HMRC to start signing up taxpayers who have not registered themselves for MTD

Making Tax Digital for Income Tax (MTD) became compulsory for the first group of taxpayers from April 2026. Unless exempt, sole traders and landlords with qualifying income (being combined income before from all self-employment and property income sources) of over £50,000 in the 2024/25 tax year must maintain digital records and submit quarterly updates to HMRC from the 2026/27 tax year.

The deadline for submitting the first quarterly update for 2026/27 was 7 August 2026. HMRC have issued a press release to confirm that 436,000 sole traders and landlords submitted their first quarterly update to HMRC. This is from the 570,000 taxpayers who have successfully registered for MTD.

HMRC previously indicated that they expected around 864,000 sole traders and landlords to be required to sign up for MTD from April 2026. For those taxpayers who have not already registered, but should have, HMRC have now announced that they will signing up those taxpayers for MTD.

From September, HMRC will start a process of signing up those taxpayers who they believe should have registered for MTD. This is only for those who HMRC believe were mandated for MTD for the 2026/27 tax year and have not already been registered. Taxpayers who will be required to join MTD from April 2027 or April 2028 will still be expected to sign themselves up at the relevant time or be signed up by their agent.

Once signed up by HMRC, the taxpayer will receive a letter or digital message (depending on their contact preferences) advising them what this means and the next steps they need to take. This is likely to involve the taxpayer logging into their personal tax account/business tax account (or their agent to go into their Agent Services Account) and checking that HMRC’s records are up to date. More guidance will follow in August on how this will work. 

HMRC's records are based on historic tax return data, so it may be the case that they believe there is an MTD obligation for a business that it no longer being carried on. 

Taxpayers who should have signed up, but have not already, can still sign up via GOV.UK and do not need to wait for a letter or digital message from HMRC. Agents can use the separate agent link to register their client for MTD.

If you believe that you (or your client) should be exempt from MTD, you should contact HMRC to request an exemption from MTD. Our Making Tax Digital exemption guidance gives more details of what exemptions are available and whether these apply automatically.