A few clients have rung us this month about a letter from HMRC saying they've been signed up to Making Tax Digital. The first question is always the same: what have I done wrong?

Nothing. It isn't a penalty and it isn't a bill. Since September 2026 HMRC has been going through its own records, finding people whose 2024/25 qualifying income was over £50,000, and enrolling them into MTD for the 2026/27 tax year. If you didn't sign up yourself, HMRC has done it for you and written to tell you afterwards. The letter arrives by post or lands in your online account.

So it's worth ten minutes to check whether HMRC has the right person.

The number HMRC used

Your 2024/25 tax return. Specifically, turnover from self-employment before any expenses, plus gross rent before any expenses, added together.

Before expenses is the part that catches people. A courier who invoiced £58,000 and spent £19,000 on fuel, van and insurance made a profit of £39,000, and every instinct says that's under the line. It isn't the number HMRC looks at. The £58,000 is.

Wages through PAYE don't count towards this test. Neither do dividends, pensions or your share of a partnership.

If HMRC has got it wrong

It happens, because HMRC is working from a return filed eighteen months ago. Ring Self Assessment on 0300 200 3310 and tell them. Common reasons:

  • The qualifying income figure was actually under £50,000
  • Your return was amended after you filed it
  • HMRC has counted income that shouldn't be in the test
  • You stopped trading

That last one has its own rule. If all your self-employment and property income stopped before 6 April 2026, you won't need to use MTD, but you still have to file the 2025/26 tax return in the normal way. If you stopped after 6 April 2026, you still owe a final quarterly update.

Don't sit on it while you wait for an answer. Keep filing, keep the records, sort the record out in parallel.

If HMRC has got it right

Then you're in for 2026/27 and there are four things to do.

  1. Sign in to your HMRC account and check the list of businesses and properties is correct. Add anything new, close anything that's finished.
  2. Get MTD-compatible software. HMRC doesn't provide it, and there are free options as well as paid ones.
  3. Start keeping digital records. Not a shoebox and a Sunday night in January.
  4. Send any update you've already missed. The 7 August one has gone, 7 November is next.

If we already do your books, you don't need to do any of this. We'll have you authorised and the software connected, and we'll tell you if the letter is right.

Does the letter mean I've been fined?

No. There are no penalty points for missing a quarterly update in 2026/27 at all, so even if you've missed one you're not being charged for it. That changes on 6 April 2027, when points start counting and four of them costs £200. The tax return and payment deadlines carry their usual penalties throughout, and those never went away.

What the letter does mean is that HMRC now expects quarterly updates from you, and that expectation doesn't pause while you decide what to do about it. If you want someone to look at yours, send it over and we'll tell you where you stand. There's more on how the whole thing works on our Making Tax Digital page, including a checker for which year you're in.

Sources: HMRC, Check what to do if HMRC has signed you up for Making Tax Digital for Income Tax and Find out if and when you need to use Making Tax Digital for Income Tax. Correct as at September 2026.