My HGH
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Making Tax Digital (MTD) for Income Tax is now a legal requirement for the first group of affected taxpayers.
Since 6 April 2026, sole traders and landlords registered for Self Assessment have generally been required to use MTD where their combined qualifying income from self-employment and property exceeded £50,000 in the 2024/25 tax year. Qualifying income is calculated before expenses, so taxpayers should consider their total turnover across all relevant self-employment and property sources rather than their taxable profit.
Those within the rules must use recognised MTD-compatible software to create, store and correct digital records, send quarterly summaries of income and expenses to HMRC, and submit their annual tax return through that software. The rollout will widen to those with qualifying income above £30,000 from 6 April 2027 and above £20,000 from 6 April 2028, meaning taxpayers below the current threshold should still check when the requirements will begin to apply to them.
HMRC will begin signing up some taxpayers automatically from September 2026.
This action is aimed at people who should already have joined MTD for the 2026/27 tax year but have not registered. The process will take place in stages over the following months. HMRC has reported that more than 570,000 customers have signed up and over 436,000 sole traders and landlords have submitted their first quarterly update.
However, anyone who is already required to use MTD should not assume that automatic registration removes the need to act. Taxpayers signed up by HMRC will receive a letter or digital message explaining what has happened and the next steps. This automatic process currently applies only to those mandated from April 2026: taxpayers entering MTD in April 2027 or April 2028 will still be expected to register themselves or ask their agent to do so at the appropriate time.
Automatic sign-up does not, by itself, make a taxpayer compliant.
Because HMRC is using information held from earlier tax returns, anyone contacted should log in to their Personal Tax Account or Business Tax Account to confirm that the listed businesses and property income sources remain accurate. Businesses that have ceased may need to be removed, new income sources may need to be added and any change in circumstances should be reflected.
The taxpayer must also choose and connect compatible software and ensure that digital records cover the period from the beginning of the 2026/27 tax year. HMRC does not provide the accounting software itself, so choosing a suitable system, setting it up correctly and maintaining complete digital records remain the taxpayer’s responsibility even where HMRC has completed the registration.
Quarterly updates remain mandatory, even though special penalty arrangements apply in the first year.
Each update is a summary produced from the digital records for each self-employment or property business and covers the cumulative position from the start of the tax year to the end of the relevant quarter. It is not a separate tax return and HMRC does not receive each individual receipt or invoice.
The first standard quarterly deadline was 7 August 2026.
HMRC has confirmed that there will be no penalty points for late quarterly updates in 2026/27, and a taxpayer who has missed an earlier update can catch up through a later cumulative submission rather than backfile every missed update. This makes quarterly reporting mandatory.
Taking advice early can help prevent inaccurate records, unsuitable software choices and avoidable last-minute pressure.
At Hunter Gee Holroyd we can provide expert advice, support with record keeping, software preparation and ongoing submissions.
Give us a call on 01904 655202 or email you usual contact or enquiries@hghyork.co.uk
