If you’re a sole trader who should already be using Making Tax Digital for Income Tax but haven’t signed up, there’s an important change coming.
From September 2026, HMRC plans to start automatically signing up people it believes should already be within MTD.
That’s something to be aware of.
HMRC signing you up doesn’t mean your bookkeeping is ready or your quarterly updates are taken care of. You will still be responsible for keeping digital records and meeting the MTD requirements that apply to your business.
HMRC will also be working from information it already holds about you, which may include details from previous tax returns. If those records are out of date, they may not reflect your business today.
If you think MTD should already apply to you, it makes sense to check where you stand now rather than waiting for HMRC to make the first move.
Should you already be using MTD?
MTD for Income Tax became mandatory from 6 April 2026 for qualifying sole traders with gross income from self-employment and property above £50,000.
HMRC originally estimated that around 864,000 taxpayers would enter MTD in this first phase.
By 12 August, more than 570,000 had registered and over 436,000 had successfully submitted quarterly updates.
If you should have joined but haven’t, HMRC may now identify you for automatic sign-up.
What happens from September?
HMRC plans to begin automatically signing up taxpayers it believes should have joined MTD from April 2026. This will happen in stages over the following months.
If HMRC signs you up, you should receive a letter or digital message explaining what has happened and what you need to do.
But registration is only part of the process.
You will still need compatible software, appropriate digital records and a way to submit the information HMRC requires.
If your bookkeeping isn’t ready for MTD, you will need to get that sorted.
Check what HMRC knows about your business
HMRC may ask people it signs up automatically to check the business information held on their tax account.
This is important because HMRC could be using information from previous tax returns.
Your circumstances may have changed since then. A business may have stopped trading, or the way you earn your self-employed income may have changed.
Checking your details helps make sure HMRC is expecting MTD updates for the right business.
Already missed your first quarterly update?
If you should have been using MTD from April but haven’t submitted your first quarterly update, don’t wait for HMRC to sign you up.
Getting your bookkeeping up to date now will help you understand what has been missed and what needs to happen next.
It is also worth remembering that MTD changes how your records are managed throughout the year. Your bookkeeping needs to remain current so the required information can be submitted to HMRC when it is due.
How Brease can help
Brease is designed for sole traders who want a simpler way to manage their accounts and stay compliant.
Your accounting software is included, together with ongoing bookkeeping and support from real accountants.
If your records have fallen behind, we can help bring them up to date before moving you onto regular monthly bookkeeping.
Once everything is in place, we keep your records current so you’re ready for your MTD requirements and your year-end tax return.
What if MTD doesn’t apply to you yet?
MTD is being introduced in stages.
Under the current timetable, it is due to extend to qualifying income above £30,000 from April 2027, followed by those above £20,000 from April 2028.
If you expect MTD to apply to you at one of these stages, you don’t need to wait until the deadline to prepare.
Getting your bookkeeping organised beforehand can make the move to MTD much easier.
Not sure where you stand?
If you should already be using MTD, have missed your first quarterly update or aren’t sure when MTD applies to you, Brease can help you work out what needs to happen next.
We’ll help get your bookkeeping organised and keep your records up to date, with the software and accounting support included.
Don’t wait for HMRC to make the first move.
Get your instant Brease quote and see how simple staying on top of your sole trader accounts can be.
Looking for more simple business advice?
This guide is part of the Brease Guides collection, created to help sole traders understand bookkeeping, tax and Making Tax Digital without the jargon.
