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HMRC signed you up for Making Tax Digital: check your records before sending updates
HMRC is signing some sole traders and landlords up to Making Tax Digital for Income Tax. Use this records checklist before you catch up on quarterly updates.
What the September sign-up means
HM Revenue & Customs said on 12 August 2026 that it would start signing up people from September who should already be using Making Tax Digital for Income Tax but had not signed up. The announcement concerns sole traders and landlords whose qualifying income was over £50,000 on their 2024 to 2025 tax return, subject to the available exemptions. The later GOV.UK guidance says HMRC uses the information it holds and contacts a person after the sign-up has happened.
Being signed up is the start of a checking exercise, not a substitute for keeping evidence. For the 2026 to 2027 tax year, compatible software must create and store digital records of self-employment and property income and expenses, send quarterly updates and support the tax return. HMRC describes quarterly updates as summaries rather than tax returns. The full tax bill is still due by 31 January after the tax year ends.
Check the income sources HMRC has recorded
After signing in to the Making Tax Digital service, compare the income-source list with your current bookkeeping. HMRC says the record is based on your 2024 to 2025 return and, if it was filed before HMRC signed you up, your 2025 to 2026 return as well. Check each self-employment and property source, including UK and overseas property. HMRC groups all UK properties as one UK property business and all foreign properties as one foreign property business.
Make a short dated note of anything that does not match. Add a new self-employment or property source that began after your last return, and record when a source stopped. The timing matters: if every source ceased before 6 April 2026, the guidance says you should update the account but do not need to use Making Tax Digital for Income Tax; you must still submit the 2025 to 2026 tax return. If all sources ceased on or after 6 April 2026, you still need Making Tax Digital for Income Tax and compatible software to send a quarterly update covering up to the date the sources ceased and submit the 2026 to 2027 tax return; after that, you will not need to use Making Tax Digital for Income Tax. Those are different cases, so do not close a source merely because trading is quieter.
Reconcile the bookkeeping before you catch up
HMRC’s 7 July Agent Update says software creates totals for each income and expense category from the digital records. It also says a quarterly update is not a tax return and that accounting or tax adjustments do not need to be made before sending it. That does not remove the need to check the underlying records. Before authorising software, compare the transactions you intend to bring into the system with bank statements, invoices, receipts and property records. Keep the original documents or copies used to prepare the figures.
Use one reconciliation note for each income source or property business. Record the period covered, the total brought into software, missing documents, corrections made and the person who approved the change. Separate a bookkeeping correction from an estimate or year-end tax adjustment, and preserve the reason for both. This makes a later question about a quarterly total traceable without presenting an internal checklist as an HMRC requirement.
Catch up and keep an exception trail
The HMRC sign-up guidance tells people to authorise compatible software, check the accounting period, create digital records from the start of the tax year and send any overdue quarterly update as soon as possible. For 2026 to 2027, HMRC says no penalty points are issued for a late quarterly update, but the updates still need to be sent before the tax return can be submitted. Late tax returns and late payments remain separate matters.
Save the sign-up notice, the income-source comparison, software authorisation details, reconciliation notes and submission confirmations together. If you think you do not need to use the service or may be eligible for an exemption, contact HMRC and retain the evidence supporting that position. This article is a preparation guide based on HM Revenue & Customs publications dated 7 July, 12 August and 24 August 2026. It does not decide whether an individual is within scope, calculate a tax bill or predict an HMRC response.
Sources
- HM Revenue & Customs — 436,000 sole traders and landlords make their tax digital (2026-08-12)
- HM Revenue & Customs — Check what to do if HMRC has signed you up for Making Tax Digital for Income Tax (2026-08-24)
- HM Revenue & Customs — Agent update: Making Tax Digital for Income Tax (2026-07-07)