HMRC is signing up sole traders and landlords to Making Tax Digital automatically — next deadline 7 November

HMRC has started moving sole traders and landlords onto Making Tax Digital for Income Tax without waiting for them to sign up. The rollout began in September 2026 and runs in waves — the letter arrives after you have been signed up. The next common deadline is 7 November.

What has happened

From 6 April 2026, Making Tax Digital for Income Tax (MTD) became mandatory for anyone whose income from self-employment and property was over £50,000 in the 2024 to 2025 tax year. People were expected to sign up themselves. Many did not, so HMRC is now signing them up automatically — its own guidance says this happens "in stages over the coming months", and that it contacts you after the event.

HMRC's own figures show the scale: by mid-August 2026, 436,000 sole traders and landlords had filed a first quarterly update, and more than 570,000 had signed up. The first deadline was 7 August.

Who is affected: what counts as qualifying income

The £50,000 threshold is measured on gross income, before expenses. Two sources are added together: self-employment and property, including property abroad. Employment income, dividends and bank interest are not counted.

So a landlord letting one flat at £2,200 a month with £25,000 of freelance work is already over the line, even if very little is left after the mortgage. That is why automatic sign-up is catching people who never thought of themselves as a business.

Dates: 7 November and after

A quarterly update is not a tax return. It is a summary: cumulative totals of income and expenses by category. HMRC does not receive individual receipts or invoices.

The 2026 to 2027 deadlines are the same for everyone:

— period 6 April to 5 July: 7 August 2026 (passed);
— period 6 April to 5 October: 7 November 2026;
— period 6 April to 5 January: 7 February 2027;
— period 6 April to 5 April: 7 May 2027.

If you use calendar quarters, the periods run from 1 April to 30 June, 30 September, 31 December and 31 March, and the deadlines stay the same.

The annual cycle has not gone away: the tax return and the payment are still due by 31 January. Quarterly updates do not replace it — but you cannot file the return until the updates are in.

A letter has arrived — what to do

Start by signing in to your HMRC online services account and checking that your income sources are recorded correctly. Then you need compatible software: keeping records in a plain spreadsheet and typing figures into the website is no longer an option. HMRC publishes a list of approved software, including free products and bridging tools for spreadsheets.

If you were signed up in September but the tax year started in April, you will have to create the digital records retrospectively and file the updates you have missed. That is the painful part: six months of expenses to sort into categories.

If you believe you are under the threshold or were signed up in error, contact Self Assessment: general enquiries. There is also an exemption for the digitally excluded — people who cannot reasonably use digital services because of age, disability, location or religious belief.

Penalties: what is forgiven this year, and what is not

Late quarterly updates in 2026 to 2027 do not attract penalty points. This is a transition year; points start on 6 April 2027.

The system works like this: one missed deadline is one point, the fourth point triggers a £200 penalty, and every later miss costs another £200. A point below the threshold drops off after 24 months; once you have hit £200, clearing the slate takes 12 months of filing on time plus catching up on anything outstanding.

Late payment penalties, by contrast, already apply. Nothing for the first 15 days. From day 16 in 2026 to 2027 it is 3% of the tax owed, from day 31 another 3%, plus interest at around 10% a year charged daily. From 2027 to 2028 both steps rise to 4%.

Who joins in 2027 and 2028

The threshold keeps falling: £30,000 from April 2027, £20,000 from April 2028. Someone letting a single room and doing delivery work will be inside the system within two years.

The practical takeaway for anyone still under the threshold: it is far easier to start digital record-keeping now than to reconstruct six months of it after a letter from HMRC.