HMRC begins automatically signing up landlords for Making Tax Digital
Key Points
- From September 2026, HMRC will start automatically enrolling landlords and sole traders in Making Tax Digital.
- Qualifying taxpayers who have bring in more than £50,000 in income will be required to sign up for the system and send quarterly updates to HMRC.
- Those who are automatically enrolled will need to set up their Making Tax Digital records and submit any overdue updates.
- The threshold for Making Tax Digital will fall in the coming years, eventually capturing every sole trader or landlord who earns more than £20,000 annually.
Starting this month, HMRC is beginning to automatically enrol landlords who earn more than a certain amount in its Making Tax Digital system, requiring them to submit quarterly tax reports.
Taxpayers whose combined turnover from self-employment and property is over £50,000 will need to sign up for Making Tax Digital and send quarterly updates to HMRC.
This threshold will drop to £30,000 from April 2027 and to £20,000 from 6 April 2028.
Starting in September 2026, HMRC has begun automatically signing up landlords and self-employed people to Making Tax Digital if they are not already signed up. It will do so where its records show that taxpayers’ qualifying oncome was more than £50,000 in the 2024 to 2025 tax year.
Those who are automatically signed up by HMRC due to earning more than £50,000 will be given a number of steps to take to comply with the new Making Tax Digital requirements.
If you are a landlord or self-employed and have been automatically signed up by HMRC, you will receive a confirmation letter or communication in your online services portal confirming this, and you will then need to do the following:
- Access HMRC online services
- Check and confirm your records are correct
- Get software that supports Making Tax Digital
- Create digital records and submit overdue quarterly updates
- Continue keeping records and submitting quarterly updates going forward
Full guidance for setting up Making Tax Digital if you have been automatically enrolled by HMRC is available on the HMRC website.
Note that Making Tax Digital does not replace Self Assessment obligations, and those who are enrolled in the system will still need to submit their annual Self Assessment returns as normal.
HMRC warns taxpayers to enrol in Making Tax Digital
The deadline for the first quarterly reports has already passed, and more than 436,000 sole traders and landlords have sent their first Making Tax Digital (MTD) for Income Tax quarterly update.
After the deadline of 7 August past, HMRC sent out a warning reminding those who are required to sign up for the system to do so and to submit their outstanding quarterly updates.
For those who missed the first deadline, no penalty points will be applied, but they must still submit their first quarterly updates.
In the future, HMRC will apply penalties to taxpayers who are required to submit MTD updates but do not do so.
“This marks an important milestone in the move to a more modern tax system, with many customers telling us that the process is straightforward and works well through their chosen software,” said HMRC Director of Making Tax Digital Craig Ogilvie.
“If you haven’t yet signed up, now is the time to do so. Taking action now means you stay in control, can make sure your Making Tax Digital for Income Tax details are correct from the start, and have time to choose the software that works best for you, rather than waiting for HMRC to sign you up from September.”
