From September, HMRC Signs You Up for MTD. Ready or Not!

On 12 August 2026, HMRC announced it will begin signing up landlords who should already be using Making Tax Digital for Income Tax but have not registered. The process starts in September and will run in stages over several months.

Landlords with qualifying property income above £50,000 who have not signed up will be registered by HMRC whether they are ready or not.

Why HMRC Is Enforcing MTD on Landlords Now

MTD for Income Tax became mandatory on 6 April 2026 for sole traders and landlords whose combined qualifying income from self-employment and property exceeded £50,000 in 2024/25. The first quarterly update, covering 6 April to 5 July, was due on 7 August.

According to HMRC, more than 570,000 people have now signed up, and more than 436,000 have submitted their first quarterly update. HMRC had estimated that around 864,000 taxpayers would fall into the first mandatory group. That leaves roughly 294,000 who have not registered.

HMRC's statistics, published ahead of the April start date, put the number of landlords required to use MTD for 2026/27 at around 118,000. A separate 3,000 sole traders working in real estate were also in scope. The registration gap across all sectors is what prompted HMRC to announce enforcement action.

What HMRC's MTD Enforcement Means for Landlords

Since September 2026, HMRC has started identifying landlords or sole-traders/self-employed it believes should be using MTD and signing them up.

You will receive a letter or a digital message. This applies to the first mandatory group: landlords or self-employed with qualifying income above £50,000 for 2024/25.

Here's what HMRC enforcement means for you.

Your details can get wrong

HMRC will use information from your most recent Self Assessment return to populate your MTD account. If anything has changed since that return was filed, perhaps a property has been sold, a tenancy has ended or your income has dropped below the threshold, HMRC will not know.

ICAEW has noted that once HMRC initiates the sign-up, fewer details can be corrected online. Changes to your business address, description or property business name would require contacting HMRC directly.

Your accountant will not be told

HMRC will not notify your agent when it signs you up. There is no automated alert. Your accountant will only find out by checking their Agent Services Account or by hearing it from you. If your agent was planning to register you and review the details, they will have less control over the information once HMRC has done it.

The obligation started in April, not September

HMRC's enforcement action does not create a new deadline. It catches up with an existing one. If you were in scope from 6 April 2026, the first quarterly update was due on 7 August. Automatic registration in September does not backdate your records; choose your software or submit the update you have already missed.

Penalties still apply during the first year

HMRC has confirmed that no penalty points will be issued for late quarterly updates during the 2026/27 tax year. That concession does not cover everything. Late payment penalties and late payment interest still apply from the original due dates. The Self Assessment deadline of 31 January 2027 carries its own penalties. And you cannot submit your annual return until all four quarterly updates have been filed through MTD compatible software.

From April 2027, the full points-based penalty system begins. Each missed quarterly deadline adds one penalty point, and a £200 fixed penalty is charged once four points have accumulated. HMRC can also charge up to £3,000 for failure to keep the required digital records in compatible software.

How Qualifying Income Works

The £50,000 threshold is based on gross qualifying income before expenses. It is not based on taxable profit.

If your gross income was £55,000 in 2024/25 but expenses brought your profit down to £30,000, you are still in scope. HMRC does not deduct repairs, agent fees, insurance, finance costs or any other relevant expenses when testing the threshold.

Qualifying income also combines property and self-employment income. A landlord with £35,000 of rental income and £20,000 from self-employment has qualifying income of £55,000. That is above the threshold even though neither source alone exceeds £50,000.

For joint landlords, the threshold is tested per person. If a property generates £90,000 in gross rent and you own it 50/50, HMRC treats your share as £45,000. On its own, that is below the threshold. But any additional property income or self-employment income could push you above it.

Employment income, pensions, dividends and savings interest do not count.

Why Landlords Should Sign Up Before HMRC Does

Signing up yourself, or having your accountant do it, gives you more control. You can check which property businesses HMRC holds on file and confirm they match what you actually own.

If you have multiple properties, you can make sure HMRC has the right business names and descriptions so they are distinguishable in your software. You can also choose software that fits the way you manage your property income, and build your digital records going back to 6 April at your own pace.

HMRC has said that landlords who sign up now have the chance to check their MTD information and prepare rather than waiting to be contacted.

You can sign up for MTD for Income Tax through GOV.UK.

If you believe you should be exempt, check the exemption criteria on GOV.UK and resolve that before HMRC contacts you. Most exemptions are automatic, but digital exclusion requires a formal application.

Choose Your Software Before the Letter Arrives

Being registered for MTD does not make you compliant. You still need compatible software to keep digital records and submit your quarterly updates.

RentalBux is HMRC-recognised MTD software built for landlords. It handles UK property income, foreign property income and self-employment income in one place, and supports joint ownership splits so each owner can file their own quarterly updates from the same set of records. Setting it up now means your records and filing are already working before any letter from HMRC arrives.

The Deadlines That Are Already Here

The first quarterly update covered 6 April to 5 July and was due on 7 August. If you have not submitted it, that update is still outstanding. HMRC signing you up in September does not clear it.

The second quarterly update, covering 6 July to 5 October, is due on 7 November. There is not enough time to treat both as one task.

Get registered with RentalBux. Get your property records in order. Submit anything outstanding. The next deadline is 7 November.