HMRC to ‘automatically sign up’ MTD taxpayers from September

Jacob Grattage, Reporter, Business & Accountancy Daily. Croner.

Over 294,000 taxpayers not yet registered for Making Tax Digital for Income Tax warned: ‘We will automatically sign up taxpayers’

In a new development HMRC has confirmed it will begin automatically signing up taxpayers who should already be using Making Tax Digital (MTD) for Income Tax but have yet to enrol.

HMRC stated: ‘From September 2026, HMRC will begin signing up customers who should be using MTD for the 2026 to 2027 tax year but have not yet done so, helping them meet their requirements. This will happen in stages over the coming months.’

‘Customers can avoid this by signing up now... Those who sign up themselves can make sure their MTD details are correct from the start and prepare in their own time, rather than waiting to be contacted by HMRC,’ the announcement continued.

HMRC clarified: ‘This is the first time we have announced that we will automatically sign up taxpayers from September 2026.’

In the same announcement, HMRC revealed that more than 570,000 sole traders and landlords have now signed up to MTD, with over 70,000 believed to have signed up in one week alone.

Just six days after Business & Accountancy Daily exclusively revealed that half a million taxpayers had registered, HMRC has updated its figure, stating: ‘Over 570,000 customers have now signed up to the service.’

Based on HMRC's estimate that 864,000 taxpayers fall within the first mandated cohort, around 294,000 taxpayers have yet to register.

The figures were published five days after the 7 August deadline for the first quarterly update under MTD.

With this, HMRC said ‘more than 436,000’ sole traders and landlords have successfully filed their first update. This suggests that around 134,000 taxpayers who have signed up have yet to file their first update.

Based on those figures, 23% of sign-ups are yet to file their first update, meaning 76% have already complied with the reporting requirement.

Of those who have not yet filed their first update, HMRC said: ‘In 2026-27, there are no penalty points for late quarterly updates.’

However, from 6 April 2027 onwards, points-based penalties will apply where taxpayers miss a quarterly deadline.

‘Taxpayers receive one penalty point for each missed quarterly deadline. Once four points are accumulated, a £200 fixed penalty is charged. Points expire after a period of compliance,’ HMRC said.

Craig Ogilvie, director of MTD at HMRC, 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.’