In September 2026, HMRC triggered the automatic enrolment of approximately 294,000 self-employed workers and landlords into Making Tax Digital for Income Tax Self Assessment (MTD ITSA) — these taxpayers exceeded the £50,000 qualifying income threshold for the 2024-25 tax year but had not yet joined the programme (Progress Accountants, 10 September 2026). This forced catch-up measure is a direct consequence of the mixed results seen at the first quarterly deadline.
Context: 50.5% of In-Scope Taxpayers Filed Their First Return
Of the estimated 864,000 taxpayers in scope for the first MTD ITSA wave (threshold > £50,000), more than 570,000 had registered for the programme — but only 436,000 actually submitted their first quarterly update before the 7 August 2026 deadline (Grunberg Accountants, 19 August 2026). That amounts to a 50.5% submission rate across all theoretically in-scope individuals.
The 294,000 now auto-enrolled are precisely those who had never signed up — not voluntarily, and not in response to HMRC communications. The launch period came with an explicit soft-landing: no penalties for missed or late submissions during the 2026-27 tax year. That safety net evidently encouraged a portion of taxpayers to adopt a wait-and-see approach. The soft-landing applied to penalties only — it never exempted anyone from registering.
Practical Impact for Businesses: Immediate, Non-Optional Obligations
For a CIO or CFO whose organisation works with UK freelance contractors, or whose directors receive rental income above £50,000, auto-enrolment creates obligations that take effect without any further grace period.
MTD-compatible software is mandatory. Auto-enrolled individuals must use HMRC-recognised software to maintain digital records and submit their quarterly updates (Progress Accountants, 10 September 2026). The most widely used solutions on the UK market — Xero, QuickBooks Online, Sage 50cloud, IRIS — have all obtained MTD certification. A spreadsheet, however sophisticated, is not sufficient.
Verify HMRC account data. Each auto-enrolled taxpayer must log into their HMRC digital account to confirm the information that underpinned their enrolment: income source, period covered, contact details. If the enrolment is based on income from a closed tax year or a source that no longer exists, corrections must be made promptly — otherwise active quarterly obligations are created for inactive activities.
The points-based penalty regime is approaching. The first-year soft-landing (2026-27 tax year) does not roll over. From 2027-28 onwards, every missed or late quarterly submission generates a penalty point. Once the threshold is reached, a financial penalty applies — modelled on driving licence penalty points. For the 294,000 newly auto-enrolled taxpayers, the clock starts from the moment their enrolment is confirmed.
What to Watch: Two Further Waves in 2027 and 2028
April 2027: the threshold drops to £30,000. The second MTD ITSA wave applies to self-employed workers and landlords with qualifying income between £30,000 and £50,000. These taxpayers must join — voluntarily or through auto-enrolment — from April 2027 (Progress Accountants, 10 September 2026).
April 2028: the threshold drops to £20,000. The third and final wave extends the obligation to all self-employed individuals and landlords with qualifying income above £20,000. By this date, the vast majority of UK self-employed profiles will be within MTD scope.
For a CIO or Finance Director working regularly with UK freelance contractors, the next two waves will very likely affect a significant portion of their supplier panel. The phased MTD rollout is no longer a hypothetical — it follows a confirmed, non-revisable timetable.
For a full picture of the programme since its launch, read our analysis HMRC auto-enrolls unregistered UK self-employed in MTD — what changes from September 2026. For software procurement decisions in the UK market, see our UK ERP landscape — Sage UK, Access Group, Making Tax Digital and post-Brexit considerations. To stay on top of other HMRC regulatory obligations, see our article HMRC makes MFA mandatory for agent accounts in 2026.
