MTD No Show: HMRC to Start Signing Up Taxpayers Who Missed the MTD Deadline

MTD No Show taxpayers are now firmly on HMRC’s radar following the first Making Tax Digital for Income Tax quarterly update deadline. HMRC has confirmed that from September 2026 it intends to start signing up taxpayers who should have joined Making Tax Digital (MTD) for Income Tax from April 2026 but have not yet registered.

The development is important for sole traders and landlords who fall within the first mandatory MTD group. An MTD No Show should not assume that failing to register means they can continue using the old Self Assessment process. HMRC intends to identify taxpayers it believes should already be within MTD and bring them into the system automatically.

MTD No Show taxpayers are now firmly on HMRC’s radar. Following the introduction of Making Tax Digital for Income Tax from April 2026, HMRC is preparing to take action where taxpayers who should be using the new system have failed to sign up.

From September 2026, HMRC plans to start automatically signing up eligible taxpayers who have not registered themselves. This means an MTD No Show may be brought into the system based on information HMRC already holds, including details reported through previous Self Assessment tax returns.

For landlords and sole traders affected by MTD, ignoring the new rules is not a solution. Understanding whether you need to register, checking that HMRC holds the correct information and getting your digital records ready now could help prevent unnecessary problems later.

According to figures reported by Accounting WEB, HMRC originally expected around 864,000 taxpayers to be required to join MTD from April 2026. By 12 August 2026, more than 570,000 had registered and over 436,000 had successfully submitted quarterly updates. That leaves a significant number potentially falling into the MTD No Show category.

What Is an MTD No Show?

An MTD No Show is essentially a taxpayer who HMRC believes was required to use Making Tax Digital for Income Tax from April 2026 but has not signed up.

The first mandatory group consists broadly of qualifying sole traders and landlords whose total qualifying income from self-employment and property exceeded £50,000 in the 2024/25 tax year. Qualifying income is based on gross income before expenses and tax rather than taxable profit.

For example, a landlord receiving £30,000 of gross rental income alongside £25,000 of gross self-employment income could potentially be within MTD because the combined qualifying income is £55,000. Looking only at the profit after expenses could therefore give the wrong answer.

An MTD No Show may have missed the requirement for several reasons. Some taxpayers may not realise that their property and self-employment income are combined when considering the threshold. Others may believe their accountant automatically registered them, while some may simply have overlooked HMRC communications.

An MTD No Show is generally a taxpayer who should have joined Making Tax Digital for Income Tax from April 2026 but has not completed the required registration. This mainly affects sole traders and landlords whose qualifying gross income from self-employment and property exceeded £50,000 in the 2024/25 tax year.

Some taxpayers may become an MTD No Show simply because they were unaware that the rules applied to them or misunderstood how the income threshold works. With HMRC now identifying taxpayers who appear to have missed registration, checking your position early can help ensure your records, software and reporting arrangements are ready.

Whatever the reason, an MTD No Show should now review their position rather than waiting for HMRC to contact them.

Why Is HMRC Targeting the MTD No Show?

The first MTD quarterly update deadline for the 2026/27 tax year was 7 August 2026. Shortly afterwards, HMRC confirmed that it would start taking action in relation to taxpayers who should have entered MTD but had not done so.

Starting in September 2026, HMRC plans to sign up taxpayers it identifies as being within the mandatory 2026/27 MTD population. The process is expected to take place in stages over the following months.

The approach sends a clear message: MTD for Income Tax is mandatory for taxpayers who fall within the rules. An MTD No Show cannot simply remain outside the system indefinitely because they have not completed the registration process themselves.

HMRC also has an incentive to bring each MTD No Show into the system early. Although there is a transitional easement from penalty points for late quarterly updates during 2026/27, taxpayers are still legally required to keep appropriate digital records and submit the required updates.

Automatic sign-up should also give an MTD No Show more time to understand the system before completing their first annual tax return through MTD-compatible software.

How Will HMRC Identify Taxpayers?

HMRC is expected to identify an MTD No Show primarily using information contained in the taxpayer’s 2024/25 Self Assessment tax return.

HMRC is expected to identify taxpayers who should be within Making Tax Digital by reviewing information it already holds. In particular, HMRC can use details reported on the taxpayer’s 2024/25 Self Assessment tax return to determine whether their qualifying income was above the £50,000 threshold.

This information may include gross income from self-employment and property. Where the figures indicate that the taxpayer should have entered MTD from April 2026 but no registration has been completed, HMRC may identify them as an MTD No Show and begin the process of bringing them into the system.

However, HMRC’s information may not always reflect a taxpayer’s current circumstances. A business may have ceased trading or a landlord may have stopped receiving rental income since their previous tax return. Taxpayers should therefore check that HMRC holds accurate and up-to-date information and address any discrepancies as soon as possible.

This is significant because circumstances can change after a tax return has been submitted.

For example, a taxpayer may have ceased self-employment, sold a rental property or stopped receiving qualifying property income. HMRC’s historic records may still suggest that the taxpayer has an active business.

This creates a risk that someone could be identified as an MTD No Show even where their current circumstances are different from the information HMRC holds.

Taxpayers and agents should therefore review the position carefully. If HMRC’s records are outdated, it may be better to correct the information before automatic MTD registration takes place.

What Happens When HMRC Signs Someone Up?

Once HMRC automatically signs up an MTD No Show, the taxpayer is expected to receive either a letter or a digital message, depending on their communication preferences. This will explain that they have been brought into MTD and outline what they need to do next.

The taxpayer will still have work to do. Automatic registration does not mean HMRC will maintain the taxpayer’s records or prepare their quarterly updates.

An MTD No Show will need suitable MTD-compatible software, digital bookkeeping records and a process for recording business or property transactions.

HMRC is also expected to ask taxpayers to check its records. Taxpayers may be directed to their Personal Tax Account or Business Tax Account, while agents can review information through their Agent Services Account.

The account should show the businesses HMRC believes are active and subject to MTD. The taxpayer or agent should then be able to confirm the information, remove businesses that are no longer active and add businesses that are missing.

This checking stage is particularly important for an MTD No Show because HMRC’s decision may have been based on historic Self Assessment information.

Digital Records Still Need to Be Created

Automatic registration does not remove the digital record-keeping requirement.

Taxpayers within MTD for Income Tax are required to use compatible software to create and maintain digital records of relevant business income and expenses. They must also use compatible software to send quarterly updates and ultimately complete their tax return.

An MTD No Show signed up partway through the year may therefore need to bring their records up to date from the beginning of the relevant accounting period.

For many businesses with a 5 April year-end, this means ensuring appropriate digital records exist from 6 April 2026.

This could create additional work for an MTD No Show who has continued using paper records, spreadsheets that are not properly integrated with MTD software, or another bookkeeping method that does not satisfy the digital requirements.

Acting early can make the transition considerably easier.

Do Missing Quarterly Updates Need to Be Submitted?

There is some welcome transitional relief for the first year.

HMRC has confirmed that penalty points will not be applied for late quarterly updates during the 2026/27 tax year. However, this does not mean quarterly reporting has been cancelled or made optional.

AccountingWEB reports that because quarterly updates are cumulative, an MTD No Show brought into the system later in the year should not necessarily need to separately backfile every earlier missing quarterly update. The position can instead be brought up to date through a later cumulative submission.

This could significantly reduce the administrative burden for an MTD No Show who enters MTD after one or more deadlines have passed.

Nevertheless, the taxpayer still needs to comply with MTD. Before the 2026/27 tax return can ultimately be completed through MTD-compatible software, the necessary quarterly information will need to have been provided.

The absence of penalty points in the first year should therefore be treated as transitional breathing space rather than permission to ignore MTD.

What Are the Quarterly Deadlines?

For the 2026/27 tax year, HMRC lists the quarterly update deadlines as:

• 7 August 2026
• 7 November 2026
• 7 February 2027
• 7 May 2027

There are no penalties for missing a quarterly update deadline in 2026/27, but taxpayers must still keep digital records and send their quarterly information before completing their tax return.

For an MTD No Show, this makes it important to establish a reliable bookkeeping process now rather than leaving everything until the end of the tax year.

Should You Wait for HMRC to Sign You Up?

In most cases, an MTD No Show who knows they should already be within MTD should consider taking action rather than simply waiting for HMRC.

Taxpayers and agents can still complete the sign-up themselves before HMRC does it automatically. AccountingWEB highlights several advantages of taxpayer or agent-led registration, including greater control over the timing and the opportunity to check HMRC’s information before filing obligations are created.

There may also be practical advantages where a taxpayer operates multiple businesses. For example, an agent-led sign-up may provide an opportunity to ensure business names are clear and correctly identified.

Most importantly, dealing with an MTD No Show proactively gives the taxpayer time to select software, organise bookkeeping records and understand the quarterly reporting process without the pressure of receiving an unexpected HMRC letter.

What If HMRC Has Incorrectly Identified You?

Not every apparent MTD No Show will necessarily need to be within MTD.

A taxpayer’s circumstances may have changed since the 2024/25 tax return. A trade could have ceased, a rental business could have ended, or the taxpayer may qualify for an exemption.

HMRC guidance confirms that exemptions can apply in certain circumstances, including where a taxpayer is digitally excluded. Taxpayers who are exempt from MTD must continue reporting through Self Assessment rather than following the MTD process.

AccountingWEB also notes that while some exemptions are automatic, others require an application to HMRC.

If you believe you have incorrectly been treated as an MTD No Show, it is therefore important to investigate the position quickly rather than ignoring correspondence.

MTD Will Affect More Taxpayers in Future

The MTD No Show issue currently relates mainly to the first mandatory group, but the scope of MTD for Income Tax will expand substantially over the next two years.

The current timetable is:

Qualifying income	Mandatory MTD start
More than £50,000 based on 2024/25 qualifying income	6 April 2026
More than £30,000 based on 2025/26 qualifying income	6 April 2027
More than £20,000 based on 2026/27 qualifying income	6 April 2028

HMRC has confirmed the extension to taxpayers with qualifying income above £20,000 from April 2028.

This means the number of people potentially affected will continue to increase. Landlords and sole traders approaching these thresholds should prepare in advance rather than risk becoming a future MTD No Show.

What Should Taxpayers Do Now?

If you think you could be an MTD No Show, start by checking your 2024/25 Self Assessment return and calculating your total gross qualifying income from self-employment and property.

If you were required to enter MTD from April 2026, check whether registration has already taken place. If not, consider completing the process before HMRC automatically signs you up.

You should also make sure you have compatible software, bring your digital records up to date and check that HMRC has accurate information about your active businesses and property income.

If you have an accountant or tax adviser, speak to them as soon as possible. An adviser can help determine whether you are genuinely within the MTD rules, deal with the registration process and ensure your bookkeeping system is ready for future quarterly updates.

Final Thoughts

The MTD No Show announcement marks an important shift in HMRC’s approach to Making Tax Digital. Rather than waiting indefinitely for each MTD No Show to register voluntarily, HMRC intends to begin automatically signing up taxpayers it believes should have been within MTD since April 2026.

For an MTD No Show, automatic registration does not remove the responsibility to comply. Digital records still need to be maintained, compatible software needs to be used and quarterly information still needs to reach HMRC. The first-year relaxation on quarterly late-submission penalty points provides some breathing space, but it does not remove the underlying MTD obligations.

The MTD No Show process shows that HMRC is taking a more active approach to Making Tax Digital compliance. Taxpayers who should have joined MTD from April 2026 should not assume that failing to register will keep them outside the system, as HMRC intends to identify and sign up eligible taxpayers.

For any potential MTD No Show, now is the time to check whether the rules apply, make sure HMRC holds the correct information and ensure suitable MTD-compatible software is in place. Keeping digital records up to date will also make future quarterly reporting easier to manage.

Taking action early could help an MTD No Show avoid unnecessary complications and last-minute pressure. Sole traders and landlords who are unsure about their position should seek professional advice and make sure they understand their MTD responsibilities before HMRC takes action.

The best approach for any potential MTD No Show is to check the position now. Establish whether MTD applies, confirm that HMRC holds the correct information and put appropriate digital bookkeeping arrangements in place. Taking action before HMRC intervenes can make the transition considerably smoother and reduce the risk of problems later.

Don’t wait for HMRC to act. If you could be an MTD No Show, check your position now and make sure you are ready for your MTD obligations.

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