More than 275,000 landlords and sole traders who should be using Making Tax Digital for Income Tax had still not signed up, six months after the scheme launched. That is the reported picture, and HMRC is now closing the gap itself. Automatic sign-up began in September 2026, and auto-enrolment letters are landing now. If you are in the first cohort and you have not signed up, you may soon find HMRC has done it for you.
This is a news piece about the sign-up gap. It is not a how-to guide. For the step by step deadlines, see our companion guide on the second quarterly update.
The reported numbers, stated plainly
Read the figures below as reported figures, not as GOV.UK verified figures. They come from the National Residential Landlords Association (NRLA) analysis of HMRC figures, reported by Landlord Knowledge on 16 October 2026.
HMRC estimates 864,000 people fall into the first MTD cohort. That cohort covers sole traders and landlords with qualifying income over £50,000. Only 588,204 had registered as of last month. That leaves more than 275,000 people still outside the system.
The gap does not stop at sign-up. Of those who had signed up, only 535,374 had submitted quarterly updates. That leaves more than 52,000 reports missing.
HMRC itself reported a consistent trajectory in August. In 436,000 sole traders and landlords make their tax digital, HMRC said over 570,000 customers had signed up and over 436,000 had sent their first quarterly update. The September figures reported by the NRLA sit on the same upward line. They also show how much ground remains.
What automatic sign-up means for you
HMRC began signing up customers in batches in September 2026. It writes to people who should be in the scheme but have not registered. The letter pulls you into MTD. You do not choose the timing. You may not have chosen your software. You may not have checked that your opening records are correct.
That last point matters most. Landlords who join part way through the year must still create digital records back to 6 April. Your first quarterly update must cover the full period from the start of the tax year. If your records are incomplete, you start MTD on the back foot.
There is one more wrinkle worth knowing. One trade write-up on the auto sign-up notes that HMRC does not copy the customer’s accountant into the letter. Your accountant may not know you have been auto-signed-up. If you use an accountant, tell them if a letter arrives. Do not assume they have seen it.
Craig Ogilvie, HMRC’s Director of Making Tax Digital, put the case for signing up yourself in HMRC’s own words: “If you haven’t yet signed up, now is the time to do so. Taking action now means you stay in control, can make sure your Making Tax Digital for Income Tax details are correct from the start, and have time to choose the software that works best for you, rather than waiting for HMRC to sign you up from September.”
Signing up yourself keeps three choices in your hands: your software, your records, and your timing. Auto-enrolment takes the timing away, and it can leave the other two unchecked.
The 7 November deadline still stands
The second quarterly deadline for 2026/27 falls on 7 November 2026. That date is a Saturday. It is the deadline for the second quarterly update, not a new sign-up deadline. But the two are linked. You cannot send a quarterly update through MTD software until you are signed up and your software is linked.
The annual return still matters too. Your Self Assessment return remains due by 31 January. It cannot be filed if the final quarterly update for the year is missing. Quarterly updates are short summaries, not tax returns. They still gate the final return.
There is good news on penalties for this year. There are no penalty points for missed quarterly updates in 2026/27. That is the first-year easement. Penalty points start from the Q1 deadline on 7 August 2027. Four points mean a £200 fine. The easement gives you breathing room. It does not remove the deadlines.
For the wider rules, read our Making Tax Digital guide. HMRC’s own Making Tax Digital for Income Tax collection gathers its step by step guidance in one place. For what happens when a deadline is missed next year, read MTD penalty points explained.
What to do this week
Check first whether you are in scope. The first cohort test uses qualifying income over £50,000 from self-employment and property. Qualifying income is gross income before expenses are taken off. If your 2024/25 qualifying income was over £50,000, you should be in MTD now.
Then check your sign-up status. If you have not signed up, sign up yourself rather than waiting for a letter. Choose software that fits your records, and link it before you try to send an update.
Then rebuild your records back to 6 April if you have not kept digital records all year. Your first update must cover the year to date, not just the weeks since you signed up.
Finally, tell your accountant about any HMRC letter the day it arrives. Auto-enrolment can move faster than your agent’s inbox.
Who comes next
The threshold falls to over £30,000 from 6 April 2027. HMRC estimates around 1,077,000 more sole traders and landlords will join then. It falls again to over £20,000 from April 2028. The sign-up gap in the first cohort is a warning for the second. Early sign-up beats a forced entry with unchecked records.
Frequently asked questions
Am I in the first MTD cohort?
You are in the first cohort if your qualifying income from self-employment and property was over £50,000 in 2024/25. Qualifying income is gross income before expenses. Employment income and dividends do not count toward it.
What happens if HMRC signs me up automatically?
HMRC signs you up in batches and writes to you. You then need compatible software and digital records back to 6 April. You do not get to choose the timing, so check your records as soon as a letter arrives.
Do I still need to meet the 7 November deadline if I was auto-enrolled?
Yes. The second quarterly update for 2026/27 is due on 7 November 2026. You need to be signed up and linked to software to send it.
Will I be fined for a missed quarterly update this year?
No penalty points apply to late quarterly updates in 2026/27. Points start from the Q1 deadline on 7 August 2027, and four points mean a £200 fine. Late tax returns and late payments still carry their own penalties.
Can I still file my annual return if a quarterly update is missing?
No. Your annual return cannot be filed if the final quarterly update for the year is missing. Quarterly updates are short summaries, but they are a required step before the final return.
Should I tell my accountant about an auto-enrolment letter?
Yes, straight away. HMRC does not copy your accountant into the letter, so your accountant may not know you have been signed up unless you tell them.
Disclaimer
This guide provides general information about Making Tax Digital sign-up and quarterly updates as of October 2026. Tax rules and government announcements can change. Nothing in this article is tax advice. Always consult with a qualified tax professional about your specific circumstances. That’s what we’re here for. In accordance with our normal practice we give this reference in good faith and in confidence, without legal liability on the part of the author or the company. The author assumes no responsibility or liability for any errors or omissions in the content of this site
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