Strategy, Legal & Operations

HMRC-led sign-up for MTD for Income Tax: What accountants need to know

From September 2026, HMRC is signing up sole traders and landlords who are required to use MTD for Income Tax but haven’t registered for it. Here’s what it means for your practice and clients.

Published 7 September, 2026 min read Share

Have any of your clients received an online message or letter from HMRC confirming that they’ve been signed up for Making Tax Digital (MTD) for Income Tax?

As an accountant with sole trader or landlord clients, some of them may be in touch soon with questions for you on what it means and what to do next.

Some of them might be surprised that HMRC has contacted them. Others may be worried that they’ll face a penalty or have done something wrong.

HMRC is automatically signing up taxpayers whose records show they should be using MTD for Income Tax but haven’t signed up for the service, either themselves or via an agent.

In this article, we discuss how the HMRC-led sign-up to MTD works, the actions your clients need to take and how your practice can support them.

Here’s what we cover…

Overview of the HMRC-led sign-up to MTD programme

As you know, MTD for Income Tax came into force in April 2026.

An individual generally needs to use it if they’re registered for Self Assessment, receive income from self-employment or property, their combined qualifying income was more than £50,000 in the 2024/25 tax year, and no exemption applies.

For any eligible taxpayers who haven’t already registered for MTD, either themselves or via an agent, HMRC confirmed it will be signing them up from September 2026.

The current automatic sign-up exercise applies to people required to use MTD for Income Tax for 2026/27 whose records show qualifying income over £50,000 in 2024/25 and who haven’t already signed up.

The sign-up confirmation isn’t, by itself, a penalty notice. HMRC says no penalty points apply for missing quarterly update deadlines for 2026/27.

However, affected clients must still keep digital records, send all required quarterly updates before submitting the tax return, submit the return on time and pay tax due by the relevant deadline.

What the HMRC-led sign-up to MTD actually means

One key point to communicate to any of your clients who are automatically signed up by HMRC is that it doesn’t mean they’re fully set up for MTD for Income Tax.

HMRC has signed up clients using information that it already holds and the process covers the initial registration. It doesn’t complete the setup of MTD or any required compliance work.

That’s where you come in—to review that information and complete a series of follow-up steps. Your practice can play an important role here, helping your clients to meet their required obligations.

Some of them may assume the communications from HMRC confirms everything has been done and they’re ready to use the service.

But actually, additional work that needs to be carried out, including:

• Checking the client’s authorisation and MTD status in the agent services account
• Checking and confirming the client’s income sources
• Setting up digital records and creating them from the start of the tax year
• Choosing and authorising MTD-compatible software
• Identifying any missed obligations.

What accountants need to do if clients receive a letter from HMRC

1. Check your client’s HMRC records and agent authorisation

Start by checking that the records held by HMRC for your client are up to date.

Use the agent services account and the relevant MTD for Income Tax service to confirm that the required authorisation is in place, verify the client’s identity details and status, and review the income sources HMRC has created.

And let your clients know that they should contact your practice straight away if they receive communications from HMRC on being automatically signed up to MTD, especially if anything has changed since their 2024/25 tax return.

Examples include:

• Their self-employment or property business has stopped trading
• They’ve got a new self-employment or property income source
• The income source information is incorrect
• You believe they qualify for an exemption from MTD.

Spotting any issues now and resolving them means the chance of compliance issues cropping up later in the tax year can be reduced.

2. Review software readiness

The HMRC sign-up process provides an opportunity for your practice to identify clients still relying on paper records or who have infrequent bookkeeping processes in place.

As you know, your clients need to use MTD-compatible software and this is a good chance to see who needs to start using it.

Check that the chosen product (or combination of products) supports all of the client’s relevant income sources, their accounting period and the tasks the client or your practice will perform.

An all-in-one solution like Sage Sole Trader might simplify the process for your clients.

It can help them record and categorise transactions, prepare and send supported MTD quarterly updates, and view an indicative tax estimate based on the information entered.

However, your clients remain responsible for checking that records are complete and accurate, and for meeting filing and payment deadlines.

If you’re managing multiple MTD clients, using a consistent software platform may help you to standardise your processes.

3. Support your clients with digital record-keeping

If HMRC has automatically signed your clients up for MTD, there’s a possibility that they’ve not created digital records from the start of the tax year.

That means they might need to do the following:

• Import their bank transactions
• Enter their expenses
• Record any historical income
• Complete any MTD quarterly updates that are overdue.

The level of work required here will depend on how long their MTD preparation has been delayed.

4. Prepare for a rise in queries from clients

If HMRC gets in touch with your clients, they’ll be likely to turn to you first for support. With that in mind, you could prepare the following in advance:

• Standard client communications on MTD
• FAQ documents on the MTD process
• MTD webinars
• MTD onboarding checklists
• Recommendations on software to use
• Information about the support services on offer from your practice.

Having that information in place means you can provide your clients with the support they need.

Preparing reusable communications and checklists may help your practice handle enquiries more consistently. Early engagement may also support service planning and client understanding, too.

Final thoughts

Some of your clients might feel a bit unsettled if they’ve received a letter from HMRC to let them know they’ve been automatically signed up to MTD for Income Tax.

But it provides the ideal opportunity for your practice to support them with MTD. After all, the sign-up process is only the first step.

Your clients will still need to check and verify their information, choose MTD-compatible software, keep up with digital record-keeping, and submit their quarterly updates and tax return. They’ll look to you for support and guidance on all of this.

Take a proactive approach by identifying any clients who may be affected, review their software readiness, put support processes in place and communicate with them regularly.

That’ll help to create new opportunities for your practice and strengthen client relationships.

Browse more topics from this article

• Making Tax Digital for accountants

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