HMRC will start signing up landlords who it believes should already be using Making Tax Digital (MTD) for Income Tax from next week.

This will happen in stages over several months, using information from 2024–25 Self-Assessment tax returns, according to Propertymark. HMRC will contact each person after registering them, either through its online services or by post.

More than 436,000 sole traders and landlords have already submitted their first quarterly update under the new system after MTD became mandatory on 6 April for those whose qualifying income from self-employment and property was more than £50,000 in the 2024–25 tax year. More than 570,000 people have joined the service, according to HMRC.

However, with 850,000 taxpayers mandated to join, that means the figures falls far short and HMRC has now begun identifying those who haven't yet registered and transferring them to the new system proactively.

Penalty

Although HMRC won’t issue penalty points for late quarterly updates during 2026–27, taxpayers must still keep digital records and submit the required information. Landlords and sole trader agents don’t have to wait to be contacted and can still sign up. Registering directly allows you to check that HMRC has the correct details.  

Anyone who receives confirmation that HMRC has registered them should add any new income sources and tell HMRC about any that have stopped, choose compatible software that covers all their income sources and works with their accounting period and create digital records from the start of the tax year and send any overdue quarterly updates as soon as possible. All UK properties are treated as one UK property business for these purposes.

CGT

Meanwhile, the latest HMRC figures show that in the 2025 to 2026 tax year, 156,000 taxpayers filed a CGT on UK property return, reporting 173,000 disposals and £8.9 billion gains on residential property for a total CGT liability of £1.9 billion. This represents a decrease from 2024/25 when 205,000 taxpayers reported 230,000 disposals, with £12.9 billion in gains on property and a CGT liability of £2.8 billion.

HMRC’s explanation for these higher figures is that people brought forward disposals because they expected CGT increases at the October 2024 Budget.

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