Making Tax Digital (MTD) for Income Tax became mandatory for the first group of self-employed individuals and landlords from 6 April 2026.
However, HMRC is now taking the next step by automatically signing up some taxpayers who should already be within the system but have not registered themselves.
This development means that some sole traders and landlords could receive unexpected communications from HMRC in the coming months. Understanding what this means and whether it applies to you is therefore more important than ever.
At The MGroup, we regularly support business owners, sole traders and landlords across Oxfordshire and beyond with changing tax regulations, helping them stay compliant while reducing administrative burdens.
With HMRC now proactively enrolling some taxpayers, now is the time to ensure you’re prepared. Download our free MTD brochure for a clear guide to the changes, or CONTACT The MGroup team to discuss how we can help you navigate the transition with confidence.
Who Is Affected by the Making Tax Digital Sign Up Process?
For the 2026/27 tax year, Making Tax Digital for Income Tax generally applies to:
- Sole traders
- Landlords
- Individuals with qualifying income exceeding £50,000 during the 2024/25 tax year
Qualifying income broadly includes gross income from self-employment and property before expenses are deducted.
Importantly, income from employment, pensions, savings or dividends is not included when determining whether the threshold has been exceeded.
“When new tax rules are introduced, reviewing your position early can avoid costly surprises later.”
Says Tim Newton, Senior Associate at The MGroup
HMRC is using information already held from completed tax returns to determine who should be registered. However, this information may not reflect changes that have occurred since a return was submitted.
As a result, receiving a notification from HMRC does not necessarily mean it is correct. Your current circumstances should always be reviewed before assuming the registration is appropriate.
For the latest guidance, see the official HMRC information on Making Tax Digital: https://www.gov.uk/guidance/using-making-tax-digital-for-income-tax
Being Signed Up Is Only the Beginning
Being automatically registered does not remove the responsibilities that come with Making Tax Digital.
Individuals within the system must:
- Maintain digital records of income and expenses
- Use HMRC-compatible software
- Submit quarterly updates to HMRC
- Meet annual reporting requirements
According to HMRC, more than 436,000 landlords and sole traders had successfully submitted their first quarterly update by August 2026.
Importantly, HMRC has confirmed that late submission penalties will not apply to quarterly updates during the 2026/27 tax year. However, any outstanding submissions still need to be completed.
“Businesses that adopt digital systems proactively often find wider benefits beyond compliance, including improved visibility and decision-making.”
Says Tim Newton, Senior Associate at The MGroup
If you have not yet started using compliant software, now is the ideal time to review your options and prepare your records.
You may also find these resources useful:
- Ready for the New Digital Tax Rules
- Managing Working Capital
- Summer Business Health Check
More Taxpayers Will Join From April 2027
Even if Making Tax Digital does not currently apply to you, the position could soon change.
From 6 April 2027, the qualifying income threshold is due to reduce from £50,000 to £30,000.
That means your 2025/26 self-employment and property income could determine whether you are brought into the regime next year.
For many individuals, this creates only a short window to prepare.
Waiting until the final months before implementation may increase pressure, particularly if new accounting software, digital processes and reporting systems need to be introduced.
Therefore, reviewing your position during 2026 could make the transition significantly smoother.
Further information can be found on the GOV.UK Making Tax Digital hub: https://www.gov.uk/government/publications/making-tax-digital
What Should You Do Now?
✅ Check whether your qualifying income exceeded the relevant threshold
✅ Review any Making Tax Digital communications received from HMRC
✅ Confirm whether HMRC’s information reflects your current circumstances
✅ Consider suitable accounting software if you are not already using one
✅ Ensure digital records are maintained correctly
✅ Seek professional advice if you are unsure whether the rules apply to you
Key Takeaways
- HMRC has started automatically registering some taxpayers for Making Tax Digital.
- The current threshold is £50,000 of qualifying income.
- Automatic registration does not remove reporting obligations.
- The threshold is expected to fall to £30,000 from April 2027.
- Early preparation can make compliance significantly easier.
How We Can Help
- Making Tax Digital represents one of the biggest changes to tax administration for self-employed individuals and landlords in recent years.
- At The MGroup, we help clients across Oxfordshire and beyond understand whether the rules apply, select suitable systems and ensure they remain compliant with confidence.