered.
A client who enters the system late does not escape the obligation. They begin accumulating filing deadlines from the point they are mandated, regardless of when they register. For advisers carrying clients in scope who have not yet acted, this week is the week to address it.
Trusts Must Register With HMRC Before Reporting a CGT Property Disposal
UK resident trusts disposing of residential property must report the transaction and pay any capital gains tax within 60 days of completion. To do that online, the trust needs a UTR or URN. Without one, it must register with the Trust Registration Service first.
This applies even to trusts that would not normally need to register. Exempt status does not bypass the requirement. Corporate trustees are unaffected and continue to report by post.
Two practical points advisers should have in hand:
- The 60-day clock does not pause for registration. A trust without a UTR or URN needs to begin that process immediately upon completion, not after other steps are settled
- CGT overpayments are not refunded automatically. Once the self-assessment return is filed, any overpayment must be reclaimed by calling HMRC directly
For trust clients holding residential property, checking registration status before a disposal completes is the step that protects the deadline.
Conclusion: Weekly News & Updates
The stories in this edition share a common thread. HMRC is not announcing new intentions. It is operationalising existing ones. The data infrastructure is being built. The penalty frameworks are confirmed. The security requirements have a live timetable. What has been described as upcoming for several years is now a matter of dates and thresholds.
For most practices, the work this creates is not complex. It is a matter of checking client lists, reviewing processes, and ensuring the right conversations happen before deadlines rather than after them.
Good practice has always meant staying ahead of the machinery. Right now, the machinery is moving fast.
