HMRC Begins Issuing MTD for Income Tax Letters – What You Need to Know

HMRC has now started writing to self-employed individuals and landlords who will be required to join Making Tax Digital (MTD) for Income Tax Self Assessment from April 2026. These are the first “mandation” letters confirming that the new digital reporting rules are approaching.

Who is receiving these letters?

The first batch, issued in November 2025, is being sent to taxpayers whose gross self-employment and/or property income exceeded £50,000 on their 2024–25 tax return.

This group will be required to comply with MTD from 6 April 2026.  Further letters will be issued early next year to taxpayer whose 2024-25 tax returns are filed after August 2025.

What the letters say

HMRC’s correspondence confirms that affected taxpayers:

• Must report income and expenses digitally from April 2026

• Must use HMRC-approved accounting software to keep records and submit quarterly updates

However, the letters only provide general guidance. They don’t explain how the rules apply in real life, which software is most suitable for your business, or how to structure and maintain digital records correctly. That’s where tailored professional support becomes essential.

If you haven’t received a letter yet

Not receiving a letter doesn’t mean you’re outside the scope.

If your combined self-employment and property income (before expenses) for 2024–25 is above £50,000, you will have to comply from April 2026 whether HMRC has contacted you or not.

Those with turnover between £30,000 and £50,000 are expected to join the regime from April 2027, and those with turnover above £20,000 the following year.

What MTD means in practice

Under MTD for Income Tax, affected taxpayers must:

• Keep digital records of all business and/or property transactions

• Submit quarterly updates to HMRC using MTD-compatible software

• Complete a final end-of-year declaration instead of a traditional Self Assessment return

Although this may seem straightforward, it’s the setup and ongoing accuracy that matter. Incorrect classifications, incomplete digital records, or unsuitable software choices can all lead to errors and compliance issues.

Why preparing early matters

While software providers offer tools, they don’t check your figures, ensure compliance, or guide you through the rules. That’s where we come in.

We help clients:

• Set up reliable and compliant digital record-keeping processes

• Choose software that genuinely suits their business

• Avoid common mistakes when categorising income and expenses

• Keep quarterly submissions accurate and straightforward

• Stay on top of new digital reporting requirements without added stress

With early preparation and expert support, the transition becomes smooth, manageable and far less time-consuming.

Need support?

If you’re unsure whether you’ll be affected or want to ensure you’re fully prepared, our team is here to help. We can assess your circumstances, explain your obligations clearly, and manage the transition to MTD on your behalf, making the process stress-free and keeping you compliant.

Please get in touch. We’re here to guide and support you through the upcoming changes.

Written by Ffion Bainbridge