HM Revenue and Customs (HMRC) has commenced the automatic enrolment of self-employed individuals and landlords into the Making Tax Digital (MTD) system. The move, which began in September 2026, targets those with a qualifying income of more than £50,000 who have not yet registered for the digital reporting service.
The policy shift follows the mandatory introduction of MTD for Income Tax Self Assessment (ITSA) on 6 April 2026. Under the current rules, taxpayers in this bracket are required to use HMRC-compatible software to keep digital records and send quarterly updates of their income and expenses.
Deadlines for quarterly updates
For those already within the MTD system, the next significant date is 7 November 2026. This is the deadline for submitting the second quarterly update for the 2026/27 tax year.
While the new system requires more frequent reporting, HMRC has confirmed it is not applying penalty points for missed quarterly updates during this first year of the mandate. This measure is intended to allow taxpayers to familiarise themselves with the new software and processes without immediate financial consequence.
Future threshold changes
The current income threshold of £50,000 is set to be lowered significantly in the coming months. From 6 April 2027, the threshold will drop to £30,000, bringing a much larger number of small business owners and property owners into the digital reporting regime.
Software and technical updates
HMRC published Edition 7 of the Making Tax Digital for Income Tax software developer newsletter on 30 September 2026. As part of the ongoing rollout, HMRC is also updating the technical infrastructure that supports tax software. On 16 October 2026, two specific programming interfaces—the individuals-capital-gains-income-api v2 and the individuals-reliefs-api v2—will be retired.
For most taxpayers, this change will happen behind the scenes, but it may require users to ensure their accounting software is fully updated to the latest version. Failure to use updated software could result in connectivity issues when attempting to submit quarterly data.
Taxpayers are advised to check that their chosen software provider is compatible with the latest HMRC requirements and to monitor their digital tax accounts for any notifications regarding automatic enrolment.
