Making Tax Digital for Income Tax is no longer a distant compliance change. From April 2026, many landlords and sole traders will be required to keep digital records and submit quarterly updates to HMRC using compatible software.

Until now, the process has relied on taxpayers, or their agents, taking active steps to sign up. That is expected to change from September 2026, when HMRC begins automatically setting up MTD obligations for taxpayers it believes are within scope for the 2026/27 tax year but who have not yet enrolled.

For British expatriates, non-resident landlords and internationally mobile individuals with UK income, this is a development worth addressing before an HMRC notice arrives.

What is changing?

Historically, there has been a distinction between being within scope of Making Tax Digital and being signed up for Making Tax Digital. A taxpayer could be required to comply with MTD, but still needed to complete the sign-up process before the obligations appeared on HMRC's systems.

From September 2026, HMRC is expected to begin closing that gap. Where its records indicate that an individual is mandated for MTD for Income Tax from 2026/27, HMRC may automatically set up the relevant MTD obligations, rather than waiting for the taxpayer or their agent to do so.

In practical terms, if HMRC believes your UK property or self-employment income brings you within the 2026/27 MTD rules, and you have not signed up, HMRC may sign you up automatically.

Who is within scope of MTD for Income Tax?

MTD for Income Tax is being introduced in stages, based on an individual's qualifying income. This broadly means gross income from self-employment and property before expenses.

The current timetable is:

From 6 April 2026: individuals with qualifying income over £50,000;
From 6 April 2027: individuals with qualifying income over £30,000; and
From 6 April 2028: individuals with qualifying income over £20,000. (gov.uk)

The September 2026 automatic enrolment process is understood to apply to taxpayers HMRC identifies as already mandated for 2026/27, namely those in the first group with qualifying income over £50,000.

Individuals who come within the regime from April 2027 or April 2028 will still need to ensure they are signed up at the appropriate time, either directly or through their tax agent.

Why this matters for British expats and non-resident landlords

Making Tax Digital for Income Tax is not limited to UK residents. Individuals living overseas may still be within scope if they have UK property income or UK self-employment income above the relevant threshold.

This is particularly relevant for non-resident landlords. A British expatriate with one or more UK rental properties may exceed the £50,000 threshold based on gross rental income, even where taxable profit is much lower after mortgage interest, agent fees, repairs and other expenses.

This distinction is important: the MTD threshold is based on gross qualifying income, not net profit.

Once within MTD, the compliance process changes significantly. Taxpayers must keep digital records and submit quarterly updates to HMRC through MTD-compatible software, followed by an end-of-year finalisation process. The requirement to maintain digital records and submit quarterly updates is central to the MTD regime. (gov.uk)

For individuals living outside the UK, this can create practical difficulties. UK rental statements may arrive monthly, letting agents may provide information in inconsistent formats, and the taxpayer may also have local tax obligations in their country of residence. Leaving MTD preparation until HMRC automatically enrols you can make the transition unnecessarily difficult.

What should expat landlords do now?

1. Check whether you are within scope

Review your gross UK property and self-employment income for the relevant tax year. If your qualifying income exceeds £50,000, you should assume that MTD for Income Tax applies from 6 April 2026.

For landlords, this means looking at gross rents before deducting expenses.

2. Do not wait for HMRC to act

Automatic enrolment should not be treated as a substitute for preparation. Signing up in good time allows you and your adviser to choose suitable software, review your record-keeping process and ensure the right agent authorisations are in place.

3. Move to digital records

MTD is not designed around incomplete spreadsheets, missing monthly statements or year-end reconstruction of rental accounts. The quarterly reporting cycle rewards clients who keep records consistently throughout the year.

For non-resident landlords, this may involve ensuring that letting agent statements, mortgage statements, repair invoices, service charges and other property costs are captured digitally and regularly.

4. Confirm your agent position

If you use a UK tax adviser, check that they are authorised to deal with your MTD obligations and that your software access is properly set up.

This is especially important where you are overseas and may not receive or act on HMRC correspondence as quickly as a UK-based taxpayer.

How Expat UK Tax can help

Expat UK Tax specialises in UK tax advice for expatriates, non-resident landlords and internationally mobile individuals. We help clients determine whether MTD for Income Tax applies to them, prepare for digital record-keeping, select and implement compatible software, and manage ongoing UK tax compliance from overseas.

If you have UK rental income or self-employment income and are unsure whether you fall within MTD, it is better to review the position now rather than wait for HMRC to automatically set up your obligations.

Early preparation gives you more control, fewer surprises and a smoother transition into the new reporting regime.

This article is for general information only and does not constitute personal tax advice. The MTD rules, thresholds and implementation timetable may change. You should seek advice based on your specific circumstances before taking action.

HMRC to Begin Automatically Enrolling Taxpayers into MTD: What Expat Landlords Need to Know