Making Tax Digital for Income Tax is now in place for the first group of sole traders and landlords, but not everyone who is required to use the system has signed up.
From September 2026, HMRC has started automatically signing up taxpayers who should be using Making Tax Digital for Income Tax for the 2026–27 tax year but have not yet registered themselves. HMRC is using the information it already holds to identify people who appear to fall within the rules. For the 2026–27 tax year, this generally means sole traders and landlords whose qualifying income from self-employment and property was more than £50,000 on their 2024–25 tax return.
If HMRC identifies you as someone who should be using Making Tax Digital, it can now sign you up automatically and contact you to explain what you need to do next. However, there is an important point to consider. HMRC is working from the information it already holds, and that information may not reflect changes that have happened since your last tax return.
You may have stopped trading, sold a rental property or experienced another change that affects whether Making Tax Digital still applies to you. This is why anyone who receives confirmation that HMRC has automatically signed them up should check the information carefully rather than assuming everything is correct.
At Digital Tax Matters, our experienced Accountants in Bedford can help you understand whether you should be within Making Tax Digital, check the information HMRC holds and make sure you are ready to meet the new reporting requirements.
What Is Automatic Making Tax Digital Registration?
Making Tax Digital for Income Tax became mandatory from 6 April 2026 for the first group of qualifying sole traders and landlords. If your qualifying income was more than £50,000 in the 2024–25 tax year and you are not exempt, you should now be using Making Tax Digital for Income Tax.
Qualifying income broadly means your total gross income from self-employment and property before expenses are deducted. Taxpayers who fall within the rules are required to use compatible software to keep digital records, send quarterly updates to HMRC and submit their tax return through the MTD system.
Originally, taxpayers or their agents were expected to complete the sign-up process themselves. However, from September 2026, HMRC has started automatically signing up people who it believes should be using MTD for the 2026–27 tax year but who have not yet registered. HMRC has confirmed that this process will take place in stages over the coming months.
In this article, we’ll cover:
- Who Will HMRC Automatically Sign Up For MTD?
- How Does HMRC Decide Who Needs To Be Registered?
- What Happens If HMRC Signs You Up?
- What If HMRC’s Information Is Out Of Date?
- What If You Stopped Trading Before April 2026?
- Can You Still Sign Up For MTD Yourself?
- What Do You Need To Do Once You Are Registered?
- Will HMRC Automatically Register Taxpayers For 2027 And 2028?
- What Should You Do If You Receive An HMRC Letter?
- How Digital Tax Matters Can Help
Who Will HMRC Automatically Sign Up For MTD?
HMRC’s automatic registration process currently applies to people who should already be using Making Tax Digital for Income Tax for the 2026–27 tax year. This first phase generally covers sole traders and landlords with qualifying income of more than £50,000 in the 2024–25 tax year.
For example, if you reported £60,000 of gross self-employment income on your 2024–25 Self Assessment tax return and you are not exempt from MTD, you should have started using Making Tax Digital for Income Tax from 6 April 2026. If you have not signed up yourself or asked an accountant to register you, HMRC may now do this on your behalf.
The same principle applies if your income comes from property rather than self-employment, or where you have income from both. For example, someone with £35,000 of gross self-employment income and £20,000 of gross property income would have combined qualifying income of £55,000. Assuming no exemption applies, this would place them above the threshold for MTD from April 2026.
The important figure is therefore your total qualifying income rather than the income from each source being considered separately. HMRC provides guidance to help taxpayers check if and when they need to use Making Tax Digital for Income Tax.
How Does HMRC Decide Who Needs To Be Registered?
HMRC uses the information it already holds about taxpayers to determine who appears to fall within the Making Tax Digital rules. For the 2026–27 tax year, the key information comes from the 2024–25 Self Assessment tax return.
If this return showed qualifying income of more than £50,000 and HMRC has no information indicating that an exemption or exclusion applies, its records may show that you should be using MTD. The problem is that a tax return provides a picture of your circumstances at a particular point in time, and your situation may have changed since then.
A business that generated £70,000 of turnover during 2024–25 may have closed before Making Tax Digital started. A landlord who received significant property income during the same period may have since sold their rental properties. HMRC may not automatically know about every change.
HMRC specifically warns that when it signs someone up automatically, it uses the information it already holds, which may not include changes since the person’s last tax return. This is why checking the information following automatic registration is so important.
What Happens If HMRC Signs You Up?
If HMRC automatically signs you up for Making Tax Digital for Income Tax, it will contact you to confirm the registration. Depending on your circumstances, this confirmation may be sent by post or appear within your HMRC online services account.
Being automatically registered does not mean everything has been completed for you. You still need to make sure the information HMRC holds is correct and take the necessary steps to comply with Making Tax Digital. This includes checking your income sources and making sure any changes to your circumstances have been reflected.
You will also need compatible software that works with Making Tax Digital for Income Tax. Once you are within the system, the software is used to create and maintain digital records of your qualifying income and expenses, send quarterly updates to HMRC and ultimately submit your tax return.
If HMRC has automatically registered you, it is therefore important not to treat the confirmation as simply another HMRC letter to file away. It requires action.
What If HMRC’s Information Is Out Of Date?
One of the main reasons HMRC asks automatically registered taxpayers to check their information is that circumstances can change significantly between tax returns.
Imagine you operated as a sole trader throughout 2024–25 and had qualifying income of £65,000. Based on that tax return, you would appear to fall within Making Tax Digital from April 2026. However, you may have subsequently closed the business, moved into employment and stopped receiving any self-employment income.
If HMRC has not been informed about that change, its records could still indicate that you are a sole trader who should be using MTD. The same issue can arise with property income. You may have reported rental income during 2024–25 but sold the property before Making Tax Digital became mandatory for you.
HMRC’s automatic registration is based on the data available to it. It does not necessarily mean HMRC has independently confirmed that every detail remains current. If HMRC signs you up and your circumstances have changed, you should therefore check the information and update HMRC where necessary.
This can prevent you from continuing through an MTD process that may no longer reflect your actual circumstances.
What If You Stopped Trading Before April 2026?
Ceasing to trade is one of the circumstances that can affect whether you need to use Making Tax Digital. If your 2024–25 tax return showed qualifying income above £50,000, HMRC may initially identify you as someone who should be using MTD from April 2026.
However, if all your self-employment and property income had ceased before 6 April 2026, your current circumstances are very different from those shown on your earlier return.
For example, suppose you reported £58,000 of gross self-employment income for 2024–25 but permanently stopped trading in February 2026. HMRC’s automatic registration process may identify the £58,000 figure and sign you up. You should then make sure HMRC is aware that the business ceased before the MTD start date and that the relevant income source is no longer active.
This does not remove your responsibility to complete any outstanding Self Assessment requirements for the period in which you were trading. It does, however, affect whether you should have ongoing Making Tax Digital obligations.
This is an important distinction and one of the reasons taxpayers should not assume that an automatic registration must be correct simply because it came from HMRC.
Can You Still Sign Up For MTD Yourself?
Yes. If you should be using Making Tax Digital for Income Tax but HMRC has not yet automatically registered you, there is still time to sign up yourself or ask your accountant to do it for you. HMRC specifically states that taxpayers who need to use MTD for the 2026–27 tax year should sign up now.
Signing up yourself can have an important advantage because you can make sure your income sources and latest circumstances are correct as part of the process rather than relying solely on the information HMRC already holds. This can reduce the risk of incorrect or outdated information being carried across into your Making Tax Digital account.
If you use an accountant or tax agent, they can also complete the sign-up process on your behalf. HMRC’s Making Tax Digital sign-up guidance explains the registration process and what information you may need.
Signing up is only the beginning, however. You also need to make sure you have suitable compatible software and understand your ongoing responsibilities.
What Do You Need To Do Once You Are Registered?
Once you are registered for Making Tax Digital for Income Tax, you need to start complying with its digital requirements. This means using compatible software to create and store digital records of your self-employment and property income and expenses. You will also need to use your software to send quarterly updates to HMRC.
These updates contain summaries of your qualifying income and expenses based on your digital records. They are not separate tax returns, but they form an important part of the MTD reporting process. Your annual tax return will also be submitted using compatible software, with any other relevant income added as part of the process.
If HMRC has registered you after the tax year has already started, you should not assume that this removes reporting obligations for the earlier part of the year. You may need to bring your digital records up to date and deal with quarterly information covering periods that have already passed.
This is why acting promptly after receiving an automatic registration notice is important. The longer you leave it, the more bookkeeping you may need to bring into the MTD system.
Will HMRC Automatically Register Taxpayers For 2027 And 2028?
The current automatic sign-up process is specifically for people who should be using Making Tax Digital for Income Tax during the 2026–27 tax year. Further groups will enter MTD over the next two years.
If your qualifying income is more than £30,000 on your 2025–26 tax return, you will generally need to start using Making Tax Digital for Income Tax from 6 April 2027, unless an exemption applies. The threshold then reduces again, with those who have qualifying income of more than £20,000 in the 2026–27 tax year generally needing to start using MTD from 6 April 2028.
The automatic registration process HMRC has announced from September 2026 is aimed at taxpayers mandated for 2026–27. Taxpayers entering MTD in later phases should not assume that HMRC will automatically complete their registration.
If you expect to fall within the £30,000 or £20,000 thresholds, it is therefore worth preparing ahead of your relevant start date. This includes checking your qualifying income, making sure your records are accurate, choosing compatible software and understanding when you need to register.
Waiting until your first quarterly reporting deadline approaches could make the transition unnecessarily difficult.
What Should You Do If You Receive An HMRC Letter?
If HMRC contacts you to confirm that you have been automatically signed up for Making Tax Digital, do not ignore the letter or digital message. Start by checking why HMRC believes you are within the rules and look at your 2024–25 Self Assessment return to establish what qualifying self-employment and property income was reported.
You should then compare this with your current circumstances. Are you still self-employed? Do you still receive property income? Have any businesses closed? Have rental properties been sold? Is the information HMRC holds still accurate?
If your circumstances have changed, the relevant information may need to be updated. If the registration is correct, you should make sure you have compatible software and understand what quarterly information needs to be submitted.
It is also important to remember that HMRC may communicate directly with the taxpayer. If you have an accountant and receive an MTD registration letter or message directly, send them a copy. This allows your accountant to check what HMRC has done and advise you on the next steps.
The sooner the position is reviewed, the easier it is to correct outdated information or begin meeting your MTD obligations.
How Digital Tax Matters Can Help
Making Tax Digital for Income Tax is one of the biggest changes to Self Assessment in years, and automatic registration adds another reason to make sure your tax information is up to date.
At Digital Tax Matters, our experienced Accountants in Bedford can help you understand whether Making Tax Digital applies to you and what you need to do next. If HMRC has automatically registered you, we can review the information being used and check whether it reflects your current circumstances.
Where your business or property income has changed, we can help you understand what needs to be updated and whether you still fall within the MTD requirements. If the registration is correct, we can also help you prepare for the practical side of Making Tax Digital, including digital record keeping, compatible accounting software and quarterly reporting.
For taxpayers who will enter MTD from April 2027 or April 2028, preparing early can make the change much easier. Rather than waiting until the new rules apply, you can make sure your bookkeeping processes, software and records are ready in advance.
If you receive a letter or digital message from HMRC confirming that you have been automatically registered, send it to us so we can review what it means for you.
Don’t Ignore An Automatic MTD Registration
HMRC has now started automatically signing up taxpayers who should be using Making Tax Digital for Income Tax for the 2026–27 tax year but have not registered. For many people, HMRC’s information will be correct and the next step will be getting their digital records and quarterly reporting in order.
For others, circumstances may have changed since the 2024–25 tax return on which HMRC’s decision is based. A business may have ceased, property income may have stopped or other information may need to be updated.
Receiving an automatic registration notice should therefore prompt you to check your position rather than simply assuming everything has been dealt with.
If you have been automatically registered for Making Tax Digital or are unsure when you need to join, contact Digital Tax Matters today. We can review your circumstances, help you understand the requirements and make sure you are ready for the next stage of Making Tax Digital.