Making Tax Digital for Income Tax is now officially here and if you were supposed to join from April 2026 but haven’t yet signed up, HMRC may now do it for you.

From September 2026, HMRC is beginning to automatically sign up sole traders and landlords who it believes should already be using Making Tax Digital for Income Tax (MTD).

So, if you’re self-employed, receive rental income, or have a combination of the two, now is a good time to check whether the new rules affect you. 👀

Making Tax Digital for Income Tax changes the way certain sole traders and landlords keep their records and report information to HMRC.

Instead of simply completing one Self Assessment Tax Return each year, those within MTD must use compatible software to:

✅ Keep digital records of their business or property income and expenses

✅ Send HMRC quarterly updates throughout the tax year

✅ Submit their final tax return using compatible software

Importantly, the quarterly submissions are not four additional tax returns.

They are essentially summaries of the income and expenses recorded within your accounting software during the year.

Your actual tax liability is still finalised through your annual tax return, and the normal 31 January tax payment deadline remains.

The first phase of mandatory MTD for Income Tax began on 6 April 2026.

You should currently be within the regime if:

👉 You are registered for Self Assessment;

👉 You receive income from self-employment, property, or both; and

👉 Your qualifying income for the 2024/25 tax year was more than £50,000.

One of the most important things to understand is that the £50,000 threshold relates to income before expenses – not profit.

For example:

Self-employed turnover: £42,000
Gross rental income: £15,000
Total qualifying income: £57,000

Even though neither source individually exceeds £50,000, the combined qualifying income is £57,000.

That individual would therefore potentially fall within MTD for Income Tax.

Until now, those affected have been expected to sign themselves up for MTD or have their accountant do it for them.

HMRC has now confirmed that, from September 2026 onwards, it will begin automatically signing up people who should be using MTD for the 2026/27 tax year but haven’t yet registered.

HMRC is using information from 2024/25 Self Assessment Tax Returns to identify those with qualifying income above £50,000.

The process will take place in stages over the coming months, and HMRC should contact you once you have been signed up.

So, if a Making Tax Digital notification suddenly appears in your HMRC account or lands through the letterbox, don’t ignore it! 📩

This is where things become slightly more complicated.

MTD started on 6 April 2026, not September.

Therefore, being automatically signed up now doesn’t mean your obligations only start from the date HMRC contacts you.

If HMRC signs you up, you may need to:

🔹 Check the self-employment and property income sources HMRC holds for you are correct;

🔹 Set up compatible accounting software;

🔹 Create digital records going back to the start of the 2026/27 tax year; and

🔹 Submit any quarterly updates which are already overdue.

The good news is that HMRC has confirmed that penalty points will not be issued for missing quarterly update deadlines during the 2026/27 tax year.

However, that doesn’t mean the updates can simply be ignored, you will still need to bring your digital records up to date and submit the required information.

For most people, qualifying income will broadly consist of your gross income before expenses from:

👷 Self-employment

🏠 UK property

🌍 Overseas property

If you have more than one source, they are generally looked at together when deciding whether you cross the relevant threshold.

For example, someone with £35,000 of self-employed turnover and £20,000 of rental income could be within MTD even though neither income source exceeds £50,000 on its own.

Other income, such as employment income, pensions, dividends or savings income does not form part of the qualifying-income calculation in the same way.

You may not be out of the woods for long!

MTD is being introduced gradually, with the qualifying-income threshold reducing over the next few years:

📅 From 6 April 2026 – qualifying income over £50,000

📅 From 6 April 2027 – qualifying income over £30,000

📅 From 6 April 2028 – qualifying income over £20,000

This means a much larger number of sole traders and landlords will be brought into the system over the next two years.

Even if you aren’t required to use MTD yet, it may therefore be worth reviewing how you currently keep your records and whether your accounting system is ready for the changes.

If you fall within MTD, you will need to use software that is compatible with HMRC’s Making Tax Digital system.

That doesn’t necessarily mean abandoning everything you currently use.

Depending on your circumstances, there are different software options available, including systems that can work alongside spreadsheets.

The important part is ensuring that your records meet the digital-record-keeping requirements and that the software can communicate the required information to HMRC.

And this is exactly the type of thing we can help with. 😊

HMRC is basing automatic enrolment primarily on information it already holds, particularly your 2024/25 Tax Return.

But circumstances change.

Your business may have ceased trading, you may have sold a rental property, or there may be another reason why you believe you shouldn’t be within MTD.

If you’ve been automatically signed up and don’t believe the rules apply to you, don’t simply ignore the notification.

Your circumstances should be reviewed and, where appropriate, HMRC contacted to correct the position.

There are also exemptions from MTD in certain circumstances, including where somebody is considered digitally excluded.

If your gross self-employed and/or rental income exceeded £50,000 during 2024/25, MTD should already be on your radar.

If it isn’t, now is the time to act.

HMRC beginning to automatically enrol taxpayers makes it increasingly difficult to put the changes off until later.

At Llewellyns, we can help you establish whether MTD applies to you, deal with the registration process, review the information HMRC holds, make sure your accounting records are compliant and take care of the ongoing quarterly reporting requirements.

📞 Unsure whether Making Tax Digital applies to you?

Get in touch with the team at Llewellyns Chartered Certified Accountants and we can review your circumstances and make sure you’re ready for the new reporting requirements, without the HMRC headache! 😊

Information correct at the time of publication, September 2026. Making Tax Digital requirements depend on individual circumstances and professional advice should be sought where appropriate.