Why has HMRC written to me about MTD for Income Tax?

If you’ve received a letter from HMRC about Making Tax Digital (MTD) for Income Tax, the first step is not to panic but it is important to understand why you’ve been contacted and what action is required.

MTD is being introduced in stages for sole traders, freelancers and landlords. It applies from April 2026 to those with qualifying income above £50,000, from April 2027 for those above £30,000, and from April 2028 for those above £20,000.

FreeAgent recommends three key steps for those preparing for MTD:

• Register with HMRC as soon as possible if you are required to use MTD.

• Use HMRC-recognised compatible software to keep digital records and submit quarterly updates.

• Keep track of deadlines, particularly during the transition when some taxpayers will still need to submit a final Self Assessment return.

Importantly, quarterly updates are not quarterly tax bills. Tax will still generally be paid once or twice a year, while the quarterly submissions provide HMRC with updates on income and expenses.

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