HMRC Is Now Signing People Up for Making Tax Digital Automatically
Making Tax Digital for Income Tax (MTD) is no longer something that is simply "coming in the future".
Since 6 April 2026, Making Tax Digital for Income Tax has been mandatory for many sole traders and landlords with qualifying income above £50,000.
And there is another important development: from September 2026, HMRC has started signing up eligible taxpayers who have not registered themselves.
Who needs to use Making Tax Digital?
For the 2026/27 tax year, you generally need to use MTD for Income Tax if you are an individual registered for Self Assessment, receive income from self-employment and/or property, and your qualifying income was more than £50,000.
Qualifying income generally means your gross income before expenses from self-employment and property combined.
The threshold is also being reduced:
From April 2026: qualifying income over £50,000From April 2027: qualifying income over £30,000From April 2028: qualifying income over £20,000
This means significantly more self-employed people and landlords will enter the MTD system over the next few years.
What happens if HMRC signs you up?
HMRC has confirmed that from September 2026 it will begin automatically signing up people who should already be using MTD but have not registered.
HMRC will use the information it already holds, particularly qualifying income reported for the 2024/25 tax year.
If HMRC signs you up, you should receive confirmation through your HMRC online services or by post.
You will then need to check your income sources and ensure the information HMRC holds is correct.
What does MTD actually require?
Being registered for MTD isn't simply another HMRC registration.
You will need compatible accounting software to:
keep digital records of your business or property income and expenses;
send quarterly updates to HMRC;
maintain your accounting records digitally; and
complete your tax return through the MTD system.
Quarterly updates are summaries of your income and expenses rather than separate tax returns.
Have you missed your first quarterly update?
There is some good news.
HMRC has confirmed that for the 2026/27 tax year, penalty points will not be issued for late MTD quarterly updates.
However, this does not mean you should ignore them. Outstanding quarterly submissions should still be brought up to date.
Normal penalties can still apply to late tax returns and late payment of tax.
What should you do now?
If you are self-employed or receive rental income, don't wait until January to find out whether MTD applies to you.
Check your 2024/25 Self Assessment return, confirm your qualifying income, check your HMRC online account and make sure you have compatible accounting software in place.
If you have received a letter from HMRC saying that you have been signed up for Making Tax Digital, don't ignore it.
How C&V Accounting can help
C&V Accounting can assist sole traders and landlords with:
checking whether MTD applies to you;
reviewing an HMRC MTD letter;
MTD registration;
setting up compatible accounting software;
digital bookkeeping;
quarterly submissions;
Self Assessment; and
ongoing tax support.
If you have received an HMRC letter and you're not sure what it means, contact C&V Accounting before taking action.
Official HMRC guidance:
HMRC – Check what to do if HMRC has signed you up for Making Tax Digital for Income Tax
HMRC – Sign up for Making Tax Digital for Income Tax
This article is for general information only and does not constitute individual tax or financial advice. Tax treatment depends on your individual circumstances.
Who needs to use Making Tax Digital?
For the 2026/27 tax year, you generally need to use MTD for Income Tax if you are an individual registered for Self Assessment, receive income from self-employment and/or property, and your qualifying income was more than £50,000.
Qualifying income generally means your gross income before expenses from self-employment and property combined.
The threshold is also being reduced:
From April 2026: qualifying income over £50,000From April 2027: qualifying income over £30,000From April 2028: qualifying income over £20,000
This means significantly more self-employed people and landlords will enter the MTD system over the next few years.
What happens if HMRC signs you up?
HMRC has confirmed that from September 2026 it will begin automatically signing up people who should already be using MTD but have not registered.
HMRC will use the information it already holds, particularly qualifying income reported for the 2024/25 tax year.
If HMRC signs you up, you should receive confirmation through your HMRC online services or by post.
You will then need to check your income sources and ensure the information HMRC holds is correct.
What does MTD actually require?
Being registered for MTD isn't simply another HMRC registration.
You will need compatible accounting software to:
keep digital records of your business or property income and expenses;
send quarterly updates to HMRC;
maintain your accounting records digitally; and
complete your tax return through the MTD system.
Quarterly updates are summaries of your income and expenses rather than separate tax returns.
Have you missed your first quarterly update?
There is some good news.
HMRC has confirmed that for the 2026/27 tax year, penalty points will not be issued for late MTD quarterly updates.
However, this does not mean you should ignore them. Outstanding quarterly submissions should still be brought up to date.
Normal penalties can still apply to late tax returns and late payment of tax.
What should you do now?
If you are self-employed or receive rental income, don't wait until January to find out whether MTD applies to you.
Check your 2024/25 Self Assessment return, confirm your qualifying income, check your HMRC online account and make sure you have compatible accounting software in place.
If you have received a letter from HMRC saying that you have been signed up for Making Tax Digital, don't ignore it.
How C&V Accounting can help
C&V Accounting can assist sole traders and landlords with:
checking whether MTD applies to you;
reviewing an HMRC MTD letter;
MTD registration;
setting up compatible accounting software;
digital bookkeeping;
quarterly submissions;
Self Assessment; and
ongoing tax support.
If you have received an HMRC letter and you're not sure what it means, contact C&V Accounting before taking action.
Official HMRC guidance:
This article is for general information only and does not constitute individual tax or financial advice. Tax treatment depends on your individual circumstances.
Comments