From September 2026, HMRC will automatically sign up taxpayers within scope of MTD income tax that have not yet registered themselves, marking a significant shift in the regulator's enforcement approach.
From September 2026, HMRC will begin signing up taxpayers within scope of MTD income tax from April 2026 that have not yet done so themselves. This marks a significant shift in HMRC's approach to Making Tax Digital implementation and signals growing impatience with voluntary uptake.
What This Means for Your Clients
The move reflects HMRC's determination to achieve near-universal coverage of Making Tax Digital for Income Tax (MTD ITSA) by proactive auto-enrolment. Rather than continuing to rely on eligible taxpayers to self-register within the official registration windows, the tax authority is now taking direct action to bring non-compliant filers within the digital reporting regime.
The threshold for mandatory MTD ITSA is trading income above £10,000 per tax year. During August, HMRC sent letters to taxpayers to encourage them to disclose any income from let property and remind them of their responsibilities under Making Tax Digital for income tax. This pre-enrolment communication campaign suggests HMRC has already identified which taxpayers should be on MTD ITSA but have failed to register.
A Two-Tier Strategy
This development should be viewed alongside HMRC's new guidance on applying the tax rules for short-term business visitors to the UK, published on 19 August 2026. HMRC is simultaneously clarifying compliance obligations for specific taxpayer populations while simultaneously enforcing compliance where it identifies gaps. The September auto-enrolment initiative therefore combines both carrot (clear guidance) and stick (automatic registration).
Practical Implications for Practitioners
For accountants and tax advisers, this creates an urgent window for client engagement. If your clients fall within scope but have not yet registered for MTD ITSA, they are now at serious risk of being automatically enrolled by HMRC from September onwards. While HMRC has framed auto-enrolment as a helpful mechanism, the consequences of sudden enrolment—without prior notice or client briefing—could be significant.
Practitioners should:
- Review client registers to identify any trading income sole traders or partners in unincorporated businesses with income above £10,000 in 2025/26
- Verify registration status immediately via HMRC's online services
- Prepare clients for the transition if auto-enrolment becomes necessary, including guidance on quarterly reporting deadlines and compatible digital record-keeping
- Consider the quarterly update cycle, which requires sole traders and landlords required to use MTD to send a first quarterly update by 7 August 2026, with the quarterly update involving income and expenses for the first three months of the tax year
What Changed?
Earlier this year, many sole traders and landlords made the deliberate choice to incorporate to avoid MTD quarterly reporting requirements. Ahead of the 7 August MTD ITSA deadline, 23% of sole traders rushed to incorporate to dodge quarterly reporting, risking heavier administrative burdens and higher compliance costs. That decision reflected resistance to digital compliance. HMRC's September auto-enrolment initiative suggests the regulator is no longer willing to tolerate opt-outs among those above the threshold, irrespective of whether taxpayers prefer to remain unincorporated.
The broader policy direction is clear: digital reporting is no longer optional for qualifying sole traders and landlords. HMRC's auto-enrolment from September will enforce this whether or not practitioners and clients have prepared.