If HMRC has signed you up for MTD: what the letter means and what to do next

Colin is fictional, but his October morning will be familiar to a good number of landlords. He lets out two houses, files a Self Assessment return every January, and had a vague idea that Making Tax Digital (MTD) for Income Tax was coming in stages. He assumed his turn was still a year or two away. Then a message from HMRC told him he had been signed up, partway through the tax year, with a quarterly deadline already behind him. This guide walks through what that message means and what GOV.UK says to do next, one step at a time, so that someone in Colin’s position can see the whole path before starting on it.

What the letter means and why HMRC sent it

HMRC has begun signing people up for MTD itself, and GOV.UK explains it like this. If you need to use Making Tax Digital for Income Tax for the 2026 to 2027 tax year and have not signed up yet, HMRC will sign you up. This is because HMRC’s records show that your qualifying income was over £50,000 in the 2024 to 2025 tax year, which is the test for the first group of people who need to use MTD. HMRC says this will happen in stages over the coming months, and that it will contact you after you have been signed up. GOV.UK does not say how long those stages will last.

Because you had not signed up yourself or through an agent, HMRC has signed you up on your behalf and contacted you to confirm it. You may receive the confirmation letter in your HMRC online services or by post, depending on your circumstances. If you have heard about the sign-up from someone else and want to confirm where you stand, GOV.UK describes a simple check. If you are not sure whether you have been signed up, you can check in HMRC online services. Once you are signed in, a message appears on screen confirming that you are signed up, and if you do not see a message, you are not signed up yet.

It helps to know what the letter does not change, too. If you have not submitted your 2025 to 2026 tax return, you will still need to submit it by 31 January 2027. MTD starts with the 2026 to 2027 tax year, so the return for the year before it still needs to be sent.

The first things to check

The most useful thing to understand early is where HMRC’s information came from, because it explains why the next steps ask you to check it. When HMRC signs you up, it uses the information it already holds about you, and this may not include any changes to your circumstances since you last submitted a tax return. If you have started letting a new property, sold one, or stopped trading since your last return, HMRC’s picture of you may be behind. You will need to update your information in the service or contact HMRC, depending on the changes you need to make, before you start using Making Tax Digital for Income Tax.

Most of that checking happens in the second of GOV.UK’s steps. GOV.UK says you must follow its steps to start using Making Tax Digital for Income Tax, and that an agent can follow them on your behalf. They are set out below in the order GOV.UK gives them.

Step 1: Access HMRC online services

Before you can use Making Tax Digital for Income Tax, you need to access HMRC online services and select ‘Making Tax Digital for Income Tax’. You sign in with the details you use for Self Assessment, and if you have never used HMRC online services, you need to set up an account first. GOV.UK’s page on signing in to HMRC online services is where to start.

Step 2: Check and confirm the records HMRC has are correct

After you sign in, you are asked to check the records HMRC holds about your self-employment or property income. These are based on your 2024 to 2025 tax return, and on your 2025 to 2026 tax return if you submitted it before HMRC signed you up. If you have an agent, you should check and discuss these details with them. GOV.UK says you will need to:

• confirm your self-employment and property income details, including any UK and overseas properties (all of your UK properties are treated as one UK property business, and all your foreign properties as one foreign property business)
• add any new self-employment or property income, in the UK or overseas, since you submitted your last Self Assessment tax return, and follow the guidance on creating digital records and sending quarterly updates for those new income sources
• tell HMRC if any income sources have ceased since you submitted your last Self Assessment tax return

If you submitted your last return after HMRC signed you up, you will still need to update your details, because HMRC signed you up based on the information it held at that time. For Colin, this is the moment to make sure both of his houses are there, and that nothing he has stopped doing is still listed as active.

Two situations are handled differently, depending on when your income stopped. If all your self-employment or property income ceased before 6 April 2026: If you have had a letter saying HMRC has signed you up, you need to update your information in your HMRC online account. You will not need to use Making Tax Digital for Income Tax, but you still need to submit your tax return for the 2025 to 2026 tax year.

If all your self-employment or property income ceased on or after 6 April 2026, the position is different. You will still need to use Making Tax Digital for Income Tax and compatible software to:

• send a quarterly update covering up to the date all your self-employment and property income sources ceased
• submit your 2026 to 2027 tax return

You will not need to use Making Tax Digital for Income Tax after this. If you need to make any other changes to your information, such as changing your business address, description or name, contact Self Assessment: general enquiries. The contact details are on GOV.UK’s Self Assessment general enquiries page.

Step 3: Get software that works with Making Tax Digital for Income Tax

For Making Tax Digital for Income Tax you must use compatible software, and you can choose it yourself or ask your agent to do this for you. You can choose an all-in-one software product to create digital records, send your quarterly updates and submit your tax return, or you can choose more than one product. This matters more than usual if you have been signed up partway through the year, because the software you pick is also what you will use to catch up.

HMRC does not provide software, but its find software tool lets you:

• check software you already use
• find new software, with both free and paid-for options available
• check the software covers all your income sources

You should also check your software works with your chosen accounting period (standard tax year, calendar update periods or neither) before you start to use it. GOV.UK’s page on choosing the right software links to HMRC’s own tool. Acrenvo does not recommend a product for you, but the software selector can narrow the options around how many properties you have and how you keep records, and the comparison table sets out prices and features side by side, so you can check them against the questions above.

Step 4: Catch up on creating digital records and quarterly updates

This is the step that tends to worry people most, so it is worth reading slowly. You need to use compatible software to:

• catch up and create digital records from the start of the tax year, having first authorised your software and checked your accounting period in it
• send your overdue quarterly update as soon as possible

You do not have to work out for yourself which deadlines have passed. GOV.UK says that in your HMRC online account you will see any overdue quarterly updates and upcoming quarterly update deadlines. For reference, these are the standard quarterly deadlines for the 2026 to 2027 tax year:

Quarterly updates are running totals of your income and expenses for the year so far, rather than small tax returns. The guide to your first quarterly update explains what an update contains, and the deadlines calendar shows the calendar update periods as well.

What GOV.UK says about penalties for the 2026 to 2027 tax year

Because a deadline may already have passed by the time the letter arrives, here is what GOV.UK’s page for people HMRC has signed up says about penalties, in its own words:

You’ll not get penalty points for missing a quarterly update deadline for the 2026 to 2027 tax year.

You still need to keep digital records and send your final quarterly update for the tax year before you can submit your tax return.

For the 2026 to 2027 tax year, penalty points will still apply for missing the tax return deadline.

The guide to MTD penalties explains how penalty points work, and GOV.UK’s own penalties page for MTD for Income Tax has the full detail.

Step 5: Use HMRC’s guide for Making Tax Digital for Income Tax

Once you have caught up, you should continue creating digital records and sending quarterly updates. HMRC’s guide to using MTD for Income Tax covers:

• further guidance on digital records and quarterly updates
• adding or ceasing income sources
• adjusting your self-employment and property income
• submitting your tax return
• what to do if your circumstances change
• help and support for the 2026 to 2027 tax year

If you think you should not have been signed up

HMRC signs people up from the information it already holds, so it is reasonable to question the decision if you think it is wrong. You should contact Self Assessment: general enquiries if HMRC has signed you up and you do not think you need to use Making Tax Digital for Income Tax. You can also find out whether you can get an exemption. For example, you can apply for an exemption if you think you are digitally excluded. That means it is not reasonable for you to use compatible software to keep digital records, or to send quarterly updates or submit your tax return.

Based on your income sources and circumstances, you could be eligible for an exemption. The guide to MTD exemptions explains who is exempt automatically and who has to apply, and the Am I in MTD? calculator can add up your qualifying income if you want to see how it compares with the threshold. If you have an agent, they should contact the agent dedicated line if you have been signed up and they disagree that you need to use the service.

Getting help from an accountant

You do not have to work through these steps alone. If you have an agent, they follow the same steps for you, but for the first step they sign in using their agent services account instead. If your accountant already prepares your Self Assessment return, it is worth telling them about the letter as soon as it arrives, so the records check in step 2 happens with both of you looking at it. The guide to letting an accountant act for you on MTD explains what an accountant sets up and what you may be asked to approve.

If you do not have an accountant and would like one, the guide to getting help with MTD explains when handing it over tends to make sense, what to ask, and how to search the professional bodies’ own directories. Acrenvo does not recommend any particular firm. The main MTD guide covers the wider rules if you would like the background first.

Questions people ask after HMRC has signed them up