By Farhan Nagda FCCA MBA
HMRC is now signing up sole traders and landlords it believes should be in Making Tax Digital (MTD) for Income Tax for 2026/27. If you receive a confirmation letter, the important question is not simply whether you have software. It is whether HMRC’s picture of your income sources still matches your business today.
Why this matters now
The 2026/27 rules generally apply to individuals whose qualifying self-employment and property income exceeded £50,000 in 2024/25, unless an exemption applies. HMRC says it is enrolling eligible people in stages from September 2026 using the tax-return information it holds. A later change to your portfolio or trade may not be reflected in that initial record.
That creates a practical risk: a landlord may assume a sold property has removed them from MTD, or a new overseas letting may be absent from HMRC’s records. Neither conclusion should be made from the letter alone.
Three points worth checking before you confirm
- Which income sources are shown? Compare HMRC’s list with your current UK property business, any foreign property business and any sole trade. UK properties are generally grouped as one UK property business for these purposes; adding another UK letting is not necessarily a separate source.
- When did an activity cease? HMRC’s guidance draws an important distinction between all relevant income ending before 6 April 2026 and ending on or after that date. The reporting consequences are different, so record the dates and obtain advice before treating the enrolment as an error.
- Can your software cover the whole position? Check compatibility with your income sources and reporting periods, not merely whether it advertises itself as “MTD-ready”. If you are already within scope, HMRC expects digital records from the start of the tax year and any overdue quarterly update to be sent.
HMRC has said there will be no penalty points for late quarterly updates in 2026/27. That is breathing space, not an exemption from digital records or filing. The annual tax-return and payment obligations remain important.
Edge’s view
For a property investor, MTD enrolment is a records-and-structure review, not just a software purchase. The first useful exercise is to reconcile the properties, ownership, rental income and any self-employment activity against HMRC’s record. Only then should the reporting workflow be agreed. Where the position has changed or an exemption may apply, deal with that directly rather than building a system around an incorrect assumption.
Edge Accountants can review your MTD scope, reconcile your property income sources, select a suitable digital-record process and manage quarterly compliance. Book a free 30-minute MTD consultation or call 02477 45 5333.
This is general information, not advice on an individual tax position. HMRC guidance and your circumstances should be checked before acting.
