HMRC To Begin Signing Up Taxpayers For Making Tax Digital.

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

The first group affected includes taxpayers whose qualifying income was more than £50,000 on their 2024/25 Self Assessment tax return. They should already have entered the MTD system from 6 April 2026.

HMRC said taxpayers who have not signed up will now be enrolled in stages, beginning in September 2026. Those affected will receive communication confirming that they have been signed up and will need to make sure they are meeting the relevant reporting requirements.

Under Making Tax Digital, sole traders and landlords must keep their financial records digitally, use compatible software and provide quarterly updates to HMRC. They will still submit a tax return at the end of the tax year, including other taxable income where required.

HMRC defines qualifying income as total gross income rather than profit from self-employment and UK or overseas property. The figure is calculated before expenses and allowances and is combined across relevant income sources rather than assessed separately for each business.

Taxpayers who receive a letter from HMRC have been advised not to ignore it. Those who have not voluntarily registered may also find it more difficult to change certain details after HMRC completes the enrolment process on their behalf.

The rules will expand further from 6 April 2027, when Making Tax Digital 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.

Affected businesses and landlords are being encouraged to prepare early by checking their combined gross income, reviewing bookkeeping arrangements and making sure they have suitable software. Records will need to be maintained digitally rather than relying solely on paper records or spreadsheets.

Although Making Tax Digital does not change the amount of tax payable, it significantly changes how income and expenses are recorded and reported. Early preparation could help taxpayers avoid compliance problems when the requirements become mandatory.

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