HMRC is signing people up for MTD: what the letter means

From September 2026, HMRC will begin signing up sole traders and landlords who should be using Making Tax Digital (MTD) for Income Tax this year but have not signed up themselves. HMRC announced this on 12 August 2026 (opens in a new tab): the sign-ups happen in stages over the coming months, a letter tells you it is happening, and HMRC says new guidance about the letters is due in late August.

Why is HMRC writing to you about MTD?

Because its records say MTD for Income Tax applies to you for 2026-27 and you have not signed up. MTD became a legal requirement in April 2026 for people whose qualifying income is more than £50,000. That is your gross income (before expenses) from self-employment and property added together, taken from the last tax return you filed, so a business with £70,000 of takings and £30,000 of profit is over the line. By 12 August 2026, more than 570,000 people had signed up and over 436,000 had filed their first quarterly update (HMRC’s own figures (opens in a new tab)); the letters go to those who haven’t signed up yet. They are addressed to you as the taxpayer, so if an accountant looks after your tax, show them the letter.

Is the letter a fine?

No. HMRC is not issuing penalty points for late quarterly updates in the 2026-27 tax year (HMRC’s penalty guidance (opens in a new tab) confirms it), so there is no fine and no penalty point behind the letter, however late in the year it arrives. File the year so far once you’re set up and you’re square. From the 2027-28 tax year a late quarterly update earns a penalty point, and four points bring a £200 penalty, so this year is the right time to get the routine working.

What does being signed up actually change?

Being signed up means HMRC creates your quarterly obligations: the four updates a year it now expects from you (a quarterly update is a summary of your business income and expenses for the year so far). It does not give you software, and it does not create or move any records. To file, you still need two things the letter does not provide: digital records of your income and expenses, and MTD-recognised software to send updates through. What is a quarterly update? covers the job itself.

Should you sign up yourself or wait for HMRC?

HMRC’s own advice in the announcement is to sign up yourself: you make sure your details are correct from the start, and you choose software in your own time instead of starting from a letter. Signing up for MTD with HMRC walks through the sign-up step by step. If you’re not sure MTD applies to you at all, the two-minute checker settles that first: HMRC picks the letter list from filed tax returns, and the checker uses the same income rules.

What should you do when the letter arrives?

• Confirm MTD applies to you: the two-minute checker takes your income figures and gives your start date.
• Follow the letter’s instructions. HMRC says new guidance about the sign-up letters is due in late August 2026; we track it and update this guide when anything changes.
• Pick software: genuinely free options exist, so paying is a choice, never the rule.
• File the year so far. Updates are cumulative (each one covers the whole tax year to date), so one filing catches you up on everything since 6 April. Missed the 7 August deadline? covers exactly this.
• If an accountant does your tax, show them the letter and agree who files what: MTD if you have an accountant covers how the split usually works.

One filing date to plan around in September

HMRC has scheduled downtime for the MTD for Income Tax service from 5pm on Friday 11 September until 1pm on Tuesday 15 September 2026 (listed on HMRC’s service availability page (opens in a new tab)). If you’re catching up that week, file before Friday afternoon or after Tuesday lunchtime. Either side of it, the 2026-27 position is unchanged: no penalty points for late quarterly updates.

The quarterly deadlines repeat every year: 7 August, 7 November, 7 February and 7 May. Add them to your calendar and switch on free email reminders: no account, no software sign-up.