Blog | by Rob Young | August 2026
What to Do If HMRC Has Automatically Signed You Up for Making Tax Digital
Rob Young
HMRC has stopped waiting for people to sign up to Making Tax Digital for Income Tax themselves. Since April 2026, anyone who meets the qualifying income threshold and hasn't already registered is now being signed up automatically, based on the most recent tax return HMRC holds on file. For most people that's a formality. For a smaller number, it's the first sign that HMRC's records don't quite match reality, and that's worth catching early rather than in the middle of a quarterly deadline.
Why has HMRC signed me up for Making Tax Digital automatically?
From 6 April 2026, anyone with combined self-employment and property income over £50,000 in the 2024 to 2025 tax year has needed to use it, keeping digital records and sending HMRC quarterly updates rather than filing once a year. We covered who's affected by that £50,000 threshold in detail in our guide to Making Tax Digital for Income Tax. Previously, the expectation was that people in scope would register themselves once they realised they qualified. HMRC has now moved to a more direct approach: if its records show you should be using the scheme for the 2026 to 2027 tax year and you haven't signed up, it will sign you up on your behalf, using the income figures from your last submitted Self Assessment return.
The logic is straightforward from HMRC's side. A large group of people who should already be in the system weren't, often simply because they hadn't registered, not because they were trying to avoid it. Automatic enrolment closes that gap without HMRC having to chase each person individually. The practical effect for you is that a letter or online notice can arrive without any action on your part triggering it, which is exactly what caught out a client of ours who assumed, reasonably enough, that nothing changes unless you actively do something.
What do I need to check once I've been signed up?
The single most important thing to check is whether the income figure HMRC used still reflects your current situation, since it's based on your last submitted return rather than anything more recent. If you've picked up new self-employment income or a new rental property, in the UK or overseas, since that return was filed, it needs adding to the picture. Equally, if a source of income shown on that return has since stopped, whether that's a property you've sold or a self-employment activity you've wound down, HMRC needs to know, because it changes whether the threshold is still being met.
You'll also need compatible software before your first quarterly update is due. It doesn't work through the ordinary Self Assessment portal; it requires software that can keep digital records and submit updates directly to HMRC, so this isn't something to leave until the week before a deadline if you haven't already got something in place. This is one of the areas where having a bookkeeper and tax adviser who are the same team, rather than separate people who don't talk to each other, genuinely helps: at LYA, clients typically deal with one dedicated contact who is cross-trained across bookkeeping and personal tax, so the quarterly submissions and the annual picture are handled by someone who already knows the whole client, not just one slice of it.
What if HMRC has got it wrong and I don't think I need to use it?
Automatic sign-up is based on historical data, and historical data isn't always current. If you genuinely don't think you meet the threshold for the 2026 to 2027 tax year, perhaps because income has dropped or a property has been sold, you don't have to simply accept the sign-up. HMRC's own guidance is clear that you can contact its Self Assessment team directly if you've been signed up and don't believe you need to use it.
If we're already acting for you, this is exactly the kind of thing to raise with us rather than HMRC directly, since agents have their own dedicated line for disputing a client's enrolment and it's usually quicker to resolve that way. Don't assume a letter from HMRC is automatically correct just because it came from HMRC. Records lag reality more often than people expect, particularly where income has changed significantly between one tax year and the next.
What if I can't use digital software?
There's a genuine exemption route if you're digitally excluded, meaning it isn't reasonably practicable for you to use software for reasons such as age, disability, location or religious belief. This isn't a loophole to reach for out of general reluctance to change how you keep records; HMRC assesses applications individually, and it exists for people who have a real, practical barrier rather than a preference for doing things the old way.
If you think this applies to you, it's worth applying for the exemption directly rather than simply ignoring the sign-up and hoping it resolves itself, since an unresolved obligation sitting on your record can create its own complications later, even if you were never realistically going to be penalised for missing an early quarterly update.
What happens if I miss a quarterly update in the first year?
HMRC has confirmed there are no penalty points for missed quarterly update deadlines during the 2026 to 2027 tax year, which gives some breathing room while everyone, agents included, gets used to the new rhythm. That said, this isn't a blanket amnesty: the final declaration and the tax payment deadline of 31 January following the end of the tax year remain fully enforceable, so the leniency applies specifically to the in-year quarterly submissions, not to the year-end position.
It's worth not reading the lack of quarterly penalties as a reason to deprioritise this altogether. The quarterly updates exist to build the habit of keeping digital records as you go, and businesses that treat the first year as optional tend to be the ones scrambling to reconstruct a year's worth of records in December, which is a considerably worse way to spend a week than doing four short updates through the year.
A quick five-point check if you've been automatically signed up
1. Confirm the income figure HMRC used still matches your current self-employment and property income, including anything new since your last return.
2. Report any income source shown on your last return that has since stopped.
3. Get compatible software in place before your first quarterly update is due, if you don't have it already.
4. If you genuinely don't think you meet the threshold, contact HMRC's Self Assessment team, or ask your agent to raise it through the agent dedicated line.
5. If a real, practical barrier stops you using digital software, apply for the digital exclusion exemption rather than simply ignoring the sign-up.
Frequently asked questions
Will I be penalised for missing a quarterly update in 2026 to 2027?
No. HMRC has confirmed there are no penalty points for missed quarterly updates during the first year of a mandate. The final tax return and the 31 January payment deadline are still enforceable in the normal way.
Does this affect landlords as well as the self-employed?
Yes. The £50,000 threshold is based on combined self-employment and property income, so a landlord with no self-employment income at all can be brought into it on rental income alone, and the same applies in reverse for a self-employed person with no property income.
Can my accountant deal with this for me?
Yes, if they're already acting as your agent. An agent can check the position on your behalf, raise a dispute with HMRC through the agent dedicated line if the sign-up looks wrong, and manage the quarterly submissions using compatible software.
Need help checking where you stand?
If you're not sure whether the £50,000 threshold applies to you, or you've received a sign-up notice and want a second opinion before you do anything, the LYA team can check your position properly rather than you having to guess. Email support.london@loveyouraccountants.com or call 01372 374143, or book a free consultation and we'll tell you where things actually stand.
Author
Rob Young
Rob is Managing Director at LYA, supporting ambitious businesses to scale with confidence through clear planning and proactive financial insight.
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