HMRC wrote to me about Making Tax Digital: what the letter means and what to do next

By Patrick Roper ACA, ICAEW chartered accountant. Last reviewed 6 November 2026. Figures next checked by 1 December 2026.

The letter means HMRC has reviewed your last Self Assessment return, added up your gross rent and self-employed income, and found it over the threshold for the coming April. It is a notification, not a sign-up: you still have to choose software (or an agent), sign up, and be ready to send the first quarterly update by 7 August. If you think the figure is wrong, you can contact HMRC and say so. No letter does not mean you are out; HMRC says the responsibility to check stays with you.

Why you got it

HMRC's process is published: each year it reviews the Self Assessment return you submitted, checks your qualifying income (gross rent plus gross self-employed income, before expenses), and if it is over the threshold for the next tax year it writes to confirm you need to start using Making Tax Digital for Income Tax by the start of that year. For a start on 6 April 2027 the return reviewed is 2025/26 and the line is £30,000. HMRC estimated on 5 October 2026 that around 1,077,000 people join on that date.

HMRC has not published a letter schedule. FreeAgent's guide says two sets of letters go out in the last months of 2026. Anyone who files their 2025/26 return close to the 31 January 2027 deadline cannot be written to until after that, which is February to April 2027 at the earliest.

What the letter does and does not do

• It confirms HMRC's view of your qualifying income. It does not sign you up.
• It does not change the deadlines. The first quarterly update for 2027/28 is due 7 August 2027 whether the letter arrived in November or March.
• It does not mean you have to pay anyone. Recognised software with a free tier exists, and you can sign up yourself.
• If you ignore it, HMRC has said it will sign you up itself.

Four things to do before 6 April 2027

1. Check the figure. Add up the gross rent and any self-employed turnover on your 2025/26 return. Only your share of jointly owned property counts. If you are under £30,000, tell HMRC.
2. Decide who files. Yourself through software, or an agent who files for you. Either way you need a Government Gateway login and to have submitted a return in the last two years to sign up.
3. Sort the records. A bank account the rent goes into, or agent statements that arrive at least quarterly. An annual statement from the agent will not work.
4. Sign up and authorise before the tax year starts, so the first quarter (6 April to 5 July 2027) is recorded from day one.

Do I have to sign up myself?

Yes, unless an agent does it for you. HMRC's sign-up page says "if you use an agent, they can sign you up instead". The letter is not the sign-up.

To sign up you must be registered for Self Assessment and have submitted a tax return in the last two years. HMRC lists what you need:

• The user ID and password you got when you registered for Self Assessment.
• The date you started receiving property income, or your business start date, if it was within the last two tax years.
• The tax year you will start in. For a letter about April 2027 that is 2027/28.
• If you are also a sole trader: your business name, business address and trade.

The service shows the income sources HMRC holds for you. You check each one and add any that are missing. Tell it about a source that has stopped since your last return as well.

The identity check. After you sign in, HMRC may ask for further proof of who you are. If it does, you use an app on your mobile phone to give details of your current passport or driving licence. The option to prove your identity by answering questions was removed on 13 October 2026. If you cannot confirm your identity, HMRC says to contact Self Assessment general enquiries.

If HMRC signs you up. From September 2026 HMRC began signing up people who had to join for 2026/27 and had not done it themselves. Its sign-up page does not yet give a date for people who start in April 2027. When HMRC signs someone up it uses only the information it already holds, which may leave out changes since your last return. Signing up yourself, or through an agent, lets you put the details right at the start.

If an agent signs you up. The agent needs your permission and your authorisation, then signs you up with your full name, date of birth and National Insurance number. HMRC is clear that authorising an agent does not sign you up: the agent still has to sign up each client through the online service. With us, the authorisation is a link from our HMRC agent account that you accept with your Government Gateway sign-in. We do the sign-up after that.

If you are on CIS

The letter means the same for a construction subcontractor: your gross self-employed income on the 2025/26 return was over £30,000. Gross is your pay before the contractor's deduction and before expenses. GOV.UK's CIS guidance says the return records "your total pay before deductions were taken" as income, and that is the figure HMRC tests.

Your refund still comes once a year, from the tax return. Quarterly updates are, in HMRC's words, "summaries, not tax returns". Each one gives you an estimate of your tax bill; the bill itself, and any refund, comes from the return. The deductions are set against your tax there, as now, and HMRC adds the CIS deductions it holds to the return for you to check. One step is new: HMRC says a refund cannot be claimed inside a return sent through Making Tax Digital software. You request it in your HMRC online account once the return is in, or your agent requests it through its agent services account. Making Tax Digital and CIS refunds sets out what changes and what does not.

If you would rather hand it over

We do the four quarterly updates and the year-end return for £399 a year for up to three properties in your own name, or £699 for joint owners, four or more, or rent plus a self-employed trade. Nothing is paid until you approve your first quarterly update. We send a link from our HMRC agent account and you accept it with your Government Gateway sign-in. If the check in step one shows you are under the line, you are told so and there is nothing to pay.