HMRC starts signing up MTD income tax taxpayers from September — don't wait to be one of them August 22, 2026 Kieron McGahan Post in Uncategorized HMRC starts signing up MTD income tax taxpayers from September — don't wait to be one of them From September 2026, HMRC will start signing up taxpayers to Making Tax Digital for Income Tax itself, where it believes someone is in scope and hasn't registered voluntarily. If your combined gross income from sole trade and property for 2024/25 was over £50,000, you were required to move onto MTD from April 2026 — and if you haven't signed up yet, HMRC is now preparing to do it for you. That distinction matters more than it might sound. Sign up yourself, or through your agent, and the initial details on file — business name, address, description — are set correctly from the start and can be corrected online if needed. Get signed up by HMRC instead, and fixing those same details means contacting HMRC directly. For anyone running more than one business, having each one clearly named and described in the software isn't optional — it's the only way HMRC and your software can tell them apart. There's a second, quieter reason to act first if you use an agent. When HMRC signs up a client directly, the agent isn't told. If you want your accountant to have certainty over your MTD status rather than finding out after the fact, getting ahead of HMRC's sign-up batches is the way to do it. Timetable HMRC will work through sign-ups in batches from September 2026, pausing around the 31 January 2027 self-assessment deadline. Around 294,000 taxpayers are expected to be affected. For context on scale: HMRC estimates 864,000 people fall within scope from April 2026, but only around 570,000 have signed up so far, and just 436,000 have actually submitted a quarterly update — the first of which was due on 7 August 2026. What happens once you're signed up HMRC writes to confirm you're required to keep digital records for your MTD income sources, send quarterly summary updates, and file an end-of-year return through compatible software. The letter also asks you to check your details are correct, choose MTD-compatible software, and catch up on any quarterly updates already missed. Your 2025/26 tax return still goes through the existing self-assessment system, due by 31 January 2027 as usual — that part hasn't changed. Penalties The new points-based penalty regime applies to late quarterly updates: one point per late submission, with a £200 penalty once you reach four points. HMRC has confirmed no penalty points will be issued for late quarterly updates during 2026/27, so there's a bit of breathing room this first year — but it's not indefinite, and the habit of submitting on time is worth building now rather than later. Worth thinking about Software is often the part that puts people off registering. MTD requires compatible software for record-keeping and quarterly submissions — but that requirement can sit with your accountant rather than with you. If you use an agent whose own systems handle the filing, you may not need to buy, learn, or maintain filing software yourself. Figures can be provided depending on your situation — a spreadsheet, a paper record, rough totals each quarter — and the compliant filing happens on our end. That's a genuine option, not a compromise. It's particularly relevant for anyone with a CIS trade alongside rental income, where the record-keeping is already a bit more involved. If you think you're in scope and haven't signed up yet, don't wait for the letter. Get in touch and we'll take it from there.
HMRC starts signing up MTD income tax taxpayers from September — don't wait to be one of them From September 2026, HMRC will start signing up taxpayers to Making Tax Digital for Income Tax itself, where it believes someone is in scope and hasn't registered voluntarily. If your combined gross income from sole trade and property for 2024/25 was over £50,000, you were required to move onto MTD from April 2026 — and if you haven't signed up yet, HMRC is now preparing to do it for you. That distinction matters more than it might sound. Sign up yourself, or through your agent, and the initial details on file — business name, address, description — are set correctly from the start and can be corrected online if needed. Get signed up by HMRC instead, and fixing those same details means contacting HMRC directly. For anyone running more than one business, having each one clearly named and described in the software isn't optional — it's the only way HMRC and your software can tell them apart. There's a second, quieter reason to act first if you use an agent. When HMRC signs up a client directly, the agent isn't told. If you want your accountant to have certainty over your MTD status rather than finding out after the fact, getting ahead of HMRC's sign-up batches is the way to do it. Timetable HMRC will work through sign-ups in batches from September 2026, pausing around the 31 January 2027 self-assessment deadline. Around 294,000 taxpayers are expected to be affected. For context on scale: HMRC estimates 864,000 people fall within scope from April 2026, but only around 570,000 have signed up so far, and just 436,000 have actually submitted a quarterly update — the first of which was due on 7 August 2026. What happens once you're signed up HMRC writes to confirm you're required to keep digital records for your MTD income sources, send quarterly summary updates, and file an end-of-year return through compatible software. The letter also asks you to check your details are correct, choose MTD-compatible software, and catch up on any quarterly updates already missed. Your 2025/26 tax return still goes through the existing self-assessment system, due by 31 January 2027 as usual — that part hasn't changed. Penalties The new points-based penalty regime applies to late quarterly updates: one point per late submission, with a £200 penalty once you reach four points. HMRC has confirmed no penalty points will be issued for late quarterly updates during 2026/27, so there's a bit of breathing room this first year — but it's not indefinite, and the habit of submitting on time is worth building now rather than later. Worth thinking about Software is often the part that puts people off registering. MTD requires compatible software for record-keeping and quarterly submissions — but that requirement can sit with your accountant rather than with you. If you use an agent whose own systems handle the filing, you may not need to buy, learn, or maintain filing software yourself. Figures can be provided depending on your situation — a spreadsheet, a paper record, rough totals each quarter — and the compliant filing happens on our end. That's a genuine option, not a compromise. It's particularly relevant for anyone with a CIS trade alongside rental income, where the record-keeping is already a bit more involved. If you think you're in scope and haven't signed up yet, don't wait for the letter. Get in touch and we'll take it from there.