17 August 2026 | Bkeepers

If you are a sole trader or landlord and you have not yet signed up for Making Tax Digital (MTD) for Income Tax, there is an important change coming in September.

HMRC has announced that from September 2026, it will begin automatically signing up taxpayers who HMRC believes should already be using MTD for the 2026/27 tax year but have not yet registered. The process will take place in stages over the coming months.

So, if you have been putting MTD off, now is the time to act.

What is Making Tax Digital?

Making Tax Digital for Income Tax is HMRC’s new way of collecting income and expense information from certain sole traders and landlords.

Instead of keeping your records in a traditional spreadsheet, book or paper format and simply submitting one Self Assessment tax return each year, MTD requires you to:

• Keep digital records of your income and expenses.
• Use compatible software.
• Send quarterly updates to HMRC.
• Submit an end-of-year tax return.

MTD for Income Tax became mandatory from 6 April 2026 for individuals with qualifying income above £50,000 based on their 2024/25 tax return. (GOV.UK)

The threshold is then reducing:

When MTD starts	Qualifying income
6 April 2026	Over £50,000
6 April 2027	Over £30,000
6 April 2028	Over £20,000

HMRC has confirmed that partnerships will be brought into MTD in the future, although a timetable has not yet been announced.

Why is September 2026 important?

Until now, the responsibility has largely been on taxpayers and their agents to identify whether they are required to join MTD and complete the sign-up process.

That is changing.

From September, HMRC will begin identifying taxpayers who it believes should already be using MTD for the 2026/27 tax year but have not signed up. HMRC will then start signing those taxpayers up automatically.

This does not mean everyone is being moved into MTD in September.

The September process specifically relates to taxpayers who should already be within MTD for the 2026/27 tax year.

If your MTD start date is April 2027 or April 2028, you are not being brought into MTD early simply because of this announcement.

Who needs to be particularly careful?

If you are a sole trader or landlord, you should check your position if your qualifying income was:

Over £50,000 in 2024/25

You should already have started using MTD from 6 April 2026.

If you have not signed up yet, you should not wait for HMRC to enrol you automatically.

HMRC’s guidance confirms that taxpayers who should be using MTD from April 2026 should sign up now.

You can also use HMRC’s online checker to establish when you need to join MTD and whether you may be exempt.

What does automatic enrolment mean for you?

Being automatically enrolled does not remove your responsibility to comply with MTD.

You will still need compatible software and you will still need to maintain your digital records and meet the quarterly reporting requirements.

This is particularly important because MTD is not simply a replacement for your annual Self Assessment tax return.

You will be reporting throughout the year.

For example, for the 2026/27 tax year, the first quarterly update covered the period from 6 April to 5 July 2026 and had a deadline of 7 August 2026. The second quarterly update is due by 7 November 2026.

What if you have an accountant or bookkeeper?

This is where things can become much easier.

If Bkeepers looks after your bookkeeping and tax affairs, we can help you understand whether MTD applies to you, make sure the appropriate software is in place and help you get your records ready for the new reporting requirements.

However, there is an important distinction between giving your accountant or bookkeeper authorisation and actually signing up for MTD.

HMRC confirms that existing Self Assessment authorisation can be recognised for MTD purposes, but adding an authorisation does not automatically sign your client up for MTD. The client still needs to be signed up through the appropriate MTD service.

That is why we recommend dealing with MTD proactively rather than waiting for HMRC to make the decision for you.

What should you do now?

If you think you may be affected, we recommend taking these steps:

1. Check whether MTD applies to you

Look at your 2024/25 Self Assessment figures and establish whether your qualifying income was above £50,000.

Remember that MTD thresholds relate to qualifying income, not simply your profit.

2. Check your software

You need software that is compatible with Making Tax Digital for Income Tax.

HMRC does not provide the software itself, so you need to make sure the system you use can meet the MTD requirements.

3. Make sure your records are digital

MTD means moving away from relying on paper records and manual processes.

The sooner your bookkeeping is in good shape, the easier the transition will be.

4. Don’t wait for HMRC to enrol you

Automatic enrolment should be viewed as a safety net, not a reason to delay.

If you know you are required to use MTD, getting registered and prepared now gives you much more control over the process.

5. Speak to Bkeepers

If you are unsure whether MTD applies to you, or you don’t know what you need to do next, speak to us.

We can review your circumstances and help you understand what MTD means for your business.

What about penalties?

There is some good news here.

For taxpayers who are required to use MTD from 6 April 2026, HMRC has confirmed that penalty points for late quarterly updates will not apply during the first year, 2026/27.

However, this does not mean there are no consequences for missing every deadline. Penalties can still apply to late tax returns and late payment of tax.

The best approach is therefore not to rely on the penalty easement, but to get your bookkeeping and reporting processes working properly from the outset.

The bottom line

HMRC’s September announcement is an important warning for anyone who should already be using Making Tax Digital but has not yet completed the process.

If your qualifying income was over £50,000 for 2024/25, MTD for Income Tax has already arrived for you.

September’s automatic enrolment process simply means HMRC is becoming more proactive about bringing people into the system.

If you have been putting MTD off, don’t wait for an HMRC letter to arrive.

Get ahead of the change, get your software sorted and make sure your records are ready.

If you’re a Bkeepers client and you’re unsure whether you are affected, get in touch with us and we’ll help you work out what you need to do.

---

Bkeepers – helping you stay ahead of the numbers, not behind them.