What does HMRC’s auto-registering for MTD mean for landlords and sole traders?

From September 2026, HMRC will begin automatically registering sole traders and landlords for Making Tax Digital (MTD) for Income Tax if they should already be using the system but haven’t signed up.

This applies to people whose qualifying income from self-employment and property was more than £50,000 in the 2024/25 tax year. They should have started using MTD for Income Tax, sometimes referred to as MTDfIT, from 6 April 2026.

HMRC will carry out registrations in stages, with up to 294,000 taxpayers estimated to be affected.

What does this mean?

MTD for Income Tax changes how landlords and self-employed people keep records and report information to HMRC.

Those within MTD need to use compatible software to keep digital records, send quarterly updates, and submit their tax return information.

Qualifying income is broadly total gross income from self-employment and property before expenses. If there is more than one source of income, these are combined when HMRC checks whether the threshold has been met.

The threshold reduces to more than £30,000 from April 2027 and more than £20,000 from April 2028.

What happens if HMRC registers you automatically?

HMRC will use the information it already holds, but this may not reflect recent changes.

For example:

• a business may have stopped trading;
• property income may have ended;
• business details may need updating;
• an MTD exemption application may still be outstanding.

If any of these apply, it’s important to check your position before HMRC completes the registration.

What if you’ve applied for an exemption?

Some people can apply for an exemption from MTD where it isn’t reasonable or practical for them to use digital tools.

If an application is still awaiting a decision, don’t assume an automatic registration means the exemption has been dealt with.

If HMRC writes to confirm that you’ve been registered, seek advice promptly.

What should you do now?

If your qualifying income for 2024/25 was more than £50,000 and you haven’t signed up for MTD, check your position now.

It’s sensible to confirm:

• whether MTD applies to you;
• whether HMRC holds the correct details;
• whether any income source has ceased;
• whether an exemption may apply;
• whether your bookkeeping software is ready.

Need help?

HMRC’s move to automatic registration makes it even more important for landlords and sole traders to understand whether MTD applies and whether HMRC holds the right information.

Larking Gowen can help you review your position, recommend an accounting software solution for you, and provide a seamless migration to digital.

Martin Bugg | Director in our Business team | Based in Norwich, Norfolk