Making Tax Digital · Sole traders
HMRC's September 2026 MTD sign-up process: what it means for you
ONLY£15A MONTHHMRC has published guidance explaining that it will sign up certain people who were required to use MTD Income Tax for 2026/27 but have not done so.
HMRC has published guidance explaining that it will sign up certain people who were required to use MTD Income Tax for 2026/27 but have not done so. The process begins from September 2026 and takes place in stages. Automatic sign-up does not automatically create complete business records.
What HMRC has confirmed
HMRC says the process concerns people whose records indicate qualifying income above £50,000 in 2024/25 and who need to use MTD for 2026/27. It will contact people after sign-up, through post or HMRC online services depending on circumstances. Read the official sign-up guidance.
The process is staged over the coming months, so it should not be described as everyone being enrolled on one September date. Nor should a national adoption figure be repeated without a verified publication explaining its date and scope.
What remains for the taxpayer
Check the notice and your circumstances, including any relevant exemption or change. Choose suitable software, establish access and recover the digital records required from the relevant start date.
If an accountant acts for you, tell them about the notice and confirm who will complete the next steps. HMRC sign-up is separate from appointing an agent, connecting bank accounts and submitting updates.
Worked example: a notice arrives
A sole trader receives confirmation that HMRC has signed them up. They check the message through their established HMRC access, confirm the relevant income and discuss the position with their accountant.
The next task is identifying missing records and reporting, not assuming HMRC has imported the bank history or prepared the quarterly update on their behalf.
Where this fits into Making Tax Digital
For 2026/27, the first mandatory phase generally covers individuals whose combined qualifying self-employment and property income was more than £50,000 in 2024/25, subject to exemptions. Qualifying income normally means income before expenses. It is a different figure from taxable profit. Check the qualifying-income rules.
Once within MTD, keep the required digital records and send quarterly summaries for each relevant business. The summaries are cumulative from the start of the reporting year. They do not contain your entire personal tax position, and sending one does not itself create a quarterly tax-payment demand.
HMRC does not require accounting or tax adjustments before each quarterly update. Those adjustments and the other information needed for the annual return still have to be completed at the appropriate stage. Keep a review list so a matter deferred until year end is not forgotten. Read HMRC's quarterly-update guidance.
Software can organise the information, but the business facts remain essential. Review the figures you approve rather than assuming that a successful import has also settled every tax question.
Understand the first-year concession
HMRC states that there are no penalties for missing quarterly-update deadlines for the 2026/27 tax year. That concession does not remove the digital-record or quarterly-reporting obligations, and it does not make all tax returns and payments penalty-free. Read the precise penalty guidance.
Outstanding quarterly reporting must be dealt with before completing the relevant annual return. However, a missed August 2026 update should not be described as an automatic penalty on the separate 2025/26 return due in January 2027. The 2026/27 annual-return deadline is January 2028.
After the first-year concession, the points rules apply to missed quarterly deadlines as described by HMRC. Do not assume that multiple businesses create multiple points at the same deadline. Annual-return rules, late-payment penalties and interest require their own checks.
If you have fallen behind, establish what is outstanding and work through the supported catch-up process. Keep evidence of technical problems and contact the appropriate support team with the business, period and error details. The useful next step is a complete record and an accepted update, rather than guessing what a generic warning might mean.
Choose software by the work it needs to do
Start with your actual income sources and records. A sole trade, a UK property business and foreign property can involve different requirements. A product suitable for one set of circumstances is not automatically suitable for every annual-return item you might have.
HMRC's software guidance allows different approaches, including software connected to existing spreadsheets. Check the complete workflow: importing or recording transactions, reviewing the quarterly summary, submitting it, making corrections and completing the annual return.
Try a representative sample that includes a refund, a private transaction, a cash item and an awkward bank description. Ask how the system handles a missing period and how you export records if you leave. These questions are more informative than a long feature list.
Software support and professional tax advice are different services. Confirm who answers each kind of question, when help is available and what the quoted fee covers. Avona.app's entry-level self-service price is £15/month; professional services and additional product capabilities should be checked against the current scope rather than assumed to be included.
Act on the confirmed requirement
Follow the notice and official guidance, retain correspondence and resolve any mismatch in circumstances promptly. Build a complete record and use the supported catch-up process where required. The first-year quarterly penalty concession does not cancel the underlying MTD duties.
Take the next step
Avona.app offers a self-service route from £15/month. Bring your records together, review the figures and choose a workflow that fits your business. For professional help, discuss the scope and total price of Avona Concierge, managed by chartered accountants, before choosing a service.