HMRC is set to begin signing up sole traders and landlords who should already be using Making Tax Digital (MTD) for Income Tax but have not yet registered.
MTD for Income Tax became mandatory from April 2026 for sole traders and landlords with qualifying income of more than £50,000. Those affected are required to keep digital records and submit quarterly updates using compatible software. HMRC’s first quarterly update deadline was 7 August 2026.
HMRC will now begin registering those it believes should be within the system but have not signed up.
If HMRC signs you up, it does not mean your MTD responsibilities have been taken care of. You will still need to have compatible software in place, maintain digital records and submit the required quarterly updates.
Phoebe Hall, Head of Outsourcing at Forrester Boyd, said:
“The important thing is not to see HMRC signing you up as a substitute for getting ready. MTD changes how you need to keep and report your financial records and the sooner you have the right systems and processes in place, the easier that transition will be. If you’re unsure whether you should already be within MTD, now is the time to check rather than waiting for HMRC to contact you.”
There is some breathing space for those getting to grips with the new system. HMRC has confirmed that no penalty points will be issued for late quarterly updates during the 2026/27 tax year. However, those within MTD are still required to maintain digital records and submit their quarterly updates.
If you think you should already be using MTD, we recommend checking your position now. This gives you time to make sure HMRC holds the correct information about you and that your bookkeeping and software are ready.
MTD will also extend further over the next two years, applying to those with qualifying income over £30,000 from April 2027 and over £20,000 from April 2028 based on the previous year tax return.
You can find the latest Making Tax Digital for Income Tax guidance directly from HMRC.
If you’re unsure whether MTD applies to you or would like support getting your bookkeeping and software MTD-ready, please speak to your usual Forrester Boyd contact.
All data and figures referred to in our news section are correct at the date of publishing and should not be relied upon as still current.
