HMRC to begin automatic enrollment for Making Tax Digital

HM Revenue and Customs (HMRC) is implementing the Making Tax Digital (MTD) for Income Tax Self-Assessment scheme, which requires sole traders and landlords to maintain digital records and submit quarterly updates using compatible software.

Starting in the 2026/27 tax year, the mandate applies to individuals with qualifying income exceeding £50,000. The threshold is set to decrease to £30,000 in April 2027 and further to £20,000 in April 2028. Qualifying income is calculated based on total gross income from self-employment and property before expenses.

Recent estimates suggest the initial cohort of people in scope is approximately 860,000, which is roughly 10% higher than previous HMRC projections. While 570,000 individuals have already registered, approximately 290,000 people have yet to sign up. To address this, HMRC plans to begin an automatic enrollment process next month, potentially onboarding thousands of citizens per day. These automatic sign-ups are expected to be paused during peak filing periods surrounding the January 31 deadline.