Tax & deadlines

HMRC has written to you about Making Tax Digital. What the letter means, and what happens if you ignore it

Updated 12 November 20269 min readLedgers Team

On this page

The short answer
Why you got the HMRC Making Tax Digital letter
What the letter is not
If you think HMRC has got it wrong
What happens if you ignore it
What to do this week
The dates that matter
What Ledgers does, and does not do

Tax & deadlines4 of 14

Quick answer

Had an HMRC Making Tax Digital letter? What it means, how to check HMRC has it right, what happens if you ignore it, and six things to do this week.

The short answer

An HMRC Making Tax Digital letter means HMRC has reviewed your Self Assessment return, found your gross income from self-employment and property over the threshold, and is "confirming that you need to start using" Making Tax Digital for Income Tax (MTD), in GOV.UK's words. It is not a bill, not a penalty and not a consultation. It is a statement that, from a date the letter gives you, your records must be digital and your income must be reported to HMRC four times a year through software.

The letter is also not the thing that puts you in scope. GOV.UK is blunt about this: "it is still your responsibility to check if and when you need to use Making Tax Digital for Income Tax". People who never received a letter are in scope if their income says so. And people who received one and filed it in a drawer are being signed up anyway: HMRC says it is enrolling them from September 2026, in stages.

This article covers what the letter means, how to check whether HMRC has got it right, what happens if you do nothing, and the six things to do this week. If you only want the answer to "am I in?", use the MTD scope checker.

Why you got the HMRC Making Tax Digital letter

Making Tax Digital for Income Tax applies to sole traders and landlords in three waves, each decided by the tax return from two years earlier. GOV.UK's eligibility page sets them out:

Over £50,000 in 2024 to 2025: you should have started from 6 April 2026.
Over £30,000 in 2025 to 2026: you need to use it from 6 April 2027.
Over £20,000 in 2026 to 2027: you need to use it from 6 April 2028.

The figure HMRC tests is "qualifying income": your total income from self-employment and property, before expenses. Not profit. A landlord with £52,000 of rent and £40,000 of mortgage interest and repairs has £52,000 of qualifying income, not £12,000. Jointly owned property counts as your share. Employment income, pensions, dividends and your share of a partnership's profit do not count at all. Our guide on whether the threshold is gross income or profit covers the edge cases.

If your letter arrived in 2026, HMRC found you over £50,000 on your 2024/25 return. If it talks about April 2027, HMRC has looked at a return showing more than £30,000 and is telling you ahead of time.

What the letter is not

It is not a scam, usually. HMRC genuinely writes these letters and says so on GOV.UK. But Making Tax Digital has become bait for fraudsters precisely because it is confusing. The genuine letter is about record keeping and signing up. Anything asking for a payment, bank details or a click to "secure your refund" is not it. If what you received was a text, an email or a phone call with a link or a demand, check it against GOV.UK's list of genuine HMRC contacts before you do anything else.

It is not a tax bill. Nothing in Making Tax Digital changes how much tax you pay. It changes how and how often you report. Your tax is still worked out once a year.

It is not optional. There is no box to tick to stay on the old system. The only ways out are the exemptions on GOV.UK, principally being digitally excluded, and even then "you must continue to report your income and gains in a Self Assessment tax return". Our guide to who is exempt from Making Tax Digital covers the grounds and how to apply.

If you think HMRC has got it wrong

Work out your own qualifying income for the year the letter refers to. Add up gross rent received and gross self-employment turnover for the tax year, using your share only for jointly owned property. Leave out salary, pensions, dividends and partnership profits. If the total is over the threshold, the letter is right, however small your profit was.

If the total is genuinely under the threshold, look at the return HMRC read. The most common reasons are gross rent recorded incorrectly, a joint property reported at 100% rather than your share, or a one-off receipt that was not rental income. In those cases the fix is to correct the return, and your accountant should handle the conversation with HMRC. Do not simply ignore the letter on the strength of your own calculation.

What happens if you ignore it

Three things, in order.

HMRC signs you up anyway. GOV.UK's sign-up page, updated 13 October 2026, says that "from September 2026, HMRC will start to sign up anyone who needs to use Making Tax Digital for Income Tax for the 2026 to 2027 tax year and has not signed themselves up". It adds that "when HMRC signs you up, we use only the information we already hold about you". Being signed up by HMRC does not give you any software or any records. It gives you the same obligations with less time.

Your tax return is blocked until the updates are sent. GOV.UK's guidance on quarterly updates says you "will need to send your quarterly updates before you are able to submit your tax return using software". A year of ignored updates becomes a problem in January 2028, when the 2026/27 return is due and cannot go in.

The penalty points start sooner than people think. For 2026/27 there are no penalties for missing a quarterly update deadline, and HMRC's August press release confirmed no penalty points would be issued for late updates in that year. The tax return is different: a late return earns a penalty point from the start. From 2027/28, each missed quarterly update earns a point too. The threshold is 4 points and reaching it means a £200 penalty. Points expire 24 months after the missed deadline if you stay below the threshold. The MTD penalty calculator shows how a year of late quarters adds up. Separately, GOV.UK notes that the current late-filing penalties still apply to your 2025/26 tax return, due 31 January 2027.

What to do this week

Confirm the year and the threshold the letter refers to, and check your own qualifying income against it using the figures from that return. Gross, not profit; your share of joint property.
Decide who will send the updates. You can submit through recognised software yourself, or your accountant can. GOV.UK says that if you use an agent, they can sign you up, and that an agent who handles your record keeping can keep the digital records for you. Our guide on accountant or DIY for Making Tax Digital weighs the two.
Sign up, or confirm your agent has. You need to be registered for Self Assessment and to have submitted a tax return in the last two years. If you started receiving property income or trading within the last two tax years, you give that date too. Sole traders also give the business name, address and nature of trade. Our step-by-step on registering for MTD for Income Tax covers the screens.
Get your records digital from 6 April of your start year. GOV.UK says "you or your agent will need to create and store digital records of your self-employment and property income and expenses". A bank feed into software that categorises each transaction is the least painful way. Our guide on moving from spreadsheets to MTD software covers what "digital" actually requires.
Send any updates you have already missed. Each update is cumulative, from 6 April to the end of the latest period, so you build the year's records once rather than reconstructing each quarter. Your software may still submit each missed period separately; it or your accountant will tell you.
Put the four dates in your diary. 7 August, 7 November, 7 February and 7 May, every year, plus 31 January for the return.

The dates that matter

Date	What	Who
31 January 2027	2025/26 Self Assessment return and payment under the old rules; this return also decides the April 2027 group	everyone
7 February 2027	Third quarterly update, 6 April 2026 to 5 January 2027	April 2026 group
6 April 2027	Start of digital records and quarterly updates for qualifying income over £30,000 in 2025/26	April 2027 group
7 May 2027	Fourth quarterly update for 2026/27	April 2026 group
7 August 2027	First quarterly update for 2027/28	both groups
31 January 2028	2026/27 tax return and payment, submitted through software	April 2026 group

Budget 2026 added one easement for the April 2027 group. HMRC "will not apply late submission penalty points to quarterly updates for the 2027-28 tax year" for taxpayers required to join in April 2027. The updates must still be sent before the return. If you are in that group, our post on rent over £30,000 and your January return goes through what to do between now and April.

What Ledgers does, and does not do

Ledgers connects to your bank, categorises each transaction as it arrives and keeps the digital records HMRC requires, including the year-to-date totals by category that an update is made of. For landlords it keeps rent and costs per property, with mortgage interest separated. Plans are on the pricing page and you can start for free.

Ledgers is not yet on HMRC's recognised list for Making Tax Digital for Income Tax, so it does not send quarterly updates or submit your tax return. Those go from recognised software, often your accountant's, using the records you keep here. Our guide to the best MTD software for sole traders covers what was on HMRC's list in October and what it costs, and our MTD for Income Tax guide has everything else in one place.

Guidance only, not tax advice. Sources: GOV.UK Check if you need to use Making Tax Digital for Income Tax (updated 26 March 2026); Sign up for Making Tax Digital for Income Tax (13 October 2026); Work out your qualifying income (11 September 2026); Penalties for Making Tax Digital for Income Tax (30 March 2026); Use Making Tax Digital for Income Tax (16 October 2026); HMRC press release of 12 August 2026; Budget 2026 overview of tax legislation and rates, paragraph 2.36; Genuine HMRC contact and recognising phishing. All as at 12 November 2026.

Frequently asked questions

Is the Making Tax Digital letter genuine?

HMRC does write to people it has identified as in scope, and it says so on GOV.UK. The genuine letter is about keeping digital records and signing up. Anything that asks for a payment or offers a refund link is not it. If the message arrived by text or email with a link, check it against GOV.UK's list of genuine HMRC contacts before doing anything.

I have not had a letter. Does that mean I am not in scope?

No. GOV.UK says that even though HMRC writes to people, it is still your responsibility to check if and when you need to use Making Tax Digital for Income Tax. The test is your gross self-employment and property income on your tax return, not whether a letter arrived.

What happens if I ignore the letter?

From September 2026 HMRC has been signing up people who need to use the service for 2026/27 and have not signed themselves up, in stages. You then owe the same quarterly updates, and you cannot submit your tax return until they are sent. There are no penalty points for late updates in 2026/27. A late tax return earns a point from the start, and from 2027/28 so does every late update; four points means a £200 penalty.

Can my accountant deal with it?

Yes. GOV.UK says that if you use an agent, they can sign you up instead of you, and that an agent who deals with your record keeping can keep the digital records on your behalf. The records still have to exist and the updates still have to be sent.

My rent is under £50,000 but my shop income takes me over. Am I in?

Yes. Qualifying income is your total gross income from self-employment and property added together, before expenses. £35,000 of rent plus £20,000 of trading income is £55,000, over the £50,000 line that applied from April 2026.

The letter says April 2027. Why am I being told now?

If your qualifying income was over £30,000 in 2025 to 2026, you must use Making Tax Digital from 6 April 2027. HMRC checks the return you file by 31 January 2027 and writes to people it finds over the line, so letters for the April 2027 group arrive in the months before you start.

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