HMRC has confirmed it will automatically enrol eligible sole traders and landlords into the Making Tax Digital (MTD) system for the 2026-27 tax year if they have not signed up themselves. The legal MTD requirement applies to anyone earning more than £50,000 from self-employment or property, forcing quarterly income-expense summaries and an end-of-year declaration under a shake-up from the tax authority.
Automatic enrolment begins September 2026
The tax arm, operating under the Labour Party, will begin automatically signing up eligible sole traders and landlords for Making Tax Digital for Income Tax from September 2026. The move affects taxpayers who should already use MTD for Income Tax for 2026/27 but have not yet registered.
Rayner Essex advised: "The September initiative targets sole traders and landlords whose combined qualifying income exceeded £50,000 in the 2024/25 tax year and who must use MTD from April 2026."
Qualifying income explained
Exemptions can apply. Qualifying income means gross income from self-employment and property before expenses, rather than taxable profit. "For example, £35,000 of sole trader turnover and £20,000 of gross rental income would produce combined qualifying income of £55,000. Subject to any exemption, this would bring the individual within the first mandatory group," the adviser added.
The announcement does not introduce automatic registration for everyone due to join in April 2027 or April 2028. HMRC will carry out the enrolment process in stages over the coming months.
HMRC urges early action
Craig Ogilvie, HMRC's Director of Making Tax Digital, said: "It's fantastic to see so many sole traders and landlords successfully sending their first quarterly updates. This marks an important milestone in the move to a more modern tax system, with many customers telling us that the process is straightforward and works well through their chosen software."
"If you haven't yet signed up, now is the time to do so. Taking action now means you stay in control, can make sure your Making Tax Digital for Income Tax details are correct from the start, and have time to choose the software that works best for you, rather than waiting for HMRC to sign you up from September," Ogilvie added.
HMRC added: "Customers who have not yet sent their update can do so now in a few simple steps through their recognised software. In 2026 to 2027, there are no penalty points for late quarterly updates."
"From September 2026, HMRC will begin signing up customers who should be using MTD for the 2026 to 2027 tax year but have not yet done so, helping them meet their requirements. This will happen in stages over the coming months," the tax authority confirmed.
