HMRC is beginning phased automatic sign-up from September 2026 for people required to use Making Tax Digital (MTD) for Income Tax in 2026-27 who have not already enrolled.
The regime became mandatory on 6 April 2026 for individuals registered for Self Assessment whose qualifying income exceeded £50,000 in the 2024-25 tax year. This can include private-hire drivers operating as sole traders where their income meets the test.
HMRC says it will identify people who need to use MTD and sign them up in stages, contacting them afterwards. People who believe they should not be in the service can ask HMRC to review their circumstances. Those who are required to use MTD can also sign up themselves if they have not yet been contacted.
The £50,000 threshold is based on qualifying income, not profit. Qualifying income is the total income from self-employment and property before expenses, also described as turnover. Vehicle costs, fuel, insurance, platform charges and other business expenses therefore do not reduce the figure used to decide whether someone crosses the threshold.
More than one self-employment or property-income source can be combined for the test. PAYE earnings, dividends, pensions and an individual’s partnership profit share are not included in the qualifying-income calculation.
For app-based private-hire work, drivers should not assume that the amount paid into their bank account by a platform is automatically the relevant MTD figure. HMRC’s platform-income guidance says an annual platform report may show earnings after fees, commission or tax deductions. Such a report does not replace the individual’s own business records or tax calculations.
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Eligibility is assessed using the preceding tax year’s submitted Self Assessment return. HMRC says individuals should also check their own qualifying income even if they have not received a letter.
Once within MTD, taxpayers must use compatible software to create and retain digital records, send quarterly summaries of income and expenses, and submit their tax return through the system. The quarterly updates are summaries rather than tax returns. The final tax-return deadline remains 31 January after the end of the relevant tax year.
For people entering the system in 2026-27 using standard update periods, the first quarterly update was due by 7 August 2026. The further deadlines are 7 November 2026, 7 February 2027 and 7 May 2027.
HMRC says it will not apply penalty points for late quarterly updates during 2026-27 to people required to start MTD from 6 April 2026. This first-year treatment does not remove the underlying obligations to keep digital records and submit updates.
The rollout is due to expand further. The threshold falls to more than £30,000 of qualifying income for the 2025-26 tax year, requiring MTD from 6 April 2027. It then falls to more than £20,000 for 2026-27, with mandatory entry from 6 April 2028.
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Sources
- Check what to do if HMRC has signed you up for Making Tax Digital for Income Tax
- Work out your qualifying income for Making Tax Digital for Income Tax
- Use Making Tax Digital for Income Tax: Before you use this guide
- Selling goods or services on a digital platform
- Sign up for Making Tax Digital for Income Tax
