Landlords face automatic Making Tax Digital sign-up

Landlords who have not signed up for Making Tax Digital (MTD) face being automatically enrolled from September, although late first quarterly updates will not attract penalty points this tax year.

HMRC will begin registering those required to use the system in stages over the coming months.

It says that more than 436,000 sole traders and landlords submitted their first quarterly update for the 2026 to 2027 tax year, while more than 570,000 customers have joined the service.

The rules have applied since April to those with qualifying income of more than £50,000 from property and self-employment.

HMRC urges early action

Craig Ogilvie, HMRC’s director of Making Tax Digital, said: “It’s fantastic to see so many sole traders and landlords successfully sending their first quarterly updates.

“This marks an important milestone in the move to a more modern tax system, with many customers telling us that the process is straightforward and works well through their chosen software.”

He added: “If you haven’t yet signed up, now is the time to do so.

“Taking action now means you stay in control, can make sure your Making Tax Digital for Income Tax details are correct from the start, and have time to choose the software that works best for you, rather than waiting for HMRC to sign you up from September.”

Late updates escape penalties

For most taxpayers, the first update covered the period from 6 April to 5 July 2026, while those using calendar periods reported from 1 April to 30 June.

The deadline for both groups was 7 August.

Outstanding updates can still be submitted through HMRC-recognised software without attracting penalty points during 2026 to 2027.

Penalties continue to apply to late tax returns and overdue payments.

Lower threshold from 2027

From April 2027, Making Tax Digital will also apply to sole traders and landlords with qualifying income of more than £30,000.

Quarterly updates are short summaries of income and expenses rather than tax returns.

The Self Assessment deadline remains 31 January, and taxpayers within the scheme must complete their updates before they can submit a return.

From 6 April 2027, each missed quarterly deadline will add one penalty point, with a £200 fine imposed once four points have accumulated.