Making Tax Digital for Income Tax became a legal requirement on 6 April 2026 for anyone with qualifying income over £50,000. If you didn't sign up yourself before that date, HMRC is now doing it for you. From September 2026, in stages over the coming months, HMRC will start automatically signing up sole traders and landlords who haven't yet registered, based on their 2024/25 Self Assessment return.
If you've received a letter telling you this has already happened, don't panic, but don't put it in a drawer either. Being signed up isn't the same as being compliant. There are still things only you, or your agent, can do.
Why Has This Happened?
You may remember an earlier letter, sent in February or March 2026, warning that MTD was coming. That letter asked you to get ready and sign up yourself. If you didn't act on it, this second letter is HMRC following through, not asking anymore, but doing it on your behalf.
HMRC has confirmed that from September, it will begin signing up customers who should be using MTD for the 2026 to 2027 tax year but haven't registered themselves. This is happening in waves, and HMRC expects to sign up thousands of people a day, pausing over the Self Assessment peak in January.
You're receiving this letter because HMRC's records show your qualifying income, your total turnover from self-employment and property, before expenses or tax, was over £50,000 in your most recent tax return.
What Does the Letter Actually Say?
The letters being sent from September 2026 explain a few key things:
The legal requirement already applies to you
From 6 April 2026, you've been legally required to use Making Tax Digital for Income Tax. This isn't a future deadline, it's already in effect.
HMRC has signed you up on your behalf
Because you hadn't registered yourself, HMRC has now done it using the income details on file.
You, or your agent, still need compatible software
The letter is clear that HMRC does not supply this software. You need to choose and set up something that works with MTD yourself.
Your accountant hasn't been told
Just as with the earlier letters, HMRC cannot contact your agent directly. It's down to you to share this letter with them.
What Should You Do Now?
Being signed up by HMRC is the start of the process, not the end of it. Here's what actually needs to happen next, in order.
Log in and check your details
Sign in to your HMRC online services account (your Personal Tax Account or Business Tax Account) and check that the information HMRC used to sign you up is correct. If you've never used HMRC online services before, you'll need to set up an account first.
Choose MTD-compatible software
HMRC doesn't provide software for this. You'll need commercial software like Otis to keep digital records, send quarterly updates, and file your return.
Check whether you've already missed a quarterly update
This is the part most people miss. If you're only being signed up now, there is a real chance you've already missed a deadline. The quarterly update dates for most customers in the 2026/27 tax year are:
- 7 August 2026
- 7 November 2026
- 7 February 2027
- 7 May 2027
The good news is that for 2026/27 only, there's no penalty point for a late quarterly update. But you still need to catch up, because you can't submit your tax return until your quarterly updates are in.
Still file your 2025/26 tax return as normal
MTD doesn't replace the tax return you already owe for 2025/26. That's still due through the existing Self Assessment system by 31 January 2027, separately from your new quarterly updates.
Understanding the New Penalties
The penalty system is more forgiving in this first year than it will be from 2027/28 onwards.
For 2026/27, you won't get a penalty point for a late quarterly update. From 2027/28, that changes, and both late quarterly updates and late tax returns will start accumulating penalty points. Reach four points and a £200 fixed penalty is charged. Points expire after a period of compliance, so a clean run of updates works in your favour.
A point is also still awarded if your 2026/27 tax return itself is late (due 31 January 2028), regardless of the quarterly update leniency. There are also new, more proportionate penalties for late payment of tax from 2026/27 onwards.
Worth knowing ahead of time: the £50,000 threshold is temporary. From April 2027, anyone with qualifying income over £30,000 will also need to use MTD for Income Tax. If you're close to that figure, it's worth getting your process right now rather than facing the same letter again next year.
In short, this year gives you room to get your process right without being fined for it. That won't last, so it's worth using the breathing room now rather than next year.
If You Don't Think You Need to Be in MTD
If you don't agree that you meet the qualifying income criteria, your letter includes a QR code linking to information on exemptions and how to challenge the sign-up. It's worth checking your figures properly rather than assuming the letter is wrong. HMRC is working from your last submitted return, so if that return is accurate, the sign-up almost certainly is too.
There's also a separate exemption route for anyone who is digitally excluded, for example due to age, disability, or lack of internet access. This needs to be applied for through HMRC directly rather than assumed.
Why Didn't I Just Sign Up Myself?
To be fair to HMRC, they did ask first. Plenty of people acted on the earlier letter and got ahead of it.
570,000+
people have signed up for MTD
436,000+
have already submitted their first quarterly update
Those who signed up themselves got to check their own details, choose their own software in their own time, and avoid a letter like this altogether. If this is your first contact with MTD, you're now catching up rather than getting ahead, but that's still entirely manageable.
How Otis Can Help
Being auto-signed-up can feel like you've lost control of the process, but getting compliant from here doesn't have to be complicated. Otis is built for exactly this situation: sole traders and landlords who need to get MTD-ready quickly, without learning a new accounting system from scratch.
Works alongside your existing records — keep using your spreadsheet or whatever method works for you.
Catches you up fast — get any missed quarterly updates submitted without penalty while you still can.
Simple sign-up process — we'll help you confirm your details with HMRC.
Designed for self-employed professionals — not bloated with features you don't need.
You can learn more in our software guide, or read our complete MTD guide for sole traders.
Key Takeaways
Being signed up by HMRC isn't the same as being compliant, you still need to check your details, choose software, and catch up on any missed updates
The legal requirement has applied since 6 April 2026, this letter means HMRC is now enforcing it, not warning you about it
Check whether you've already missed a quarterly update, there's no penalty this year, but you still need to catch up
You still need to file your 2025/26 tax return separately, by 31 January 2027
Share the letter with your accountant if you have one, HMRC won't send them a copy
The penalty system is lenient in 2026/27 but tightens from 2027/28 onwards, and the £50,000 threshold drops to £30,000 from April 2027
Ready to Catch Up on MTD?
Don't let an HMRC letter sit unanswered. Get set up with Otis and get your quarterly updates in before the leniency period ends.
Disclaimer
The content included in this guide is based on our understanding of Making Tax Digital legislation at the time of publication. It may be subject to change and may not apply to your individual circumstances. This guide should not be relied upon as tax advice, you are responsible for complying with tax rules and regulations and should seek independent advice if you require further information.