If you're a landlord or sole trader who was within MTD’s scope this year and you didn’t submit your first quarterly update on 7 August, there’s bad news. You’ve fallen behind!
More than 436,000 sole traders and landlords have filed their first quarterly update under Making Tax Digital for Income Tax, and over 570,000 have now signed up to the tax regime.
If you haven’t even signed up to MTD, that’s about to change too. From September, i.e., next month, HMRC will start signing up people who haven't done it themselves. So, all you’re doing at this point is delaying getting ready for the inevitable.
This article explains how many people have signed up, how to tell whether MTD applies to you, and what happens next if you're behind.
Key Takeaways
- 436,000 landlords and sole traders have already made their tax digital, while more than 570,000 have signed up for Making Tax Digital for Income Tax
- That is over half of the 864,000 people HMRC expects to be within MTD for 2026/27
- MTD is mandatory for you from this year if your combined self-employment and property income for 2024/25 was more than £50,000
- From September 2026, HMRC will start signing up eligible taxpayers who have not signed up to MTD themselves
- There are no penalty points for missed quarterly updates during 2026/27; however, the penalty system will apply to the Final Declaration due by 31 January 2028
- From 2027/28, missed quarterly updates will also attract penalty points
- The income threshold falls to £30,000 from April 2027 and £20,000 from April 2028, bringing many more landlords and sole traders into MTD
How Many People Have Signed Up for Making Tax Digital?
More than 570,000 landlords and sole traders have signed up for Making Tax Digital for Income Tax, and 436,000 have filed their first quarterly update. Meanwhile, HMRC expects around 864,000 people to be within MTD for Income Tax in 2026/27.
HMRC’s Director of Making Tax Digital, Craig Ogilvie, described the 436,000 first quarterly updates as “an important milestone” in the GOV.UK press release issued on 12 August. But there is another way to look at the announced numbers. Over half of the people HMRC expects to be caught by MTD this year have already filed, but hundreds of thousands still have not.
But that should not reassure you. Because HMRC is not going to wait for you to get around to it. From September 2026, it will start signing up eligible taxpayers who have not signed up to MTD themselves. In other words, the window for sitting on the sidelines is closing. The people who got ready have already started filing; those who haven't are being brought into the system whether they are ready or not.
Does Making Tax Digital Apply to You Though?
According to the Income Tax (Digital Obligations) Regulations 2026, which came into force on 1 April 2026 under powers in Schedule A1 to the Taxes Management Act 1970, MTD applies to you once your qualifying income crosses a set threshold.
To confirm your thresholds and understand when MTD comes into effect for you, use our free eligibility checker.
Worked Example: Your Rental Income is Under £50,000. Does MTD Still Apply?
Imagine Anne. She owns a rental property that brings in £38,000 in annual rent. She has no reason to think Making Tax Digital applies to her because £38,000 is below the £50,000 threshold for this year.
But Anne also works as a freelance consultant and earns another £15,000 a year.
For MTD purposes, those two sources of income are looked at together. Her qualifying income is therefore £53,000, which puts her above the £50,000 threshold for 2026/27.
Now consider Ben. He also receives £38,000 in annual rent, but he has no self-employment income. His qualifying income is therefore £38,000, leaving him outside MTD for 2026/27.
Header | Anne | Ben |
|---|---|---|
Rental Income (Gross) | £38,000 | £38,000 |
Self-Employment Income (Gross) | £15,000 | £0 |
Qualifying Income | £53,000 | £38,000 |
Above £50,000 Threshold for This Year? | Yes | No |
MTD Start Date | 6 April 2026 | 6 April 2027 |
The difference is simple but important. Anne's rent is below £50,000, but her total qualifying income is not. That means MTD already applies to her, and if she missed the first quarterly update on 7 August 2026, she is already behind.
Ben has more time, but not much. His £38,000 of rental income will put him above the £30,000 threshold from April 2027, bringing him into MTD then.
So don't look at your rental income in isolation. If you have income from self-employment as well as property, the two can put you over the MTD threshold even when your rent alone is below £50,000.
What Happens from September 2026 If You Haven't Signed Up to MTD?
From September 2026, HMRC will start signing up eligible landlords and sole traders who have not signed up for Making Tax Digital themselves. The process will happen in stages over the following months, so if you are within MTD but are still sitting on the sidelines, do not assume HMRC will simply leave you alone.
This matters because you are already supposed to be keeping digital records and sending quarterly updates if MTD applies to you. If you missed the 7 August deadline, you are already behind. Waiting for HMRC to sign you up does not reset the clock or wipe out the work you should already have done.
New HMRC guidance is due in later this month (August 2026) explaining what taxpayers should do when they receive a letter telling them they have been signed up. But there is little advantage in waiting for that letter. If you sign up yourself, you can check your details, choose software that works for you and get everything in place before HMRC comes looking for you.
You can sign up for MTD from GOV.UK.
Conclusion
If your combined self-employment and property income topped £50,000 in 2024/25, Making Tax Digital already applies to you, and the “I'll deal with it later” window is closing from September. Getting set up isn’t hard, but getting it right is fiddlier than it looks once joint ownership, mixed income streams, or non-resident status enter the picture.
That’s why you need to look at RentalBux. Designed by accountants for landlords who are done with spreadsheets and the self-employed who need the same calm. RentalBux covers domestic and foreign property, auto-splits joint ownership profits, and files quarterly MTD updates directly to HMRC. All in one platform.
Introducing RentalBux: Our MTD Software for Landlords
Generic software doesn't understand property businesses and require manual intervention to meet deadlines. That's why we developed RentalBux!
FAQs
No. MTD for Income Tax is currently only mandatory for self-employed people and landlords whose qualifying income was more than £50,000 in 2024/25. This threshold falls to £30,000 from April 2027 and £20,000 from April 2028.
Check your qualifying income for 2024/25. If you were registered for Self Assessment and your combined gross income from self-employment and property was more than £50,000, you needed to start complying with MTD from 6 April 2026.
There is no separate UK “digital tax.” The term usually refers to Making Tax Digital, which changes how certain taxpayers keep records and report income to HMRC. MTD does not create a new tax.
From 6 April 2026, MTD for Income Tax applies to landlords and sole traders with qualifying income over £50,000 from self-employment, property, or both. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028. Some people may qualify for an exemption, so being above the threshold does not automatically mean you have to use MTD.
Not necessarily. You can manage MTD yourself using MTD-compatible software if you are confident in your abilities. Otherwise, you can authorise an accountant or to manage it for you. An accountant is optional.
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