HMRC has begun automatically signing up some sole traders and landlords for Making Tax Digital (MTD) for Income Tax.

If you should already be within the rules for 2026/27 but haven’t registered yourself, you may receive a letter or digital message from HMRC as part of a staged roll-out starting in September 2026. HMRC is using taxpayer records that show qualifying income over £50,000 for the 2024/25 tax year.

What Making Tax Digital means

Under MTD for Income Tax, you keep digital records of your income and expenses and send quarterly updates to HMRC through compatible software. It’s a shift from once-a-year Self Assessment habits towards more regular reporting.

What to do if you’re signed up (or think you will be)

• Check any HMRC letter or message carefully.
• Sign up for MTD yourself if you haven’t already — so you stay in control of the process.
• Choose HMRC-recognised software and link it to your account.
• Bring your digital records up to date from the start of the tax year.
• Submit any outstanding quarterly updates, then keep to the timetable.

The next quarterly update deadline is 7 November 2026. That update covers the period from 6 April to 5 October 2026 on a cumulative basis.

Penalties — the calm version

HMRC has confirmed there are no penalty points for late quarterly updates in the 2026/27 tax year. That is helpful breathing room. It is not a free pass forever: the updates still need submitting, and the usual rules still apply to late tax returns and late payments.

Who this is for

This mainly affects sole traders and landlords who meet the income thresholds. Limited companies have different obligations — but many directors also have personal Self Assessment and property income to think about, so it’s worth checking the full picture.

How Bassline can help

We work with limited companies, sole traders and LLPs across the UK. If you’re unsure whether MTD applies, what software to use, or how to get your records ready before 7 November, we’ll give you clear advice without the jargon.

Questions? Call us on 0113 347 0019 or email contact@bass-line.co.uk — or request a free consultation at bass-line.co.uk.