The HMRC will commence the enrolment process for sole traders and landlords who were required to register for Making Tax Digital (MTD) in April 2026 but have not yet completed registration. In preparation for this, HMRC has made available an MTD exemption window for eligible taxpayers who would otherwise be mandated to join beginning next April.
Except for those who qualify for an MTD exemption, sole traders and landlords earning qualifying income exceeding £50,000 should have already filed their initial quarterly return for the 2026/27 tax year. Nevertheless, of the 864,000 taxpayers obligated to register for MTD, only 570,000 have completed registration, and merely 436,000 have successfully submitted their filings to date:
- HMRC has decided to start signing up the remaining taxpayers it believes are within the scope of MTD for 2026/27, rather than wait for those taxpayers to sign up themselves.
- Although no penalty points will be charged for late quarterly updates in 2026/27, HMRC is obviously keen for taxpayers to be aware that MTD is not optional.
Taxpayers signed into MTD by HMRC will receive a letter or digital message depending on contact preferences. They will be advised about the next steps, such as obtaining and using MTD-compatible software.
Exemption window
Self-employed individuals and property owners earning between £30,000 and £50,000 in the 2025/26 tax year will be required to participate in Making Tax Digital beginning 6 April 2027, provided they do not meet the criteria for digital exclusion. HMRC has recently made exemption applications available to eligible taxpayers. Qualification for an exemption may be granted if any of the following circumstances apply:
- Internet access: This means no internet access at home or business because of the location, and where access is not available at a suitable alternative location.
- Age, health or disability: Taxpayers will need to show that their age, health condition or disability stops them from using a computer, tablet or smartphone to keep digital records or submit them to HMRC.
- Religious reasons: This will apply to practising members of a religious society or order whose beliefs mean they do not use a computer, tablet or smartphone for business or personal use.
The fact that additional costs will be incurred, or that extra time will be required for MTD, is not a valid reason for HMRC to grant an MTD exemption.
HMRC guidance on applying for an exemption from MTD can be found here.