If you are a sole trader or landlord with income over £50,000 and have not joined Making Tax Digital for Income Tax, HMRC may now sign you up itself. Automatic sign-ups began in September 2026 and are being rolled out in stages. The next quarterly update is due by 7 November 2026, so now is the time to check your records and your software.

What’s changed

Making Tax Digital (MTD) for Income Tax became mandatory from 6 April 2026 for sole traders and landlords whose combined self-employment and property income is over £50,000. According to HMRC’s August 2026 update on MTD take-up, more than 570,000 people had signed up and over 436,000 had sent their first quarterly update by the 7 August deadline. Trade press estimates put the number required to join at around 864,000, which suggests a large group has still not engaged.

HMRC’s latest Agent Update (issue 147) confirms that HMRC has begun signing up remaining taxpayers automatically, on a staged basis, from September 2026.

What an automatic sign-up means for you

If HMRC signs you up, you should receive a letter or digital notification. You then need to log in to your HMRC online account and check that HMRC’s records are right: that each business it lists is still trading, that ceased businesses are removed and that nothing is missing. If you do not check, HMRC may expect quarterly updates for a business you no longer run.

Who it affects

  • Sole traders and landlords with qualifying income over £50,000 (based on the 2024/25 tax return) who have not yet signed up.
  • Those with income over £30,000, who must join from April 2027. HMRC’s automatic sign-up only covers people mandated for 2026/27, so this group still needs to register itself.
  • Those with income over £20,000, who are due to join from April 2028.

Limited companies are not in MTD for Income Tax, but directors who also have rental income or self-employment on the side may be.

Key dates

  • 7 November 2026 – second quarterly update deadline (period to 5 October 2026).
  • 7 February 2027 – third quarterly update.
  • 7 May 2027 – fourth quarterly update.
  • 31 January 2027 – 2025/26 Self Assessment return and payment deadline (unchanged).
  • 6 April 2027 – MTD extends to income over £30,000 and the points-based late submission penalty regime starts for quarterly updates.

HMRC has said no penalty points will be charged for late quarterly updates during 2026/27. That is a soft landing, not an exemption: the updates are still required, and from April 2027 each missed deadline earns a point, with a £200 penalty once you reach four points.

What you should do now

  1. Check whether you are in scope by adding up your gross self-employment and property income on your 2024/25 return.
  2. Sign up yourself if you have not already; doing it yourself (or through your agent) lets you name and organise your businesses properly.
  3. Watch for HMRC letters and check your online account if you get one.
  4. Choose MTD-compatible software and make sure your digital records are up to date to 5 October.
  5. Diary 7 November 2026 for your next quarterly update.
  6. Plan for April 2027 if your income is between £30,000 and £50,000.

Our Making Tax Digital services cover sign-up, software set-up and quarterly submissions, so you can concentrate on running your business.

FAQs

Will I be penalised if I missed the 7 August update?

HMRC has said penalty points will not apply to late quarterly updates in the 2026/27 tax year. You should still send any missing update as soon as possible, because the information feeds into your year-end position.

HMRC signed me up but I have stopped trading. What should I do?

Log in to your HMRC online account and tell HMRC the business has ceased, or ask your agent to do it. Otherwise HMRC may expect quarterly updates for that business.

Do I still need to file a Self Assessment return?

Yes. Under MTD you still finalise your tax position for the year by 31 January following the end of the tax year. Quarterly updates do not replace that step.

Talk to Alpha Business Services

Unsure whether HMRC has signed you up, or which software to use? Contact Alpha Business Services  and we will check your position and get you ready for 7 November.

This article is general information, not advice, and is correct as at 28 September 2026. Take advice on your own circumstances before acting.