HMRC Starts Auto-Enrolling Sole Traders and Landlords Into Making Tax Digital

Since April 2026, Making Tax Digital for Income Tax (MTD IT) has been mandatory for sole traders and landlords earning over £50,000. HMRC now confirms it is moving to the next stage: automatically signing up everyone else who qualifies but hasn't registered yet, starting this month.

Why this matters now

HMRC reports that more than 570,000 customers have already signed up for MTD IT, and over 436,000 submitted their first quarterly update by the 7 August 2026 deadline. From September 2026, HMRC is writing to the remaining eligible sole traders and landlords who haven't signed up voluntarily, and enrolling them automatically over the coming months.

This isn't a new tax. Quarterly updates are short digital summaries of income and expenses, submitted through approved software, and they sit alongside your usual Self Assessment return rather than replacing it.

Who's affected

You're in scope if your combined gross income from self-employment and property in the 2024/25 tax year was £50,000 or more, and you haven't already signed up for MTD IT. A few points worth flagging:

• The £50,000 threshold is based on combined income across self-employment and property together, not each source separately — a landlord with a portfolio plus a side business could tip over the line without realising it.

• The threshold drops to £30,000 from April 2027, pulling a much larger group of sole traders and landlords into MTD next year.

• HMRC pauses the sign-up letters around the 31 January 2027 Self Assessment deadline, so the exact timing of any individual letter can vary.

The catch: your accountant may not find out

The detail most worth acting on is this: when HMRC signs someone up automatically, their agent gets no copy of the letter and no separate notification. If you use an accountant — including us — and HMRC enrols you automatically, we won't necessarily know unless you tell us.

That matters because once you're in MTD, you're expected to keep digital records from 6 April 2026 onwards and submit quarterly updates through compatible software. A gap between HMRC's system and your accountant's diary is exactly how a first quarterly update gets missed.

What to check now

• Check whether you've had a letter from HMRC about MTD for Income Tax, or check your HMRC online account directly for your MTD status.

• If you haven't signed up yet and you meet the £50,000 threshold, consider registering voluntarily now rather than waiting to be auto-enrolled — it lets you choose your own software and timing.

• If you've had a letter, tell your accountant straightaway, even if you think we already know.

• Make sure you have MTD-compatible software in place, or ask us about the free and low-cost options available.

• Know the remaining 2026/27 deadlines: quarterly updates are due 7 November 2026, 7 February 2027 and 7 May 2027, with a final declaration due by 31 January 2028.

• If digital exclusion genuinely applies to you, an exemption is available, but it must be applied for by phone or post with supporting justification — it isn't automatic.

The good news, for now

There's a genuine easement in this first year: HMRC has confirmed that outstanding 2026/27 quarterly updates can still be submitted through recognised software without triggering a penalty point. That protection doesn't extend to your Self Assessment return or payment deadlines, which are unaffected and still carry the usual late-filing and late-payment penalties. From April 2027, a points-based system applies to missed quarterly updates, with a £200 fine once four points build up.

Talk to us before the letter arrives

We're based in Bury and already helping several self-employed and landlord clients get ahead of this rather than wait for HMRC to make the decision for them. If you're not sure whether the £50,000 threshold catches you, or you'd like a hand picking MTD-compatible software, get in touch with Jackson Lee Accountants and we'll check your position with you.