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Guide · Tax and MTD

Had a letter from HMRC about Making Tax Digital? What it means and what to do

HMRC is writing to sole traders and landlords about Making Tax Digital, and since September 2026 it has been signing some of them up itself. Here's how to tell which letter you've got and what to do next.

Stephen Evans, editor
Figures checked against GOV.UK and HMRC guidance
Last checked 29 Oct 2026 · Next review Feb 2027

The short answer

Tax year 2026/27

HMRC's Making Tax Digital letters usually say one of two things: that your tax return showed turnover over the limit, so you must use MTD from the next 6 April, or, since September 2026, that HMRC has signed you up itself because you should have started in April 2026. Either way, sign in to your HMRC online account by going to GOV.UK yourself, check the income sources HMRC has for you, get software that works with MTD and keep digital records. If you've stopped trading or think HMRC is wrong, contact HMRC. Signing up doesn't change how much tax you pay.

Which letter have I got?

The letterWhy you got itWhat to do
You need to use MTD from 6 AprilYour last tax return showed turnover from self-employment and property over the limit: £30,000 on a 2025/26 return means April 2027Sign up, choose software and start digital records on 6 April. Our April 2027 plan has every date.
HMRC has signed you upYour 2024/25 turnover was over £50,000, so you should have started on 6 April 2026, and you hadn't signed upFollow the steps below and catch up.
You won't need MTDYou told HMRC all your self-employment and property income had stoppedNothing for MTD. You still send your tax return for the last year you traded.

The letter may come by post or appear in your HMRC online account.

Is the letter genuine?

Check it without using anything in the letter or message itself. Go to HMRC online services on GOV.UK yourself and sign in with the details you use for self-assessment. If HMRC has signed you up, a message on screen says so.

HMRC's own checklist says contact is likely to be a scam if it rushes or threatens you, asks for bank details, tells you to move money, or offers a refund. Signing up for MTD asks for your business name, address and trade, not your bank details. Report anything suspicious through HMRC's reporting page.

HMRC has signed me up. What do I do now?

  1. Sign in to HMRC online services with your self-assessment sign-in details and choose Making Tax Digital for Income Tax. If you've never used HMRC online services, set up an account first.
  2. Check the income sources HMRC has for you. They come from your 2024/25 tax return, and your 2025/26 one if you'd sent it. Confirm the ones that are right, add any new work or rental income since, and tell HMRC about anything that has stopped. All your UK rental properties count as one property business.
  3. Get software that works with MTD and connect it to your HMRC account. Check it's set to the right update periods: standard (6 April to 5 April) for most people, or calendar quarters if your accounts run to 31 March. Compare MTD software.
  4. Catch up. Put in your income and costs from 6 April 2026 and send the overdue quarterly updates as soon as you can. The first two were due on 7 August and 7 November 2026. Your online account lists what's overdue and what's coming up.
  5. Keep going. The third update is due on 7 February 2027 and the fourth on 7 May 2027. Your 2026/27 tax return then goes through the software by 31 January 2028.

There are no penalty points for late quarterly updates in 2026/27, but the updates must be in before you can send your 2026/27 return, and a late return does get a point. Your 2025/26 return still goes in the usual way by 31 January 2027.

If you use an accountant, send them the letter. They can check your details and send the updates from their agent account.

What if I've stopped trading?

  • All your self-employment and rental income stopped before 6 April 2026: update your details in your HMRC online account. You won't need MTD, but you still send your 2025/26 tax return.
  • It stopped on or after 6 April 2026: you use MTD one last time. Send a quarterly update covering the period up to the date you stopped, then your 2026/27 tax return through the software. After that you're done with it.

If one business stopped but you have another, or you still let out a property, you're still in.

What if I think HMRC has got it wrong?

First check the figure HMRC used. The limit is on turnover before expenses, not profit, so a tradesperson who buys a lot of materials can be over it while making far less. Your share of any rent counts too.

If you're sure you're under the limit, contact Self Assessment: general enquiries. If you corrected your tax return and the new figure is under the limit, you won't need MTD for a tax year that hasn't started yet, and you can choose to leave if the year has already begun.

You can apply for an exemption if your age, health, disability or religious beliefs mean you can't reasonably use software, or you can't get internet access where you live or work. HMRC won't accept that you've always filed on paper, that you don't know accounting software, that you have few records, or that it costs time or money.

I haven't had a letter. Am I in the clear?

Not necessarily. HMRC says it's your responsibility to check whether you need MTD and to sign up, whether or not a letter arrives. If your 2025/26 turnover is over £30,000, you're in from April 2027. Our MTD checker takes four questions, and our main Making Tax Digital guide explains how it works.

Common questions

Can I ignore the letter?

No. Once you're signed up, MTD's deadlines and penalty rules apply to you whether you act or not. If you think the letter is wrong, contact HMRC rather than leaving it.

Will I be fined for the quarterly updates I've already missed?

Not for 2026/27. HMRC isn't giving penalty points for late quarterly updates in the first year. You still have to send the updates before you can send your 2026/27 tax return, and a late tax return does get a point.

Does the letter mean I owe more tax?

No. Making Tax Digital changes how you report your income, not how much tax you pay. Your bill is still due on 31 January after the tax year ends.

Do I have to pay for software?

HMRC doesn't provide software. Its list includes free and paid products, and some bridging software lets you keep using a spreadsheet.

I haven't had a letter. Does that mean I'm not in?

Not necessarily. HMRC says it's your responsibility to check, letter or not. Work out your turnover from self-employment and property, before expenses, on your last tax return.

Related toolCheck if MTD applies to you in four questionsCompareMTD software for sole traders, compared

Sources

  1. Check what to do if HMRC has signed you up for Making Tax Digital for Income Tax, GOV.UK. Checked 29 Oct 2026
  2. Find out if and when you need to use Making Tax Digital for Income Tax, GOV.UK. Checked 29 Oct 2026
  3. Work out your qualifying income for Making Tax Digital for Income Tax, GOV.UK. Checked 29 Oct 2026
  4. Sign up for Making Tax Digital for Income Tax, GOV.UK. Checked 29 Oct 2026
  5. Find out if you can get an exemption from Making Tax Digital for Income Tax, GOV.UK. Checked 29 Oct 2026
  6. Identify tax scams by phone, text, email or social media, GOV.UK. Checked 29 Oct 2026

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