Making Tax Digital for Income Tax became mandatory for the first group of sole traders and landlords in April 2026.
The first quarterly update deadline has now passed, but HMRC believes a significant number of people who should be using MTD have not yet signed up.
From September 2026, that is set to change.
HMRC has announced that it will begin signing up taxpayers it believes should already be within MTD for the 2026/27 tax year.
Who should already be using MTD?
MTD for Income Tax became mandatory from 6 April 2026 for qualifying sole traders and landlords with gross income from self-employment and property above £50,000.
HMRC originally estimated that around 864,000 taxpayers would fall within the first phase.
By 12 August, more than 570,000 had registered and over 436,000 had successfully submitted quarterly updates.
For those who should have joined but haven’t, HMRC is now preparing to take action.
What happens from September?
HMRC says it will begin automatically signing up people it believes were required to join MTD from April 2026.
This will happen in stages over the following months.
If HMRC signs you up, you should receive a letter or digital message explaining what has happened and what you need to do next.
Being signed up by HMRC does not remove the practical requirements of MTD.
You will still need to use compatible software, keep appropriate digital records and submit the information required under MTD.
Check what HMRC thinks it knows about your business
There is another important part of the process.
HMRC is expected to ask taxpayers who it signs up automatically to check the business information held on their tax account.
This matters because HMRC may be working from information provided on previous tax returns.
For example, its records could still include a self-employed business that has stopped trading. Alternatively, a newer source of self-employed income may need to be added.
Checking the information should help make sure HMRC is expecting MTD updates for the right business.
Your accountant or tax agent can also help you check the information HMRC holds.
Don’t wait for HMRC to sign you up
If you know you should already be using MTD, waiting for HMRC to register you isn’t the best way forward.
Getting everything in place now gives you an opportunity to check your records and make sure your accounting software is ready before your next reporting deadline.
It is also worth speaking to us if you’re unsure whether the MTD rules apply to you. Your position will depend on your qualifying income and circumstances.
What about people joining MTD later?
HMRC’s automatic sign-up plans currently relate to taxpayers who should have entered MTD from April 2026.
They do not replace the normal sign-up process for people entering MTD in later phases.
Under the current timetable, MTD for Income Tax is due to extend to qualifying income above £30,000 from April 2027, with a further expansion to those above £20,000 from April 2028.
If one of those dates applies to you, you should still prepare for MTD rather than assuming HMRC will register you automatically.
Not sure where you stand?
MTD represents a significant change to the way many sole traders and landlords manage their tax records.
If you should already be using MTD, have missed your first quarterly update, or aren’t sure whether HMRC has the correct information about your business, North Devon Accounts can help you work out what needs to happen next.
We can check your position and help you get your records ready for the MTD requirements that apply to you.
Speak to the NDA team about Making Tax Digital.
