News
HMRC to start Making Tax Digital for Income Tax automatic enrolment
HMRC is currently enrolling taxpayers who failed to register themselves for Making Tax Digital (MTD) for income tax.
Last updated 10 Sep 2026 | First published 19 Aug 2026
By Helen Wood, CA 1 min read
Making Tax Digital
The lowdown
If you are:
- a sole trader or landlord, and
- you had qualifying income of £50,000 or more in the 2024/25 tax year
you must join MTD for income tax for the current (2026/27) tax year. The registration deadline for MTD for income tax was 6th April 2026 and the first quarterly update was due on 7th August 2026, with the second quarterly update due on 7th January 2027.
What does MTD for income tax mean for me?
Under MTD for income tax, taxpayers are required to:
- keep digital bookkeeping records
- submit quarterly updates to HMRC, and
- file your end of year tax return
through MTD-compatible software.
The MTD regime will be extended to taxpayers with qualifying income over £30,000 from 6th April 2027 and over £20,000 from 6th April 2028.
What's happening now?
HMRC estimated that 864,000 sole traders and landlords met the qualifying crietria for MTD for income tax this year, but by mid-August 2026 only 570,000 taxpayers had registered. HMRC has therefore decided to automatically enrol the remaining taxpayers.
Automatic enrolments have begun in stages this month (September 2026) and, while taxpayers can wait to be contacted by HMRC, registering voluntarily now is more beneficial. Registering as soon as possible means you can ensure your details are up to date and correct, choose suitable software, seek professional advice and engage an accountant to maintain records and file your updates for you, if you prefer.
If HMRC let you know that you have been auto-enroled into MTD for income tax, there is advice on your next steps here or speak to an accountant for help and advice to get you up and running.
How TaxAssist Accountants can help you
If you are a sole trader or landlord and are unsure whether MTD for income tax applies to you, our team at TaxAssist Accountants can help. We can:
- review your circumstances
- explain your obligations
- assist with registration
- recommend suitable software and
- provide ongoing support with your bookkeeping and tax compliance.
To book a free initial consultation, call us on 01942 608 999 or use our online contact form here.
Frequently Asked Questions
If you joined the MTD for income tax regime for the 2026/27 tax year, you won’t need to file a self-assessment tax return for 2026/27, because you will be required to file an end of year tax return through your MTD software solution instead. However, you will still need to file a self-assessment tax return for 2025/26 if you have not already done so.
Missing a quarterly update deadline earns one penalty point under HMRC’s points-based system. Accumulating four points within a 24-month period triggers a £200 financial penalty, with a further £200 for each subsequent late submission. Note that HMRC will not issue penalty points for late quarterly updates during the 2026/27 tax year (the soft landing period), but this protection does not apply to the end of year tax return.
You need software that is recognised by HMRC as compatible with Making Tax Digital (MTD) for income tax. HMRC maintains an up-to-date list of compatible software products on GOV.UK, including a personalised software finder tool. Compatible software must be able to create and store digital records of your income and expenses, submit quarterly updates directly to HMRC, and support your end of year tax return submission. Bridging software is also available if you prefer to continue using spreadsheets. It connects your existing records to HMRC's systems. A TaxAssist Accountant can help you choose the right solution for your business.
Making Tax Digital (MTD) is HMRC's programme to digitalise the UK tax system. MTD for VAT is already mandatory for all VAT-registered businesses. From 6th April 2026, MTD for income tax became mandatory for sole traders and landlords with annual income above £50,000. This threshold will fall to £30,000 in April 2027 and £20,000 in April 2028. Affected businesses must use HMRC-recognised software to keep digital records and submit quarterly income and expense updates to HMRC. If your income is below the current threshold, you are not yet required to comply, but adopting digital tools now is recommended to avoid a last-minute scramble.
Last updated 10 Sep 2026 | First published 19 Aug 2026
Helen Wood, CA
Helen is a qualified chartered accountant (CA) and joined TaxAssist in 2025 following three years as a freelance content writer for clients in the tax and accounting publishing sector. Prior to this, She spent 17 years at Big Four and Top 10 accountancy firms. Helen writes clear and helpful articles on tax and accounting for businesses and individuals.
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