Back in August, we flagged that HMRC planned to start signing up non-compliant sole traders and landlords for Making Tax Digital from September. That’s no longer a plan, it’s happening. HMRC has begun automatically registering an estimated 294,000 taxpayers it believes should already be using MTD for Income Tax for the 2026/27 tax year but haven’t signed up themselves, using data it already holds from 2024/25 Self Assessment returns. If you’re a sole trader or landlord with qualifying income above £50,000 and you haven’t acted, a letter or digital message may already be on its way, or waiting in your HMRC online account.
This is worth taking seriously even if you think it doesn’t apply to you. HMRC is working from historical income data, which means the system can and does flag people whose circumstances have since changed, businesses that have shrunk, ceased trading, or dropped below the threshold. Ignoring the letter because you assume it’s a mistake is the wrong move either way.
What the letter actually asks you to do
Being auto-registered isn’t the same as being compliant. HMRC is asking newly registered taxpayers to complete a “checking step”: confirming whether the department’s records about your business are accurate, including flagging it up if your business has actually ceased trading or your income has dropped below the threshold. If your details are correct and you are in scope, you then need to start keeping digital records and submitting quarterly updates through MTD-compatible software, exactly as if you’d signed up voluntarily. Automatic registration doesn’t do that part for you.
If you get the letter, do this first
Don’t assume the letter is wrong and file it away. Log into your HMRC online account or check your post for the specific confirmation, and work through three questions: is the income figure HMRC is using still accurate, has your trading status changed since 2024/25, and do you already have compatible software in place. If the answer to the last one is no, this is the trigger to sort it now rather than during a live quarterly deadline. Getting digital record-keeping and quarterly submissions set up properly is exactly the kind of practical software task firms like BuildApps help SMEs get right the first time, rather than bolting together a workaround under deadline pressure.
The takeaway
HMRC moving from “you should register” to “we’ve registered you” is a meaningful shift in enforcement posture, and it’s a safe bet this won’t be the last wave. If you’re anywhere near the £50,000 threshold as a sole trader or landlord, check your HMRC account this week rather than waiting for a letter to land.
