Making Tax Digital: Letters on their way

More than 200,000 sole traders and property owners required to move to the new digital tax reporting system from April 2026 will receive a letter from HMRC later this month.

Making Tax Digital (MTD) will apply to self-employed individuals and landlords if their ‘qualifying income’ – combined income from trading and property, measured before expenses – is more than £50,000.

Individuals who had filed their tax return for the year ended 5 April 2025 by 31 August 2025 should receive a MTD mandation letter if their 2024/25 tax return reported qualifying income of more than £50,000.

The letters advise that MTD will apply to the recipient from April 2026, and also contain guidance on how to prepare.

Taxpayers with qualifying income over £50,000, but who file their 2024/25 tax return on or after 1 September 2025 should be sent the same letter in February or March 2026, once the 2024/25 tax return filing deadline has passed.

MTD awareness letters will also be sent during November 2025, according to the trade body The Association of Taxation Technicians.

It says these will go to taxpayers who don’t have agents, and who hadn’t filed their 2024/25 tax return by 31 August 2025, but whose 2023/24 return reported qualifying income close to or above £50,000.

These letters will advise that recipients will need to comply with MTD from April 2026 if their qualifying income in the 2024/25 tax year was more than £50,000, and contain guidance on how to prepare.

They should then receive the mandation letter referred to above after 31 January 2026 if they need to comply with MTD from April 2026.

Receipt of either letter does not mean the taxpayer has been registered for MTD – registration remains the responsibility of the taxpayer or, by agreement, their agent.

• To discuss any issues raised by this article or any tax matters, please contact me on 01772 430000