HMRC MTD Income Tax Sign Up: What Changes Sept 2026

If you’re a sole trader or landlord with gross income over £50,000 in 2024/25, take note: HMRC is now signing taxpayers up for MTD income tax itself if they haven’t done it themselves. This is a genuine HMRC MTD income tax sign up initiative, not just a reminder letter, and it changes how much control you have over your own details.

Here’s what’s happening, who it affects, and why acting before HMRC does is the better route.

What’s happening from September 2026?

HMRC has confirmed that, from September 2026, it is signing up taxpayers to Making Tax Digital for Income Tax (MTD income tax) automatically, in stages, where it hasn’t heard from them itself. This only happens where two things are true:

• HMRC believes you fall within the scope of MTD income tax from April 2026, and
• you haven’t already signed up yourself.

You can still sign up for MTD income tax at any point before HMRC steps in, and agents can continue to sign up clients on their behalf. Once HMRC intervenes, that window closes.

If you’re not sure whether the £50,000 gross income threshold applies to you, or how exemptions work, our guide on who needs to register for Making Tax Digital covers this in full.

Why signing up yourself is the smarter move

It might feel like one less job if HMRC does it for you, but that’s not how it plays out in practice. HMRC itself is encouraging taxpayers to act first, and there’s good reason for that.

When you sign up voluntarily, you control the information that goes into the system from day one. Business names, addresses and descriptions can all be entered correctly and, if needed, corrected online with relative ease. If HMRC signs you up instead, far fewer details can be changed through your online account, and any amendments have to go through HMRC directly, which naturally takes longer.

This matters more than it sounds. If you run more than one business, using clear and distinct names and descriptions in your MTD software has proven to be one of the trickiest parts of getting set up correctly. Getting this right from the outset avoids confusion further down the line.

What this means if you use an agent

For accountants and agents, signing up clients directly brings a further advantage: certainty. HMRC will not tell agents when it has signed up a client itself, so if you leave it to HMRC, your agent may have no idea your MTD status has changed until they come across it by chance. Signing up proactively means everyone involved knows exactly where they stand.

HMRC’s timetable for automatic sign-ups

HMRC is working through sign-ups in batches, starting this month and continuing over the coming months, and will pause the process around the self assessment filing deadline of 31 January 2027 so it doesn’t clash with the usual January rush. It’s estimated that as many as 294,000 taxpayers could be brought into MTD income tax this way.

Some figures put the scale of this into context:

• Taxpayers estimated to fall within MTD income tax scope from April 2026 (based on 2023/24 data): 864,000
• Taxpayers who have already signed up: 570,000
• Taxpayers who have submitted at least one MTD quarterly update: 436,000

In other words, a significant number of people who should be preparing for MTD income tax haven’t yet taken action. If that includes you, now is a sensible time to move.

What happens once HMRC signs you up

If HMRC does end up signing you up rather than you doing it yourself, you’ll receive a letter setting out what’s required. This will remind you that, under MTD income tax, you must use compatible software to create and keep digital records, send quarterly updates to HMRC, and submit an end-of-year tax return.

You’ll also be asked to check your MTD details through your HMRC online account, choose compatible software, and catch up on any quarterly updates you’ve missed. If your sign-up happens after 7 August 2026, there may already be an update outstanding. For a full breakdown of what a quarterly update involves and what the deadlines look like, see our guide to the first MTD quarterly update.

Your 2025/26 tax return still needs to go through the existing self assessment system by 31 January 2027, regardless of when you’re moved onto MTD. And if you use an agent, be aware that HMRC will not send them a copy of this letter, so it’s down to you to pass on the details.

What if I miss a quarterly update?

MTD income tax carries its own penalty regime, separate from the one used for late self assessment returns. A penalty point is issued each time a quarterly update is submitted late, and once you reach four points, a £200 fine applies. There’s an easement in place for the first year, though: no penalty points will be issued for late quarterly updates during 2026/27.

We’ve covered how the full points system works, including late payment penalties, in our dedicated guide to MTD for Income Tax penalties.

Frequently asked questions

What is MTD income tax sign up?

MTD income tax sign up is the process of registering with HMRC to use Making Tax Digital for Income Tax, which requires sole traders and landlords above the income threshold to keep digital records and submit quarterly updates using compatible software.

When is HMRC signing people up automatically?

HMRC is signing up taxpayers who haven’t registered themselves from September 2026 onwards, working through cases in batches and pausing around the 31 January 2027 self assessment deadline.

Who needs to sign up for MTD income tax from April 2026?

Anyone with combined gross income over £50,000 in 2024/25 from sole trades and property businesses must use MTD income tax from April 2026, unless a valid exemption applies.

Is it better to sign up myself or wait for HMRC?

Signing up yourself gives you more control over your account details, makes corrections easier, and means agents have certainty over their clients’ status. HMRC recommends taking action rather than waiting.

Will my agent know if HMRC signs me up?

No. HMRC will write to you directly, but it will not send a copy of that letter to your agent. If HMRC has signed you up, you’ll need to let your accountant know yourself.

Need help getting ready for MTD income tax?

If you’re unsure whether you fall within scope, which software to choose, or simply want the sign-up handled properly from the start, our Making Tax Digital accountants can get everything in order well ahead of HMRC’s September deadline. Get in touch with our team to talk through your options.

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