Making Tax Digital for Income Tax: HMRC Sign-ups and Your Next Steps

The useful bits, first

• Check your qualifying income for the relevant tax year, not this week's bank balance.

• Being signed up and being ready to report are different things.

• Agree who keeps records, checks figures and submits updates.

• Keep annual tax-return deadlines on your calendar too.

A tax letter can arrive when you're already juggling customers, invoices and the rest of life. It's tempting to put it aside until you have a quiet afternoon. Those afternoons can be hard to find.

This guide breaks the next steps into manageable decisions. It covers UK sole traders and landlords, not a company's Corporation Tax return, and uses HMRC guidance checked on 1 October 2026. We'll look at eligibility, records, software and deadlines before putting together a short action list.

What changed in September?

HMRC's sign-up guidance says it started enrolling people in stages from September 2026 where its records show they must use MTD for Income Tax for 2026/27 and they haven't already signed up. This is a reporting change, not a new announcement that everyone running a business must join.

If you're required to use it and haven't been enrolled, you can still sign up yourself or ask your agent to do it. Don't assume a quiet inbox settles the question.

Think of enrolment as getting access to the system. The figures still need organising. That distinction matters when you're deciding whether the task is finished or simply started.

Check the right income figure

HMRC's eligibility guidance sets out these stages, subject to exemptions:

The word over matters. So does the tax year. A rough estimate of this year's profit won't answer a question based on an earlier return.

Qualifying income generally combines self-employment and property income before expenses. PAYE earnings, dividends and pensions don't count towards that total. They can still matter elsewhere in your tax return.

For a hypothetical UK-resident sole trader, suppose the 2024/25 return shows £38,000 of trading income and £15,000 of rental income. Together, that's £53,000: £3,000 above the first threshold. Assuming no exemption or other relevant complication, this points to an April 2026 start.

Deducting business expenses to produce a lower profit would miss the point of this test. Our explanation of cash flow and profit helps separate the figures, but HMRC's qualifying-income rules decide eligibility.

If HMRC has already signed you up

Use HMRC's guidance for people it has enrolled. Check your status in HMRC online services and confirm the income sources shown. Add missing sources and deal with those that have stopped; don't assume an old return describes everything you do now.

The guidance also explains catching up on digital records from the start of the tax year and sending overdue updates. If you disagree with the enrolment, contact HMRC rather than treating the letter as something you can ignore.

Make a short note of what you found, what you changed and anything you couldn't resolve. If an accountant is helping, that note gives you a useful starting point for the conversation. Much better than both of you trying to remember the same phone call.

Choose a working process, not just a subscription

HMRC's software guidance covers products that create records and bridging software that connects existing records, including spreadsheets. Check support for your income sources, accounting period, quarterly updates and annual return. Free options can have usage limits.

A useful question for a supplier is: “Can you show me how my records become a submission?” Ask about corrections and exporting your data too. You should understand the process before relying on it.

Already using software for VAT? Confirm its Income Tax compatibility separately. Our VAT and Making Tax Digital guide covers that separate context; registration for one isn't a substitute for checking the other.

Agree the division of work in writing. Who uploads receipts? Who checks unusual transactions? Who presses submit? Our accounting setup guide explores why clear responsibilities matter. An inexpensive tool that nobody maintains can create an expensive scramble.

Put reporting dates beside your normal work

A quarterly update summarises business income and expenses. It isn't the finished annual tax return. HMRC's reporting timeline lists 7 November 2026 as the second update deadline for the 2026/27 cycle, following 7 August 2026 for the first.

It also lists 31 January 2027 for the usual 2025/26 Self Assessment return and 31 January 2028 for the 2026/27 return through compatible software. Check the obligations shown in your own account, including anything overdue.

Try a simple internal timetable: gather records early, leave time for questions, then review before submission. Those are planning choices, not extra HMRC deadlines. A small regular appointment is often easier to keep than an entire weekend of catching up.

For people required to join from April 2026, HMRC says it won't apply penalty points for late quarterly updates in 2026/27. That doesn't remove the reporting work or protect against late annual-return or payment penalties. Treat the breathing room as time to establish a routine.

When the standard route doesn't fit

Some people qualify for exemptions. HMRC's exemption guidance distinguishes automatic exemptions from those needing an application, including digital exclusion. Health, disability or access difficulties can require a closer look. Simply finding unfamiliar software inconvenient doesn't establish an exemption.

An MTD exemption doesn't generally remove Self Assessment reporting. If your circumstances are complicated, explain them to HMRC or a suitably qualified tax adviser before deciding what applies.

You don't need to pretend you understand every screen. Write down the exact question that's stopping you. “I have two income sources and don't know which records belong where” is something another person can help you resolve.

Frequently asked questions