ACCA
ACCA Approved Employer - Gold
HMRC starts auto-enrolling taxpayers into MTD and checking landlord income data from Sept 2026. See what UK accounting firms need to do now.
HM Revenue & Customs has quietly shifted gear. For the first two years of Making Tax Digital (MTD) for Income Tax, HMRC largely waited for sole traders and landlords to sign themselves up. From September 2026, that changes. HMRC is now moving to automatic enrolment for anyone it believes should already be in the scheme and, separately, it has started writing to landlords whose declared rental income does not match the data HMRC holds from third parties. Together, these two developments point to the same conclusion: HMRC’s compliance approach has moved from encouragement to enforcement, and UK accounting practices need to be ready for what comes next.
Making Tax Digital for Income Tax became mandatory on 6 April 2026 for sole traders and landlords with qualifying income above £50,000, based on their 2024-25 tax return. Under the regime, affected taxpayers must keep digital records and submit quarterly updates to HMRC using MTD-compatible software, followed by an end-of-year submission in place of a traditional Self Assessment return.
The first quarterly update deadline, 7 August 2026, gave HMRC its clearest picture yet of how sign-up was actually going — and the numbers show a meaningful compliance gap.
Metric | Figure | As of |
Taxpayers registered for MTD (2026-27) | 570,000+ | 7 Aug 2026 |
Taxpayers who filed first quarterly update | 436,000+ | 7 Aug 2026 |
Total taxpayers expected to fall in scope | 864,000 | 2026-27 tax year |
Estimated taxpayers to be auto-enrolled | ~294,000 | From Sept 2026 |
Qualifying income threshold (current) | £50,000+ | Based on 2024-25 return |
Threshold drops to £30,000 | From April 2027 | Confirmed |
Threshold drops to £20,000 | From April 2028 | Confirmed |
That gap is exactly what HMRC is now moving to close. Craig Ogilvie, HMRC’s Director of Making Tax Digital, put it plainly: taxpayers who haven’t yet signed up should do so now, because “taking action now means you stay in control, can make sure your Making Tax Digital for Income Tax details are correct from the start, and have time to choose the software that works best for you, rather than waiting for HMRC to sign you up from September.”
From September 2026, HMRC will begin enrolling the remaining eligible taxpayers in stages, using income data from the 2024-25 tax year already on file. Affected individuals will be notified by letter or digitally, depending on their stated communication preference — and HMRC will not send a separate copy to the agent, so practices will need to rely on clients forwarding that notice or check the agent toolkit themselves.
Emma Rawson, Director of Public Policy at the Association of Taxation Technicians, described the move as sending “a clear message that MTD is not optional.” Tax professionals broadly agree: this is HMRC signalling that the voluntary phase of MTD is effectively over.
HMRC has confirmed it will not issue penalty points for late quarterly updates during the 2026-27 tax year, and one missed deadline only earns a single penalty point in HMRC’s points-based system regardless. Four points within 24 months triggers a £200 fine, with a further £200 for each subsequent failure. In other words, there’s room to get systems right this year without immediate financial pain – but that window will not last, and the points clock is already running for anyone already signed up.
Running alongside the MTD rollout, HMRC has started writing directly to landlords where the rental income on file doesn’t line up with information HMRC receives from third-party sources — letting agents, property portals, and other data-sharing arrangements. The letters ask recipients to review whether all rental income has actually been declared.
This isn’t a one-off exercise. It reflects a broader pattern: HMRC increasingly has independent visibility into income that used to rely on self-reporting, and it is willing to act on mismatches without waiting for a return to be flagged manually. For landlords who are also newly required to keep digital records under MTD, the practical effect is that both the reporting method and the accuracy of what’s being reported are now under closer, more automated scrutiny at the same time.
For practices, this is less about any single client and more about volume. Every client HMRC auto-enrols is a client who needs software set up, historic records digitised, and quarterly deadlines tracked – on top of existing workloads. Firms serving UK landlords and sole traders are already dealing with tighter margins and stretched staff during a period when HMRC’s own compliance activity is accelerating, not slowing down.
This is precisely the gap that outsourced accounting services for UK accounting firm teams are built to close. Rather than hiring and training in-house staff to absorb a temporary compliance surge, practices can hand off MTD onboarding, digital record migration, quarterly update preparation, and landlord income reconciliation to a dedicated offshore team working inside the firm’s existing software and processes – scaling up during the current enrolment wave without a permanent headcount commitment.
Feeling the MTD squeeze on your practice? As HMRC moves from voluntary sign-up to automatic enrolment, UK accounting and bookkeeping firms are under real pressure to onboard, verify and digitally maintain more clients without expanding headcount. This is exactly where outsourced accounting services for UK accounting firm teams – like the ones we build at LekhaWekha – take the load off your desk: MTD-ready bookkeeping, quarterly update preparation, landlord income reconciliation, and CT1/VAT support, delivered by a dedicated offshore team that plugs straight into your existing software and workflow. Learn more at lekhawekha.com – outsourced accounting support built for UK, Ireland and US practices. |
HMRC has confirmed automatic enrolment will begin in stages from September 2026, targeting taxpayers whose 2024-25 tax return shows qualifying income over £50,000 and who have not yet signed up voluntarily.
No penalty points are being issued for late quarterly updates during the 2026-27 tax year. However, being auto-enrolled does not exempt a taxpayer from correctly maintaining digital records and meeting future quarterly deadlines.
Review the rental income and expenses shown against your own records and any letting agent or platform statements, and correct any discrepancy promptly. These letters are prompts to review, not formal enquiries — but ignoring one can lead to a formal enquiry.
Yes, for those within MTD for Income Tax. Taxpayers who join for the 2026-27 tax year will file an end-of-year submission through MTD-compatible software instead of a traditional Self Assessment return.
LekhaWekha (part of AskUs Consultants LLP) provides outsourced accounting and bookkeeping support for accounting practices across the UK, Ireland and USA, with jurisdiction-specific compliance expertise including HMRC and Making Tax Digital, Revenue and CRO requirements, and IRS and AICPA standards. Learn more at lekhawekha.com.
Global Trust Markers
ACCA Approved Employer - Gold
ICO Registered
IPA Registered
IFA Registered
GDPR Compliant
© 2026 All Rights Reserved. ASKUS CONSULTANTS LLP. Powered by Maddog Global LLP
