Had a letter from HMRC about Making Tax Digital?
You are not alone. HMRC is now signing up sole traders and landlords to Making Tax Digital for Income Tax automatically. Here is what the letter means, the deadlines that now apply, and how to get compliant without the stress.
What is happening
Making Tax Digital for Income Tax became mandatory on 6 April 2026 for sole traders and landlords whose qualifying income on their 2024/25 tax return was over £50,000 - around 864,000 people. By late summer 2026, HMRC reported that more than 290,000 of them had still not signed up, so from September 2026 HMRC began signing people up automatically, in stages, and writing to tell them. If one of those letters has landed on your doormat, HMRC believes you are in scope and the rules now apply to you.
What the letter means for you
Instead of one Self Assessment return a year, you now need to do three things:
- Keep digital records of your business or property income and expenses in HMRC-compatible software.
- Send quarterly updates to HMRC: by 7 August, 7 November, 7 February and 7 May each year. Each update covers the tax year so far.
- Complete a final declaration after the year ends, by 31 January, which replaces the old Self Assessment return and finalises your tax bill.
The thresholds keep coming down: income over £30,000 joins from April 2027 and over £20,000 from April 2028. So even if this year's letter caught you by surprise, this is the direction for every sole trader and landlord.
What happens if you do nothing
The obligation applies whether or not you reply to the letter. Late submissions earn penalty points, and at four points HMRC charges a £200 penalty. HMRC has said it will not issue penalty points for late quarterly updates during the 2026-27 tax year while people get used to the system - but the requirement still stands, late payment of tax is penalised as normal, and catching up on a year of digital records in January is exactly the kind of stress this site exists to prevent.
The easy way to deal with it
B Keepers is the dedicated Making Tax Digital service of AIM GB LTD, a UK team of accountants and bookkeepers with over 25 years of experience. We set you up on FreeAgent (HMRC-recognised MTD software, included free with Mettle, NatWest and RBS business accounts), keep your records straight, submit your quarterly updates on time and support your final declaration - all for one fixed monthly fee. From £35 a month for landlords, £45 for sole traders, £65 combined, excluding VAT.
Prefer to talk it through? Call 0333 121 1940, message us on WhatsApp or email hello@bkeepers.co.uk.
Your questions, answered
Why has HMRC written to me about Making Tax Digital?
Because your 2024/25 tax return showed qualifying income over £50,000, which put you in scope from 6 April 2026. From September 2026 HMRC began automatically signing up people in scope who had not registered themselves, and the letter tells you it has happened or is about to.
What counts as qualifying income?
Your combined gross income from self-employment and property, before expenses. If the two together were over the threshold, you are in scope, even if each alone is under it.
I have been signed up automatically. What do I do now?
Get MTD-compatible software, start keeping digital records, and make the quarterly deadlines. Or hand it to us: we set everything up in FreeAgent and handle the submissions for a fixed monthly fee, with an instant online quote so you know the cost before you commit.
When are the quarterly updates due?
7 August, 7 November, 7 February and 7 May. Each covers the tax year to date, and the final declaration follows by 31 January.
Do I still send a Self Assessment tax return?
No - once you are in MTD for Income Tax, the quarterly updates plus the final declaration replace the annual return for that income. The final declaration is where allowances, reliefs and other income are confirmed.
What software do I need?
HMRC-recognised MTD software. We use FreeAgent, which is fully compatible and included at no extra cost with Mettle, NatWest and RBS business bank accounts; if you bank elsewhere you can access it through us at a reduced rate. Our guides page has short videos on getting started.
How much does it cost to have it all handled?
Fixed monthly fees, no surprises: from £35 a month for landlords, £45 for sole traders, £65 combined (ex VAT), with optional add-ons like payroll, VAT and CIS priced clearly in the quote tool. You see your exact price live as you answer.
Information on this page reflects HMRC announcements as at September 2026. Read more about the scheme on our Making Tax Digital page.