The letter from HMRC about Making Tax Digital, explained
If a letter headed Making Tax Digital for Income Tax has landed on your mat, you are not in trouble and nothing is overdue. HMRC is telling you about a change to how you report, and the date it reaches you depends on how much you earned.
What the letter is about
Making Tax Digital for Income Tax, MTD for short, changes two things for sole traders and landlords. You keep your records in software rather than on paper or in a spreadsheet you type up once a year, and you send HMRC a short update from those records every three months. The annual Self Assessment return does not disappear. It becomes a final declaration at the end of the year, confirming the figures the four updates already sent.
The letter does not mean you have done anything wrong. HMRC is writing to everyone it thinks will be caught by the change, based on the income on your last return.
Who it applies to, and when
The start date depends on your qualifying income: your turnover from self-employment plus your gross rental income, before any expenses, added together.
- Over £50,000 on your 2024/25 return: MTD started for you on 6 April 2026.
- Over £30,000 on your 2025/26 return: MTD starts on 6 April 2027.
- Over £20,000: MTD starts on 6 April 2028.
- Under £20,000: no date has been set. You carry on with the annual return.
What changes day to day
Four quarterly updates a year, each a summary of income and expenses for the three months just gone, sent from your software. The quarters run from 6 April, 6 July, 6 October and 6 January, and each update is due a month and a week after the quarter ends. Then one final declaration by 31 January, as now.
The updates are not tax returns and no tax is due with them. They are there so your position builds up through the year rather than arriving as a surprise in January.
If you had the letter and your income was over £50,000
You are already in MTD for the 2026/27 year and your first quarterly update, covering 6 April to 5 July 2026, was due by 7 August 2026. If you have not sent it, the thing to do is pick recognised MTD software and send it now. HMRC is running a soft start on penalties for late updates in the first year, but a missing update is still worth putting right.
Swiftmore is Self Assessment software for the annual return. The quarterly updates for 2026/27 need MTD software, and Swiftmore’s MTD filing arrives for the April 2027 start, so this year you need something else for the updates.
If your income was between £20,000 and £50,000
Nothing changes for your 2025/26 return, due 31 January 2027. Keep your records as you do now and file as normal. The practical step is to start keeping records digitally this year, so that when your start date comes the first quarterly update is a button rather than a project. Keeping records in Swiftmore is free for as long as you like.
Figures are for the 2025/26 tax year and were checked against gov.uk on 16 October 2026. This is general information, not advice about your own position.