Checked against HMRC guidance on 11 November 2026.
A brown envelope from HMRC with “Making Tax Digital” in it is not a fine and not a bill. It’s HMRC telling you that, based on your tax return, you need to start (or may need to start) keeping digital records and sending quarterly updates. Here’s how to read it and what to do in the next few weeks.
Why HMRC has written to you
HMRC reviews each Self Assessment return to work out your qualifying income: your gross self-employment and property income before expenses. If that’s over the threshold, HMRC writes to confirm you must use Making Tax Digital for Income Tax from the start of a future tax year.
| Return HMRC looked at | Threshold | Your start date |
|---|---|---|
| 2024 to 2025 | over £50,000 | 6 April 2026 |
| 2025 to 2026 | over £30,000 | 6 April 2027 |
| 2026 to 2027 | over £20,000 | 6 April 2028 |
If you’ve had a letter or email recently, the most likely reason is that HMRC thinks you’ll need to start on 6 April 2027.
The two kinds of letter
“You may need to use Making Tax Digital”
An early warning, usually based on an older return that showed income over or close to a threshold. It’s a heads-up, not a final decision. Last time round, HMRC started sending these about a year before the start date.
“You must use Making Tax Digital from…”
A confirmation, sent once HMRC has reviewed the return that decides your start date. For the April 2026 group, these went out in batches in February and March 2026, with people who filed close to the 31 January deadline getting theirs last. If HMRC follows the same pattern, the April 2027 group can expect confirmation letters in early 2027, after 2025 to 2026 returns are in.
What to do, step by step
- Check it’s genuine. A real letter won’t ask you to pay to sign up. Signing up for MTD is free and happens on GOV.UK or through your accountant. If an email or text asks for bank details or payment to “register for MTD”, don’t click. HMRC publishes a list of genuine HMRC contacts you can check against.
- Check the figure. Add up your gross takings and gross rents for the tax year the letter mentions. Remember it’s before expenses, it includes your share of joint rental income, and for CIS subcontractors it’s before the CIS deduction. The free checker does the sums.
- Check for exemptions. Some people are exempt, including those who are digitally excluded and, following Budget 2026, foster carers who get qualifying care relief. Some exemptions are automatic and some need an application.
- Tell your accountant, if you have one. They can sign you up as your agent. Don’t wait until March, when everyone else does.
- Choose software. It has to be on HMRC’s list of recognised products. Free options exist for simple sole traders and landlords. If you prefer spreadsheets, you’ll need bridging software.
- Sign up. You need to be registered for Self Assessment and have sent a return in the last two years. You can sign up before your start date to practise.
- Diary the dates. For an April 2027 start, your first quarterly update is due by 7 August 2027. The deadlines page has a calendar file.
If you think HMRC has got it wrong
Mistakes happen. Maybe a return was keyed in wrong, your business has stopped, or an exemption applies. HMRC’s guidance says to contact them if you disagree. Have your figures ready and note who you spoke to and when.
If all of your self-employment and property income has stopped since your last return, you won’t need to use MTD. Tell HMRC.
What if you haven’t had a letter?
Not getting a letter doesn’t get you out of it. HMRC’s guidance says that if you think you meet the threshold, you should check using its tool or speak to your tax agent, and sign up. The legal requirement comes from your income, not from the post.
Common questions
Is the letter a penalty?
No. It’s a notice about how you’ll need to report in future. Penalties only come later if you miss deadlines once you’re in MTD.
Do I still need to file my normal tax return?
Yes. If you start MTD in April 2027, you still file your 2025 to 2026 return by 31 January 2027 and your 2026 to 2027 return by 31 January 2028 the usual way.
Will I get penalty points straight away?
If you join in April 2027, Budget 2026 confirmed there won’t be penalty points for late quarterly updates during 2027 to 2028. Late tax returns and late payment can still be penalised.
I got an email, not a letter. Is that normal?
HMRC does contact people by email as well as by post. Treat any email with care: don’t click links asking for personal or bank details. If in doubt, go to GOV.UK directly rather than following a link.
Next: is your figure really over the line?
Put in your self-employment and property income and see which start date applies. It takes about 30 seconds and runs in your browser.
Sources: HMRC, Find out if and when you need to use Making Tax Digital for Income Tax; Sign up for Making Tax Digital for Income Tax; Apply for an exemption. Letter timings for 2026 are from published HMRC and trade press reports; 2027 timings are an expectation, not an HMRC commitment. General information, not tax advice.