If you’re a sole trader or landlord, you may have received a letter from HMRC about Making Tax Digital for Income Tax. You might already know it applies to you, or the letter may have come as a surprise. Either way, it’s worth checking what HMRC is asking you to do, particularly if it says you have been signed up automatically.
Who needs to use Making Tax Digital?
Making Tax Digital for Income Tax became mandatory on 6 April 2026 for sole traders and landlords whose combined income from self-employment and property was over £50,000 in the 2024/25 tax year, unless they are exempt. This is income before expenses, rather than profit.
Under the new system, you need to keep digital records using compatible software, send HMRC quarterly summaries of your income and expenses, and submit a tax return after the end of the tax year. The quarterly updates are not four separate tax returns.
Has HMRC signed you up automatically?
From September 2026, HMRC has begun signing up people it believes need to use Making Tax Digital but have not yet signed up themselves. It is doing this in stages and will contact people after signing them up.
If you’ve received a letter saying HMRC has signed you up, there are still steps to take. HMRC has used the information it already holds, which may not reflect a change in your circumstances or income sources. You should check your details, make sure you have suitable software and review any quarterly updates that are due. If you think you should be exempt or no longer need to use the service, check this with HMRC rather than assuming the letter is incorrect.
What if you’ve missed the first update?
The first quarterly update was due on 7 August 2026. If you were required to use Making Tax Digital from April and missed that deadline, you still need to create digital records from the start of the tax year and send the overdue update using compatible software.
HMRC will not issue penalty points for late quarterly updates during the 2026/27 tax year. That does not remove the requirement to submit them. Penalties can still apply if you miss the deadline for your annual tax return or pay your tax late.
What should you do now?
If you’ve received a letter, read it carefully and check your Making Tax Digital account. Confirm that HMRC has the right income sources, look at any overdue or upcoming updates, and speak to your accountant about the software and records you’ll need. If you haven’t received a letter but think your income puts you over the threshold, you should still check whether the rules apply to you.
If you’re unsure what your HMRC letter means or need help catching up, get in touch with SMH Group on 0330 1070 873 or email info@smh.group. We can help you understand what applies to you and what needs to happen next.
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