Is HMRC About to Enroll You Into MTD Income Tax?
Published 28 August 2026
You might not have heard much about Making Tax Digital for Income Tax. You might have heard about it and decided to deal with it later.
Either way, later has arrived.
From September 2026, HMRC will begin automatically signing up self-employed people and landlords who should be on MTD Income Tax but have not yet registered. They are not asking. They are not waiting. They are doing it whether you are ready or not.
If that is you, here is what you need to know.
What Is MTD Income Tax and Does It Apply to Me?
MTD Income Tax — Making Tax Digital for Income Tax Self Assessment — changes the way self-employed people and landlords report their income to HMRC.
Instead of completing one Self Assessment tax return per year, you will need to:
Keep digital records of your income and expenses
Submit four quarterly updates to HMRC throughout the tax year
Complete a final declaration at the end of the year
It applies to you if:
You are a sole trader — a builder, contractor, tradesperson, or any self-employed individual
You are a landlord with rental income
Your trading or property income is above £10,000 per tax year
If you tick those boxes and have not yet registered, HMRC is coming for you in September.
Why Is HMRC Automatically Enrolling People Into MTD Income Tax?
HMRC has been pushing MTD Income Tax for some time, but voluntary sign-up has been slow. Many business owners have been putting it off. Some have been hoping it would go away.
It has not gone away.
In August 2026, HMRC wrote to thousands of taxpayers — particularly landlords — reminding them of their MTD Income Tax obligations and asking them to disclose any property income. This was not a friendly nudge. It was a signal that HMRC already knows who should be registered and is preparing to act.
The September auto-enrolment is the next step. HMRC is done waiting.
What Happens If HMRC Auto-Enrols Me Into MTD Income Tax?
Being automatically enrolled without preparation could cause real problems for your business.
Here is why it matters:
You will be immediately obligated to submit quarterly updates — even if you have never heard of them before
You will need compatible digital software — and if you do not have it set up, you will be behind from day one
Deadlines will not be paused while you get organised — HMRC's quarterly reporting cycle does not stop for late starters
Penalties could follow if updates are missed because you did not know you had been enrolled
The difference between registering yourself in advance and being auto-enrolled is the difference between being prepared and being caught off guard.
What Does This Mean for Builders and Construction Business Owners?
If you are a sole trader in construction — a builder, electrician, plumber, groundworker, or any other trade — and your income is above £10,000, you are in scope for MTD Income Tax.
This is particularly important for construction business owners because:
Many trades businesses have irregular income patterns across the year, making quarterly reporting more complex than an annual return
Material costs, subcontractor payments, and CIS deductions all need to be tracked digitally and accurately
If you are juggling multiple jobs or phases, your record-keeping needs to be organised enough to pull together a quarterly update on time
Quarterly reporting is not going away. Getting your records straight now means your first submission will not be a scramble.
What Does This Mean for Landlords and Property Developers?
If you receive rental income above £10,000 per year, you are within scope of MTD Income Tax.
For property developers and landlords, this means:
Rental income and allowable expenses need to be recorded digitally throughout the year — not pieced together at tax return time
Each property's income and costs may need to be tracked separately
Quarterly updates will need to reflect your actual income and expenses for that three-month period
HMRC specifically targeted landlords in its August 2026 letter campaign — asking them to disclose property income and flagging MTD Income Tax obligations. If you received one of those letters and have not acted on it, September is when HMRC acts for you.
What About the People Who Incorporated to Avoid MTD Income Tax?
Earlier in 2026, a significant number of sole traders made the decision to incorporate — setting up a limited company — specifically to move outside the scope of MTD Income Tax quarterly reporting.
In fact, 23% of sole traders rushed to incorporate ahead of the 7 August 2026 deadline to avoid quarterly reporting requirements.
The problem is that incorporating a business brings its own costs and obligations:
Corporation Tax returns and company accounts filed at Companies House
Director's Self Assessment requirements
Payroll and dividend administration
Higher accountancy fees for company accounts versus sole trader accounts
For some businesses, incorporation makes complete commercial sense. For others, it was a knee-jerk reaction to MTD Income Tax that may have created more work and cost than it avoided.
If you incorporated primarily to dodge MTD Income Tax, it is worth having a conversation about whether that decision still makes financial sense for your situation.
What Should You Do Before September 2026?
The good news is that there is still time to get ahead of this — but not much.
Here is what to do right now:
1. Work out whether you are in scope
If your self-employment or rental income is above £10,000 per year, you almost certainly are. If you are not sure, speak to your accountant now.
2. Do not wait for a letter from HMRC
By the time HMRC auto-enrols you, the clock is already ticking on your first quarterly deadline. Getting registered on your own terms gives you time to prepare properly.
3. Get the right software in place
MTD Income Tax requires HMRC-compatible digital software. Options include Xero, QuickBooks, and FreeAgent. Your accountant can advise on the best fit for your business.
4. Understand your quarterly deadlines
The reporting cycle runs throughout the tax year. The first quarterly deadline was 7 August 2026. The next deadlines are coming — make sure you know when they are and what needs to be submitted.
5. Talk to your accountant
If you have not had a conversation about MTD Income Tax yet, now is the time. An accountant who understands your business can make the transition straightforward rather than stressful.
The Bottom Line on MTD Income Tax
HMRC is not offering a choice anymore. If you are a sole trader or landlord above the £10,000 threshold, MTD Income Tax applies to you. The only question is whether you get ready on your own terms or HMRC enrolls you on theirs.
Getting ahead of it now means:
✅ You choose when you register, not HMRC
✅ You have time to set up the right software before your first deadline
✅ You understand what quarterly reporting requires before you have to do it
✅ You avoid the risk of penalties from missed submissions you did not know were due
This article is for general information purposes only and does not constitute financial or tax advice. MTD Income Tax obligations depend on your individual circumstances — always take advice specific to your situation.
Not Sure Where You Stand With MTD Income Tax? Let's Talk.
At B.R. Pusser & Co Ltd, we are helping sole traders, landlords, builders, and property developers understand exactly what MTD Income Tax means for them — and making sure they are set up and ready before HMRC steps in.
We can help you:
Confirm whether you are within scope of MTD Income Tax
Register with HMRC before auto-enrolment kicks in
Set up the right digital record-keeping software for your business
Stay on top of your quarterly deadlines so nothing gets missed
Do not let HMRC catch you off guard. Get sorted before September.
📩 Send us a message or book a free call with Brian today — no obligation, just a straight conversation about what MTD Income Tax means for you and your business.
