HMRC Is Now Signing People Up for Making Tax Digital 2026 – What Sole Traders and Landlords Need to Know
If you're self-employed or earn income from property, you may have recently received a message from HMRC about Making Tax Digital for Income Tax.
And if you've been ignoring Making Tax Digital in the hope that it was something to worry about later, now is probably the time to take another look.
From September 2026, HMRC has begun signing up people who it believes should already be using Making Tax Digital for Income Tax but have not yet registered themselves.
So, what does that mean for you?
Who Needs to Use Making Tax Digital in 2026?
Making Tax Digital for Income Tax became mandatory from 6 April 2026 for individuals who:
are registered for Self Assessment;
receive income from self-employment, property, or both; and
had qualifying income of more than £50,000 in the 2024/25 tax year.
Importantly, qualifying income generally means your gross income before expenses from self-employment and property combined.
The threshold will reduce further as Making Tax Digital continues to roll out, meaning more sole traders and landlords will fall within the system in the coming years.
What Is HMRC Doing From September 2026?
Until now, people who needed to use Making Tax Digital were expected to sign themselves up, or ask their accountant or agent to do it for them.
From September, HMRC has started signing up individuals automatically who have not done so where its records indicate their qualifying income was over £50,000 for 2024/25.
If HMRC signs you up, however, the information it holds may not necessarily reflect changes to your circumstances since your last tax return.
For example, your income sources may have changed or your circumstances may now be different.
That's why it's important not to simply ignore correspondence about Making Tax Digital.
I've Received a Message From HMRC – What Should I Do?
First of all, don't panic.
Being signed up doesn't mean you're in trouble or need to lose sleep this evening.
But you do need to make sure you're set up correctly.
Under Making Tax Digital for Income Tax, you'll need compatible software to keep digital records of your self-employment and/or property income and expenses.
You'll then use that software to send quarterly updates to HMRC.
These quarterly updates are summaries of your income and expenses – they are not four separate tax returns.
You'll still complete your tax return after the end of the tax year.
What If I Haven't Sent My Quarterly Updates?
If you should already be using Making Tax Digital but haven't started properly, it's worth dealing with it sooner rather than putting it off.
HMRC confirmed in August that hundreds of thousands of sole traders and landlords had already submitted their first quarterly update for the 2026/27 tax year.
If you're unsure whether you've missed something, speak to your accountant and establish exactly what applies to your circumstances.
Making Tax Digital Doesn't Have to Be Complicated
We know that phrases such as digital records, compatible software and quarterly updates can make Making Tax Digital sound like yet another administrative burden for business owners.
In practice, having the right systems in place can make managing your accounts much easier.
Keeping your records up to date throughout the year can also give you a much clearer picture of how your business is performing – rather than gathering twelve months' worth of receipts, invoices and transactions when your tax return is due.
How Parker Whitwood Can Help
At Parker Whitwood, we can help sole traders, landlords and business owners understand exactly what Making Tax Digital means for them.
Whether you've received correspondence from HMRC, aren't sure whether you meet the qualifying income threshold or simply don't know where to start, our team can help you:
understand your Making Tax Digital obligations;
check whether you need to use the service;
get your digital accounting records organised;
use suitable accounting software;
manage your quarterly reporting requirements; and
stay on top of your wider tax and accounting responsibilities.
And if you've received a letter or email from HMRC and have absolutely no idea what it's asking you to do, bring it to us. We'll help you make sense of it.
Need Help With Making Tax Digital?
If you're a sole trader, landlord or business owner in Altrincham, Manchester, Hale, Bowdon, Cheshire or the surrounding areas, Parker Whitwood is here to help.
Making Tax Digital is a significant change to the way many people manage their tax affairs, but you don't have to navigate it alone.
Contact Parker Whitwood today to speak to our team about Making Tax Digital, Self Assessment or your wider accounting needs.
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