HMRC has confirmed it will begin automatically enrolling sole traders and landlords with income over £50,000 into Making Tax Digital for Income Tax from September, after 436,000 individuals successfully submitted their first quarterly update for the 2026 to 2027 tax year.
The tax authority issued a new press notice detailing the milestone, which marks a significant step in the digitalisation of the UK tax system. Making Tax Digital for Income Tax requires sole traders and landlords to report their income and expenses to HMRC digitally, rather than through annual tax returns alone.
Who must use Making Tax Digital
From 6 April 2026, sole traders and landlords must use the system if their annual income from self-employment and property exceeds £50,000. This threshold is based on qualifying income, which is defined as total turnover from self-employment and property income before expenses, as recorded on the tax return submitted in the previous tax year.
Specifically, if your 2024 to 2025 tax return showed qualifying income over £50,000, you are required to use Making Tax Digital for Income Tax from April 2026. HMRC has clarified that qualifying income includes all turnover from both self-employment and property rental, calculated before any allowable deductions.
Automatic sign-ups begin in September
From September, HMRC will begin signing up customers who need to use Making Tax Digital for Income Tax for the 2026 to 2027 tax year but have not yet registered. The tax authority is encouraging those affected to act voluntarily before then to maintain control over their tax affairs.
HMRC stated: "Customers who have not yet sent their update can do so now in a few simple steps through their recognised software." The message emphasises that the process is designed to be straightforward for those using compliant software packages.
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."
Ogilvie added: "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."
The move affects hundreds of thousands of taxpayers across the UK, with 436,000 sole traders and landlords already having submitted their first quarterly update. Those who have not yet enrolled will face automatic registration from next month, which could limit their choice of software and reduce time to prepare their digital records.
