HMRC to Auto-Enrol Taxpayers Into MTD From September 2026

Tax Queen

Tax Expert @ Pie

3 min read

If you're a sole trader or landlord who hasn't yet signed up for Making Tax Digital (MTD) for Income Tax, HMRC is about to do it for you. From September 2026, HMRC will begin automatically enrolling taxpayers it believes should already be using MTD but haven't signed up themselves. Around 294,000 people are thought to fall into this group. If that might be you, it's worth acting before HMRC does.

Who's Affected, and Are You One of Them?

MTD for Income Tax became mandatory from 6 April 2026 for sole traders and landlords whose combined income from self-employment and property, based on 2024/25 figures, came to more than £50,000. That's qualifying income before expenses, not taxable profit, so it's worth checking your gross figures even if your final profit was lower.

Some exemptions apply, though certain ones require you to actively claim them from HMRC rather than being applied automatically. Our guide on Making Tax Digital for sole traders and landlords covers what the shift to quarterly reporting actually looks like day to day.

HMRC estimates around 864,000 taxpayers fall into this first mandated group. Of those, only around 570,000 had signed up as of this month, leaving roughly 294,000 who should be in the system but aren't yet, and it's this group HMRC is now targeting. If you're unsure whether your income puts you over the threshold, our guide on Making Tax Digital income thresholds breaks down exactly how the £50,000 figure is calculated and what counts towards it.

Why Signing Up Yourself Is the Safer Option

HMRC has been fairly direct about this: taxpayers who sign up themselves have an easier time keeping their details correct from the outset. If HMRC signs you up instead, fewer details can be amended online, and correcting things like your business name, address, or description means contacting HMRC directly rather than fixing it in a few taps.

If you run more than one business, getting clear, distinguishable names and descriptions set up from the start also avoids confusion further down the line. Signing up yourself also means you can choose your MTD-compliant software on your own timeline, rather than scrambling to get set up once HMRC's letter lands.

There's a wrinkle for anyone using an accountant or tax agent too. If your agent signs you up on your behalf, they get certainty over your MTD status straight away. If HMRC signs you up instead, HMRC will not notify your agent, so it's entirely possible for a taxpayer to be auto-enrolled without their accountant knowing anything has changed. Our step-by-step guide on how to register for MTD walks through the sign-up process from start to finish, so you can get ahead of this yourself rather than leaving it to chance.

What Happens From September

HMRC plans to sign up affected taxpayers in batches starting September 2026, pausing this activity around the Self Assessment filing deadline of 31 January 2027 before resuming afterwards.

Once you've been signed up, whether by HMRC or yourself, you'll receive a letter reminding you that you're required to use MTD-compatible software to keep digital records, send quarterly updates, and submit an end-of-year tax return. The letter will also prompt you to check your MTD details are correct, choose compatible software, and catch up on any quarterly updates you've missed. If you'd rather get ahead of all this in one go, our guide on how to prepare for MTD for Income Tax Self Assessment covers deadlines, records, and software in more depth.

That last point matters more than it might sound. The first quarterly update for the 2026/27 tax year was due by 7 August 2026, and by that deadline, 436,000 taxpayers had successfully filed.

If you've been auto-enrolled and missed that update, you'll need to catch up rather than simply starting fresh from your next deadline. You'll also still need to file your 2025/26return through the existing Self Assessment system by 31 January 2027, since MTD doesn't replace that filing for the year just gone.

The Penalty Point System, Explained

It's worth knowing how penalties work under MTD before they start to bite. Every time a quarterly update is submitted late, you're given a penalty point, and once you've built up four points, a £200 fine follows.

The one piece of good news for anyone catching up now is that no penalty points will be issued for late quarterly updates during the 2026/27 tax year, so this first year effectively works as a soft launch. That grace period won't last indefinitely, though, so it's far better to get your filing rhythm sorted now than to wait until penalties are actually in play. Our explainer on HMRC's penalty points system goes into more detail on how points build up and expire.

Once your filing rhythm is sorted, the quarterly updates themselves are fairly routine. Our guide on filing your MTD quarterly update shows exactly what a submission looks like once you're set up, so there's no guesswork when your next deadline comes around.

How Pie Tax Makes MTD Sign-Up and Filing Simple

This is exactly the kind of change self-assessment software is designed to take the stress out of. Why Pie Tax exists is straightforward: MTD adds new, recurring admin on top of your usual tax responsibilities, and getting the details wrong at sign-up creates extra hassle you don't need.

Pie Tax pairs you with a tax expert who can help you check whether you're in scope, get you signed up correctly the first time, and keep on top of your quarterly deadlines without you having to become an MTD specialist. If you'd like to see what that looks like in practice, our walkthrough on connecting Pie Tax to Making Tax Digital covers the whole process, from linking your business to submitting your first update.

What To Do Next

If you think you might be within scope and haven't signed up yet, the smart move is to act before September 2026 rather than wait for a letter from HMRC. Signing up yourself means you control the details HMRC holds, your agent stays in the loop if you have one, and you avoid the scramble of catching up on missed quarterly updates after the fact.

Getting started takes a few minutes. Sign up today for free and let a tax expert help you get your MTD sign-up right the first time.

Get Started for Free