HMRC has announced that it will begin automatically signing up taxpayers to Making Tax Digital (MTD) for Income Tax from September 2026.

The move will affect sole traders and landlords who are required to use MTD but have not yet registered for the 2026/27 tax year. HMRC says the automatic sign-ups will take place in stages over the coming months.

More than 570,000 sole traders and landlords have already signed up, but with around 864,000 taxpayers expected to fall within the first MTD cohort, approximately 294,000 have yet to register.

HMRC is encouraging those who have not yet signed up to do so themselves rather than waiting to be contacted. Registering in advance means taxpayers can check that their details are correct and get set up with compatible software in their own time.

What about quarterly updates?

The first quarterly update deadline for the 2026/27 tax year was 7 August 2026. HMRC reports that more than 436,000 taxpayers have successfully submitted their first update.

There are currently no penalty points for late quarterly updates during 2026/27. However, from 6 April 2027, the points-based penalty system will apply. Taxpayers will receive one penalty point for each missed quarterly deadline, with a £200 fixed penalty issued once four points have been accumulated.

If you are affected by MTD for Income Tax and have not yet registered, now is a good time to get prepared rather than waiting for HMRC to automatically sign you up.

Categories: Insights