HMRC to begin signing up taxpayers for Making Tax Digital

HMRC has announced that it will begin signing up sole traders and landlords to Making Tax Digital (MTD) for Income Tax where they are required to use the regime but have not yet registered themselves.

This affects those with qualifying income of more than £50,000 on their 2024/2025 Self Assessment tax return who should have started MTD from 6 April 2026.

According to HMRC, taxpayers who have not already signed up will now be enrolled in stages (starting September 2026) and will be contacted to confirm they have been signed up.

MTD requires sole traders and landlords to keep digital records, use compatible software and submit quarterly updates to HMRC before submitting their tax return at the end of the tax year, including details of any other taxable income where required.

Qualifying income for MTD purposes is defined as the total gross income (turnover not profit) from self-employment and UK and foreign property. This is before any expenses or allowances, including the trading allowance or property allowance, and is the total combined income across all relevant sources. It is not assessed separately for each business.

Those who receive a letter from HMRC should not ignore it and will need to ensure they are meeting their new reporting obligations. Those who have not yet registered voluntarily may also find it more difficult to amend certain details once HMRC has completed the enrolment process on their behalf.

This serves as a timely reminder for taxpayers who will be brought into the regime next year. From 6 April 2027, MTD for Income Tax will apply to sole traders and landlords with qualifying income of more than £30,000, based on information reported in their 2025/26 tax return.

While that deadline may seem some way off, affected taxpayers should begin preparing now. Key steps include checking whether combined gross income from self-employment and property exceeds £30,000, reviewing your current bookkeeping processes, ensuring you have the compatible software in place and that your records are kept digitally rather than on paper or spreadsheets alone.

Although MTD does not change how much tax is paid, it does significantly alter how income and expenses are recorded and reported. Businesses and landlords who prepare early are likely to find the transition easier and reduce the risk of compliance issues once the rules become mandatory.