MTD News, October 2026: New ID Check, HMRC Sign-Ups and the 7 November Deadline

Three things changed for Making Tax Digital for Income Tax this autumn, and all of them matter before the next quarterly deadline on 7 November 2026. Here is what happened and what to do, in plain English.

1. Signing up now needs your passport or driving licence

On 13 October 2026 HMRC updated its sign-up guidance and removed the option to prove your identity by answering security questions. If HMRC asks for more proof when you sign up, you now use an app on your phone to provide details of your current passport or driving licence. If you can't confirm your identity that way, you need to contact HMRC.

If you still need to sign up before 7 November, allow time for this. Have your passport or driving licence and your phone ready before you start. HMRC's page is Sign up for Making Tax Digital for Income Tax.

2. HMRC has started signing people up itself

From September 2026, HMRC began signing up people who must use Making Tax Digital for Income Tax for 2026 to 2027 but haven't signed up themselves. It does this in stages, using information it already holds.

If HMRC has signed you up, you still have to do the rest yourself:

• check the income sources HMRC holds for you are right (each self-employment business and your UK property business);
• choose compatible software and connect it to HMRC;
• keep digital records, such as a spreadsheet, and send each quarterly update.

If you think HMRC has signed you up by mistake, for example because your income has dropped below the threshold or a business has stopped, tell HMRC rather than ignoring it.

3. The first numbers are in

HMRC said on 12 August 2026 that more than 436,000 sole traders and landlords had sent their first quarterly update, and more than 570,000 had signed up to the service. Craig Ogilvie, HMRC's Director of Making Tax Digital, called it "fantastic" to see so many first updates sent (HMRC announcement).

The 7 November deadline and penalties

For standard quarters, the second update covers 6 April to 5 October 2026 and is due by 7 November 2026. Updates are cumulative, so you send your year-to-date totals, not just the last three months.

HMRC won't give penalty points for late quarterly updates in the 2026 to 2027 tax year. From the 2027 to 2028 tax year, each missed quarterly deadline earns a point, and four points mean a £200 penalty. Penalty points still apply to a late tax return, and interest is charged on tax paid late. Our penalties guide has the details.

From April 2027 the qualifying income threshold also falls from £50,000 to £30,000, so many more sole traders and landlords will join next year.

What's new in flonancial

Landlords with a mortgage can now send residential finance costs, such as mortgage interest, as their own figure. When you submit a UK property update, flonancial asks you to pick that total from your spreadsheet or confirm you have none, and keeps it out of your ordinary expenses. Our free template now has a residential finance costs category that does this automatically.

If you haven't sent your second update yet, sign in, upload your spreadsheet and check the figures before 7 November.