If you’re a sole trader or landlord and your income is above the current Making Tax Digital threshold, you should already be aware that Making Tax Digital for Income Tax (MTD) has arrived.
Since April 2026, sole traders and landlords with qualifying income of more than £50,000 have been required to keep digital records and send quarterly updates to HMRC.
But what happens if you haven’t registered yet?
Well, HMRC may now take matters into their own hands and is preparing to sign people up automatically.
HMRC has confirmed that it will automatically sign up taxpayers who are required to use MTD for Income Tax but have not yet registered.
If you’re affected, HMRC will contact you directly, either by post or digitally depending on your communication preferences, so, if you receive something from HMRC about MTD, don’t ignore it, there are some important steps you’ll need to take.
What happens if HMRC signs you up?
Once HMRC has automatically enrolled you, you’ll be asked to complete what they call a ‘checking step’.
This can be done through the MTD for Income Tax section of your HMRC online account, either through your:
- Personal Tax Account, or
- Business Tax Account.
If you’ve never used an HMRC online services account before, you’ll need to set one up. The checking step is essentially about making sure HMRC has the correct information about your businesses and property income.
Check the information carefully
This is particularly important because the information HMRC is using is based on historical data from the 2024/25 tax year, this means the information they hold may not necessarily reflect your current circumstances. For example, HMRC could potentially include a business that has since ceased trading.
You’ll need to check the businesses and property income HMRC has listed and notify them of any changes.
One thing to be aware of is that you cannot update the business name, address or description through this checking process. If these details need changing, you’ll need to contact HMRC directly.
What happens after you’ve been signed up?
Once you’re signed up and required to use MTD, you’ll need to make sure you have compatible accounting software and that your digital records are up to date. You’ll also need to catch up with any quarterly updates that are already overdue.
The first quarterly submission for 2026/27 was due on 7 August 2026, so anyone being signed up now may already have some catching up to do. Future quarterly updates will then need to be submitted by the relevant deadlines throughout the tax year.
What about penalties?
There is some good news here.
HMRC has confirmed that there will be no penalty points for missing a quarterly update during 2026/27. However, that doesn’t mean you can simply put MTD to one side.
A final quarterly update will still need to be submitted before you can submit your 2026/27 tax return, and penalties can apply if the tax return itself is submitted late. So, while there may be some breathing space around the quarterly updates this year, it’s still important to get your digital records and reporting up to date.
What if you’ve been signed up by mistake?
It is possible that HMRC may sign someone up who doesn’t actually need to use MTD.
If that happens, don’t panic. You’ll need to contact HMRC and explain the situation so that they can rectify the position.
This is one of the reasons why it’s important to check the information HMRC has used when they contact you.
From our perspective, the key message is don’t wait until HMRC automatically signs you up. If you know you’re going to be affected by MTD, getting prepared now will make the transition considerably easier.
Making Tax Digital isn’t simply about submitting a quarterly update. You need to think about how you keep your records, which software you use and how your bookkeeping will fit into your normal business routine.
For many businesses, this will be a change in the way they manage their accounts throughout the year. And, actually, there can be some real benefits to that.
Having your bookkeeping up to date and seeing your figures throughout the year can give you a much clearer picture of how your business is performing, rather than waiting until the end of the tax year to find out where you stand.
Need some help?
If HMRC has contacted you about MTD, or you’re unsure whether you need to register, please don’t ignore it. We can help you understand what MTD means for your business, check what HMRC is asking you to do and help you get your digital records and software in place.
If you’ve already been signed up by HMRC and aren’t sure what to do next, get in touch with the Appleleaf Accountancy team.
We’re here to help make Making Tax Digital a little less daunting.
