Making Tax Digital update for sole traders and landlords

September 4th 2026

Unless qualifying for an MTD exemption, sole traders and landlords with qualifying income over £50,000 should have already submitted their first quarterly update for 2026/27. However, of the 864,000 taxpayers required to register for MTD, only 570,000 have done so, with just 436,000 successfully filing so far:

• 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

Sole traders and landlords with income between £30,000 and £50,000 for 2025/26 will join MTD from 6 April 2027, unless they qualify as digitally excluded, with HMRC recently opening up applications for an exemption. Taxpayers might qualify for an exemption if the following applies:

• 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.