Got a letter from HMRC about Making Tax Digital? What it means and what to do

HMRC sends two kinds of letter about Making Tax Digital for Income Tax. The first tells you that you need to use it. The second, new since September 2026, tells you that HMRC has signed you up itself, because you should have joined and have not.

Both mean the same thing in practice: from now on, your property income is reported through compatible software, every quarter, and your tax return goes the same way. This guide covers what each letter means, how to check it is real, and what to do this week.

Letter 1: you need to use Making Tax Digital

GOV.UK: “If your income is above the relevant threshold HMRC will write to you.” Landlords and sole traders whose qualifying income was over £50,000 in the 2024 to 2025 tax year “should've received a letter confirming you need to use Making Tax Digital for Income Tax” from 6 April 2026.

Not getting one does not excuse you: “If you did not receive a letter, it is still your responsibility to check if and when you need to use Making Tax Digital.” The April 2027 group, over £30,000 in 2025 to 2026, is being urged by HMRC to act now.

Whichever letter you have, the next step is software. LetCompliance is on HMRC’s list for UK property income, with quarterly updates and the tax return ready now. It is free for one property, or from £7.99 a month with the rest of the let, and catching up the year so far starts with a bank statement and your receipts. Get started

Letter 2: HMRC has signed you up

GOV.UK: “From September 2026, HMRC will start to sign up anyone who needs to use Making Tax Digital for Income Tax” and has not done it. It uses “only the information we already hold about you”, the sign-ups happen “in stages over the coming months”, and “We'll contact you after you've been signed up.”

The confirmation can arrive “in your HMRC online services or by post”. To check, sign in to your HMRC account: “a message will appear on screen confirming you are already signed up.”

What HMRC asks you to do

GOV.UK’s page for people HMRC has signed up lists five steps. In plain terms:

1. 1Sign in to your HMRC online account and confirm you are signed up.
2. 2Check your records are ready to become digital records.
3. 3Get compatible software and authorise it to connect to HMRC.
4. 4Catch up: “send your overdue quarterly update as soon as possible”. The first update for 2026 to 2027 was due by 7 August 2026, and the next is due by 7 November 2026. Each update covers the year from 6 April, so one update can bring you up to date.
5. 5Use HMRC’s guide to Making Tax Digital for the rest of the year.

Is the letter genuine?

HMRC publishes how to check its contact:

• QR codes: its Making Tax Digital letter can carry a QR code that “takes you to our guidance on Making Tax Digital for Income Tax”, and HMRC says a QR code in its letters will never take you to a page where you enter personal information.
• Research calls and letters: HMRC lists Verian (27 July to 30 October 2026) and NatCen or Walnut (17 August to 31 October 2026) as genuine research contacts.
• Emails: HMRC’s list of genuine Making Tax Digital emails covers emails to tax agents. Treat an email to you as a landlord with care, and sign in to your HMRC account directly rather than through a link.
• Report suspicious texts to 60599 and emails to phishing@hmrc.gov.uk.

The safest check is always the same: ignore the link, sign in to your HMRC account yourself, and look for the message there.

If you think you should not be in it

• Your property income stopped before 6 April 2026: GOV.UK says you will not need to use Making Tax Digital, but you still send your 2025 to 2026 tax return.
• You think HMRC has it wrong: GOV.UK says to contact Self Assessment general enquiries if you have been signed up and do not think you need to be.
• You are digitally excluded: you can apply for an exemption by phone or letter.

Penalties: the first year is lenient, the tax return is not

“There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year.” But you still need to send the quarterly updates before you can send your tax return, and “Penalty points will still apply for late tax returns for this tax year.” The 2026 to 2027 tax return is due by 31 January 2028.

From 2027 to 2028, every missed quarterly update earns a point, and at 4 points there is a £200 penalty for each further miss. A letter now is the cheapest moment to start.