I have had a letter from HMRC about Making Tax Digital: what it means and what to do
Start with the wording: a letter telling you when you need to use MTD is not the same as confirmation that HMRC has already signed you up. HMRC explains the difference.
If your letter says HMRC has signed you up, check and confirm your income sources in HMRC online services, then arrange compatible software and catch up on digital records and overdue updates. Read HMRC’s next steps.
Our already-signed-up guide takes you through that situation.
What the letter means, and who gets one
HMRC reviews Self Assessment returns each year and writes to people whose qualifying income is above the relevant threshold, confirming that they need to use MTD for Income Tax from the start of the following tax year. GOV.UK: who needs to use MTD.
From September 2026, HMRC is also signing up people who should already be using MTD for the 2026 to 2027 tax year and have not signed up, contacting them afterwards by post or through HMRC online services. GOV.UK: HMRC sign-up confirmations.
HMRC’s awareness campaign for the 30,000 to 50,000 pound income group is scheduled to run from mid October to late November 2026. HMRC’s September software developer newsletter.
That campaign description does not change the legal threshold: the April 2027 rule is more than 30,000 pounds of qualifying income in 2025 to 2026. GOV.UK: thresholds and tax years.
HMRC estimates that around 1,077,000 additional sole traders and landlords will need to use the service from April 2027. HMRC’s 5th October 2026 announcement.
Which start date should you check?
| Income tax year | Qualifying income | Start using MTD |
|---|---|---|
| 2024 to 2025 | More than £50,000 | 6th April 2026 |
| 2025 to 2026 | More than £30,000 | 6th April 2027 |
| 2026 to 2027 | More than £20,000 | 6th April 2028 |
The test is your combined self-employment and property income before expenses, not your profit or your salary. GOV.UK: qualifying income.
What to do, in order
Check the right year’s qualifying income
Add all your self-employment turnover and property income before expenses for the relevant year; for jointly owned property, count your share rather than the whole property’s income. GOV.UK: income and joint ownership.
Use our qualifying-income checker, then read the official exemption rules before relying on the result.
Decide how to keep your records
You can use software that creates digital records, or software that connects to records you keep in a spreadsheet or another accounting tool. GOV.UK: software types.
If someone helps with your tax, agree who will keep records and make submissions; HMRC allows an agent to act on your behalf. GOV.UK: using an agent.
Choose software, including a spreadsheet route if it fits
Check that your chosen product or combination of products covers all your income sources, quarterly updates and final tax return; HMRC says free products exist for people with simple tax affairs, but limits may apply. GOV.UK: choosing the right features.
Start with the route finder, our free software guide or the spreadsheet and bridging guide.
Check your sign-up status, then act
If you need MTD for 2026 to 2027 and are not already signed up, HMRC says you should sign up now, or ask your agent to do so, rather than waiting for automatic sign-up. GOV.UK: when to sign up.
If HMRC has already signed you up, confirm its records, authorise compatible software and catch up from the start of the tax year. GOV.UK: after HMRC sign-up.
If your mandatory start is April 2027, you can sign up for the current or next tax year, but volunteering for the current year means sending any missed quarterly updates for that year. GOV.UK: voluntary sign-up.
See our sign-up guide for the steps.
Put the quarterly deadlines in your plan
The quarterly update deadlines are 7th August, 7th November, 7th February and 7th May, whether you use standard or calendar update periods. GOV.UK: update deadlines.
For 2026 to 2027, the next deadline after this page’s check date is 7th November 2026, followed by 7th February 2027 and 7th May 2027. GOV.UK: update periods and deadlines.
These are summaries of income and expenses, not four extra tax returns; the final tax return and tax payment deadline is 31st January after the tax year ends. GOV.UK: what MTD involves.
Read the full deadlines guide or see our planned email reminders.
What happens if you ignore the letter?
Not receiving a letter does not remove your responsibility to check whether MTD applies and be ready when required. GOV.UK: your responsibility.
For 2026 to 2027 only, HMRC will not apply penalty points for late quarterly updates, but you must still keep digital records and send the updates before submitting your tax return. GOV.UK: first-year quarterly update treatment.
For people required to use MTD, missed quarterly update deadlines after 2026 to 2027 and missed tax return deadlines attract penalty points, with a 200 pound penalty at four points and another 200 pound penalty for each further missed submission deadline. GOV.UK: late-submission penalties.
Late-payment penalties and interest are separate, and the first-year quarterly update concession does not remove penalties for a late tax return or late payment. GOV.UK: late payments and tax returns.
Contact HMRC if you disagree that you need to use MTD, and check exemptions or changes such as ceasing all your income sources. GOV.UK: if you think you do not need the service.
Questions about an HMRC MTD letter
Does the letter mean I have already been signed up?
Not necessarily: HMRC writes to people who need to start using MTD, and separately contacts people after signing them up on their behalf. GOV.UK: threshold letters; GOV.UK: sign-up confirmations.
Read the wording and check your status in HMRC online services. GOV.UK: checking your status.
Is the threshold based on profit?
No: qualifying income is your combined self-employment and property income before expenses, also known as turnover. GOV.UK: definition.
For jointly owned property, use your share; if you only receive notice of your share after expenses, HMRC assesses that figure instead. GOV.UK: jointly owned property.
Can I keep using a spreadsheet?
Yes, a spreadsheet route can work if compatible bridging software connects to your records and the product or products cover your quarterly updates and tax return. GOV.UK: bridging software.
Will I be fined immediately if I ignore the letter?
The late-submission penalties described here relate to missed submission deadlines, not simply receiving a letter. GOV.UK: what triggers penalties.
There are no penalty points for late quarterly updates for the 2026 to 2027 tax year, but the updates are still required before the tax return can be submitted, and late tax returns and late payments can still lead to penalties. GOV.UK: first-year rules.
What if I have not had a letter, or I think the letter is wrong?
You must still check whether MTD applies even if no letter arrives. GOV.UK: no letter received.
If you disagree with HMRC that you need to use MTD, contact HMRC rather than treating this guide or an income calculation as an exemption. GOV.UK: disagreements.
Choose your next step
- Add up qualifying income for the right tax years
- Find a software or spreadsheet route
- Read the sole trader guide or the landlord guide
- See the planned quarterly reminder service
Checked on 15th October 2026 against the GOV.UK and HMRC pages linked beside each rule above. General information, not tax, accounting or financial advice.
Facts checked by MTD Magpie, last full check 15th October 2026. See the corrections log.