HMRC is now signing landlords up for MTD automatically: the checks to make now

From September 2026, HMRC has started automatically signing up sole traders and landlords who should already be using Making Tax Digital for Income Tax but have not registered themselves. The first mandatory cohort is based on 2024/25 qualifying income above £50,000. More than 864,000 people were in scope and over 570,000 had signed up by August, leaving roughly 294,000 still unregistered.

Automatic sign-up does not complete your obligations. You still need compatible software, digital records and any outstanding quarterly updates. The next deadline is 7 November 2026.

What HMRC has actually done

HMRC began automatically signing up non-joiners in stages from September 2026. It uses information already held about you, primarily from your Self Assessment records.

Qualifying income is your combined gross income from self-employment and property before expenses. A landlord receiving £52,000 of gross rent can therefore be in scope even if mortgage finance costs and other expenses leave a much smaller taxable profit. Check the GOV.UK sign-up guidance for the official position.

Selling a property after the relevant qualifying year does not necessarily remove the obligation. HMRC gives an example where property income from a source that subsequently ceased still counts towards the qualifying-income test where another qualifying income source continues. If all self-employment and property income ceased before 6 April 2026, MTD does not apply for 2026/27.

If you use an accountant, confirm they have the required MTD authorisation and can access your record. HMRC tells agents to check their Agent Services Account, client authorisations and whether MTD for Income Tax has been added. Our article on how HMRC’s agent access flexibility helps landlords explains the practical side.

The checks to make this month

Key dates for 2026/27

For standard update periods, each quarterly update is cumulative from the start of the tax year rather than covering only the previous three months.

HMRC will not issue penalty points for late quarterly updates during 2026/27. You must still submit the updates before you can submit your tax return. Penalty points can apply to a late tax return, while late-payment penalties and interest continue under the applicable rules.

Getting the bookkeeping side sorted

MTD requires compatible software to create and store digital records and send quarterly updates. If you are moving away from spreadsheets, Xero for landlords and property businesses is one option, while our guidance on structuring property bookkeeping properly covers separating income streams.

Jointly owned property needs particular care. HMRC says each landlord records only their share of jointly let property income and expenses, with simplified record-keeping options available.

For landlords using the cash basis, rent collected by a letting agent is treated as received when the agent receives it on the landlord’s behalf, not when the agent later transfers it to the landlord.

Service-charge funds should also be kept distinct from ordinary rental records where relevant. See our guide to service charge accounting and, for RMC or RTM directors, our guidance on annual accounts for RTMs.

The threshold drops to more than £30,000 from April 2027 and more than £20,000 from April 2028. If you run a property company, our checklist ahead of profit and loss filing at Companies House is also useful, while VAT-registered businesses should check their HMRC VAT account separately.

FAQs

What happens if HMRC signs me up for MTD?

You still need compatible software, digital records and quarterly updates. HMRC’s automatic sign-up does not file anything on your behalf. If earlier quarterly updates are outstanding, they must still be sent.

Do I still need to file a Self Assessment tax return?

Yes. Quarterly updates do not replace the tax return. Once you are using MTD, you complete and submit your tax return through compatible MTD software by 31 January following the tax year.

Can I opt out once HMRC has signed me up?

Not simply because your income drops below the threshold for one year. Once MTD applies, HMRC says you can generally choose to opt out after your qualifying income has been below the relevant threshold for three consecutive tax years. Different rules apply if all qualifying income sources cease or if you qualify for an exemption.

Get ahead of the letter

FHP Accounting works with landlords across the UK through our landlord accountant service, alongside property tax advice, personal tax returns and bookkeeping support.

Speak to our property accountants and we can check where you stand before the November deadline.

Kellee Quigley

I lead FHP Accounting, an accountancy practice specialising in Commercial and Residential Property Accounting. Our goal is to make the administration of running property portfolios easier for landlords, managers, and investors — allowing you to focus on what you do best, while we take care of everything behind the scenes.