On 12 August, HMRC confirmed something that a lot of sole traders and landlords have not noticed. From September 2026, it will start signing people up to Making Tax Digital for Income Tax itself, where they should be using it for 2026/27 but have not yet registered.
This is not a crackdown, and HMRC does not present it as one. Its stated purpose is to help people meet a requirement they already have. But there is still a good reason to act first: if you sign up yourself, you control your details, your software and your timing. If HMRC does it for you, you inherit whatever it sets up, and you still have all the real work left to do.
In a nutshell
- HMRC starts signing people up in September. In stages, contacting those affected directly.
- It applies to sole traders and landlords. Not to limited companies.
- Signing up yourself keeps you in control. Your details, your software, your timing.
- Being signed up does not make you compliant. The real work still sits with you.
- The penalty position needs care. One easement this year, not a free pass.
- There is a maintenance window to plan around. The service is down for several days in September.
1. What HMRC actually announced
HMRC's press release of 12 August 2026 reported a milestone: more than 436,000 sole traders and landlords have submitted their first quarterly update, and over 570,000 have signed up to the service.
Buried in the same announcement was the operational change. In HMRC's own words, from September 2026 it will begin signing up customers who should be using Making Tax Digital for the 2026 to 2027 tax year but have not yet done so, to help them meet their requirements. Craig Ogilvie, HMRC's Director of Making Tax Digital, framed it as support rather than enforcement.
The rollout will happen in stages over the coming months, and HMRC will contact the people affected directly. The finer mechanics, what the letters say, how the batches are ordered, what happens if your circumstances have changed, were not published as at the time of writing, with further guidance expected. So treat any confident account of the detail with caution, including ours: what is certain is the direction and the timing.
2. Who this applies to
Making Tax Digital for Income Tax applies to sole traders and landlords, and for 2026/27 it is mandatory where your total qualifying income from self-employment and property is over £50,000. That is gross income before expenses, assessed from your 2024/25 tax return.
Two clarifications that matter for our clients. First, this is not a limited company regime. If you run your business through a company, MTD for Income Tax does not apply to the company. A director is only caught if they personally have self-employment or property income over the threshold.
Second, the next wave is close behind. From April 2027 the threshold drops to over £30,000, which pulls in a lot of part-time landlords and smaller sole traders. If that is you, the sensible move is to watch how this year goes rather than be surprised next spring.
3. Why signing up yourself is better
If you are going to end up in the system either way, why volunteer? Because registration is not a neutral act, and doing it yourself gives you three things.
Your details are right from the start. HMRC's own advice is that signing up yourself means your Making Tax Digital details are correct from day one, rather than being populated from records that may be out of date.
You choose the software. MTD requires compatible software, and the choice genuinely matters: what it costs, whether it suits a landlord or a trade, whether it connects to your bank, whether your accountant can work in it with you. Being enrolled does not choose for you, but it does start the clock.
You choose the moment. Signing up on a quiet week in September is a very different experience from discovering you are enrolled shortly before a quarterly deadline. The next quarterly update deadline is 7 November 2026, and anyone brought in during the autumn will meet it almost immediately.
4. What being signed up does not do
This is the point most likely to catch people out, so it is worth stating plainly. Being signed up by HMRC is registration only. It does not:
- Choose or buy MTD-compatible software for you.
- Create your digital records, or move your existing bookkeeping into a compliant format.
- Submit your quarterly updates.
In other words, an auto-enrolled taxpayer who does nothing else is registered and still not compliant. The obligation to keep digital records and file quarterly sits with you exactly as it did before. If a letter arrives, treat it as a prompt to get set up, not as confirmation that the problem is solved.
We covered the mechanics of the quarterly updates themselves in an earlier article, so we will not repeat them here.
5. The penalty position, stated properly
You will see it written that there are no penalties this year. That is close enough to be dangerous, so here is the accurate version.
For 2026/27, HMRC is not issuing penalty points for missed quarterly update deadlines. That is a genuine easement and it is the reason nobody should panic about being enrolled late in the year.
But the easement covers quarterly updates only. Late Self Assessment returns and late payments are still penalised as normal, and your 2026/27 tax return, due by 31 January 2028, is not covered by it.
From 6 April 2027, the points system starts for quarterly updates: one point per missed deadline, and at four points a £200 penalty, with a further £200 for each miss after that. Only one point accrues per deadline even if you run more than one business. So this year is the year to get the habit right, precisely because the mistakes are cheap.
6. What to do in the next few weeks
A short, practical sequence:
- Check whether you are actually in scope. Look at your 2024/25 return and add gross self-employment and property income. Over £50,000 means you are mandated for 2026/27.
- Sign up yourself rather than waiting. It takes the decision back into your hands.
- Mind the maintenance window. The sign-up service is unavailable from 5pm on Friday 11 September until 1pm on Tuesday 15 September 2026, so plan either side of it.
- Choose software before you need it. Ideally something you and your accountant can both work in.
- Diarise 7 November 2026 for the next quarterly update.
A worked example: Tomasz, a landlord and part-time contractor
Tomasz has two rental flats producing £34,000 of gross rent and does contracting work that brought in £29,000 in 2024/25. He has never thought of himself as an MTD case, because neither figure looks large on its own.
Added together, his qualifying income is £63,000, comfortably over the £50,000 threshold, so he is mandated for 2026/27 and simply has not signed up. Under the new approach, HMRC may enrol him during the autumn. If it does and he assumes that settles it, he will have no compatible software, no digital records, and a 7 November quarterly deadline arriving fast.
If instead he signs up himself in late August or September, he picks software that handles both the property and the trade, gets his records in order, and meets that deadline calmly. The tax he pays is identical either way. The difference is entirely in how much of a scramble it is.
Things to watch out for
- This is not a penalty exercise. HMRC presents it as help, and no points apply to late quarterly updates this year.
- Registration is not compliance. Software, digital records and filing remain your responsibility.
- The easement is narrow. It does not cover your tax return or your payments.
- The threshold is gross, not profit. Add self-employment and property income before expenses.
- Detail is still coming. HMRC guidance on the mechanics was expected shortly, so check before acting on any secondhand account.
How Ollen Services Can Help
If you are in scope and have been putting this off, the fastest route through it is to hand it over. We check whether you are genuinely mandated, register you properly, help you choose software that fits how you actually work rather than the first name you see advertised, and get your records into a shape that produces quarterly updates without drama.
We already run MTD quarterly filing for clients, so we know where it goes wrong. If a letter from HMRC has arrived, or you would rather it did not, that is a good moment to call. We work in English and Polish.
Call us on 07513 491 259 or email hello@ollenservices.co.uk. Doing this on your own terms in September is far easier than doing it under pressure in November.