From September 2026, HMRC will start signing up (registering) taxpayers who are required to use Making Tax Digital for Income Tax (MTD ITSA) but have not registered themselves. It is being done in stages, and it does one thing only: it puts you onto the system. It does not set up your software, your digital records or your quarterly updates, and it does not remove your own legal responsibility. If you get a sign-up letter, you still have work to do.
MTD for Income Tax became mandatory from 6 April 2026 for sole traders and landlords whose qualifying income is over £50,000. HMRC expected around 864,000 people in this first wave. By August 2026, over 570,000 had registered and 436,000 had filed their first quarterly update, so several hundred thousand mandated taxpayers had not signed up. The September sign-up exercise is HMRC closing that gap.
What HMRC is actually doing from September 2026
HMRC is registering the "no-shows": people it can see are within scope of MTD (from their 2024/25 Self Assessment return) but who have not signed up on GOV.UK. Registration happens in stages, and each affected taxpayer is written to. Guidance for people receiving one of these letters was expected in late August 2026.
Being signed up by HMRC is not a penalty and it is not a criticism. It simply means HMRC has done the enrolment step for you. Everything after that step, the compatible software, the digital records and the four quarterly updates, is still yours to arrange.
Who is caught by MTD for Income Tax?
You are mandated into MTD ITSA if you are a sole trader or landlord (or both) and your qualifying income is over the threshold. Qualifying income means your gross turnover and gross rents before expenses, added together, not your profit. The staged thresholds are:
- Over £50,000 (assessed on the 2024/25 return): mandatory from 6 April 2026.
- Over £30,000: mandatory from 6 April 2027.
- Over £20,000: mandatory from 6 April 2028.
If you are unsure whether your rents count gross or net, read our guide on whether MTD qualifying income is gross or net. For the wider picture, our Making Tax Digital for Income Tax overview walks through the full regime.
What to do if you get an HMRC sign-up letter
Do not file the letter and assume you are sorted. The single most important action is to check HMRC's records, because the sign-up is based on old return data that may no longer be right. Here is the sequence:
- Log in and check. Sign into your Personal Tax Account or Business Tax Account (if you have an accountant, they use the Agent Services Account). Confirm the businesses and property income HMRC has recorded are accurate.
- Fix the record. Remove any business or rental that has ceased, and add any new business or property HMRC does not know about.
- Claim an exemption if you qualify. If you are digitally excluded (for example, you cannot use digital tools because of age, disability, location or another practical reason), you can apply for an exemption. See our note on the MTD exemption for digitally excluded landlords.
- Get your systems ready. Choose compatible software, start keeping digital records and set a routine for the quarterly updates. Our pick of the best MTD software for UK small businesses is a useful starting point.
Self-register now vs wait for HMRC to sign you up
The Association of Taxation Technicians (ATT) has made the point clearly: if you know you are mandated, self-registering now via GOV.UK gives you more control and more time than waiting for the letter. Here is how the two routes compare.
| Point | Self-register now | Wait for HMRC to sign you up |
|---|---|---|
| Timing | You choose when, and can line up software first | HMRC's timetable, in stages from September 2026 |
| Control of your record | You confirm businesses and income up front | Enrolled from old 2024/25 data that may be wrong |
| Software and digital records | Still your job, but with lead time to set up | Still your job, but often with less notice |
| Exemption if digitally excluded | Apply calmly before any deadline pressure | Apply reactively after the letter arrives |
| Risk of missing a quarterly update | Lower, systems are in place early | Higher if the letter lands close to a deadline |
Either way the destination is the same, but self-registering means you arrive there on your own terms.
The quarterly update deadlines for 2026/27
Once you are in MTD ITSA you send four quarterly updates plus a Final Declaration. The updates are cumulative: each one restates your year-to-date figures. For 2026/27 the dates are:
- Q1 (6 Apr to 5 Jul): due 7 August 2026, the first-ever MTD ITSA quarterly update.
- Q2 (6 Jul to 5 Oct): due 7 November 2026.
- Q3 (6 Oct to 5 Jan): due 7 February 2027.
- Q4 (6 Jan to 5 Apr): due 7 May 2027.
- Final Declaration for 2026/27 (this replaces the Self Assessment return): due 31 January 2028.
For a deeper walk-through, see our MTD Income Tax deadlines guide for landlords and the recap of the first quarterly deadline on 7 August 2026.
Will you be penalised? What the first-year rules really say
This is the reassuring part, but read it precisely. There are no penalties for missing a quarterly update deadline in the 2026/27 tax year. That is a deliberate first-year grace period. Points-based late-submission penalties apply to quarterly updates only for tax years after 2026/27: one point per late update, a £200 penalty once you reach a four-point threshold, then £200 for each further late submission, with points below the threshold expiring after 24 months.
What is not waived is late payment. Late-payment penalties apply from the year you join. In your first year there is no penalty if you pay the tax due (or agree a Time to Pay arrangement) within 30 days of the due date; after that first year, penalties start after 15 days. In short: missing a quarterly update in 2026/27 will not be penalised, but paying your tax late still will be.
Worked example: the landlord who ignored the letter
Priya lets two flats with combined gross rents of £52,000 a year. Because her qualifying income is over £50,000 on her 2024/25 return, she was mandated into MTD ITSA from 6 April 2026. HMRC sent her an awareness letter, which she put in a drawer, and she did not register.
In autumn 2026 HMRC signs her up automatically as part of the September no-show exercise. Priya assumes that means it is "done". It is not. She still has no compatible software and no digital records, and she has already missed the 7 August 2026 Q1 update.
The good news: because 2026/27 is the grace year, there is no penalty for the missed quarterly update. The catch: if Priya also pays her income tax late, late-payment penalties still bite. On roughly £52,000 of gross rents, after the personal allowance of £12,570 and her allowable costs, a chunk of her profit sits in the basic-rate band (up to £50,270) with any excess taxed at higher rate, so the tax at stake is real money. Had she self-registered when the awareness letter arrived, she would have chosen her software, kept clean digital records from 6 April, and filed every update on time. You can sanity-check your own numbers with our income tax calculator.
Should you get an accountant to handle it?
You do not have to. But an agent can register you through the Agent Services Account, keep your digital records compliant, and file all four quarterly updates and the Final Declaration for you, which removes most of the moving parts. If you are a landlord weighing this up, our guides on MTD for landlords and whether your accountant can file MTD for you cover what an agent can and cannot do.
Frequently asked questions
Do I still need to do anything if HMRC signs me up for MTD?
Yes. Being signed up by HMRC only completes the enrolment step. You must still log into your Personal or Business Tax Account, check HMRC's records are correct, get compatible software, keep digital records and file your quarterly updates. It does not mean everything is handled.
Will I get a penalty for missing the first quarterly update?
No. There are no penalties for missing a quarterly update deadline in the 2026/27 tax year. Points-based late-submission penalties only start for tax years after 2026/27. However, late-payment penalties still apply from the year you join, so pay your tax (or agree Time to Pay) on time.
What counts as qualifying income for MTD for Income Tax?
Qualifying income is your gross self-employment turnover and gross rental income added together, measured before you deduct any expenses. For the first wave from 6 April 2026 the threshold is over £50,000, assessed on your 2024/25 return. It drops to over £30,000 from April 2027 and over £20,000 from April 2028.
Can I sign up for MTD myself instead of waiting for HMRC?
Yes, and the ATT recommends it. Self-registering now via GOV.UK gives you more control and more time: you can choose your software, set up digital records and confirm your business details before any deadline pressure, rather than being enrolled from older data on HMRC's timetable.
Get this sorted before the letter arrives
If you know your qualifying income is over £50,000, waiting for HMRC to sign you up just costs you time and control. We can register you, set up compliant software and digital records, and file every quarterly update so you never miss a deadline. Book a free call with Zmartly and we will map out exactly what you need for 2026/27.
