HMRC write to taxpayers about Making Tax Digital
In the first couple of weeks of November HMRC are writing to some taxpayers who are legally required to follow the new Making Tax Digital rules from April 2026 to tell them what they must do to get ready. Do not ignore this letter, read on to find out what you should do.
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If you receive a letter this is because you have completed and filed your 2024/25 tax return and this shows total gross income from self-employment and/or rental income of over £50,000. (This is known as ‘qualifying income’.)
Unless you are exempt (see below), you need to take steps as soon as possible to prepare for Making Tax Digital (sometimes called MTD) to make sure you can meet the requirements from April 2026. We explain more about the digital requirements on our website.
If you have completed and filed your 2024/25 tax return and it shows total gross income from self-employment and/or rental income of over £50,000 but you have not received a letter from HMRC this does NOT mean that you are out of scope of the new rules. If you are not exempt, you must meet the Making Tax Digital requirements from April 2026 if you go above the £50,000 threshold, regardless of whether or not you have had a letter from HMRC confirming this. See our guidance section Your Making Tax Digital for income tax start date for more information on this area.
Essentially there are two main steps to get ready for Making Tax Digital as we explain in the getting prepared section of our website.
- choose the compatible software that you will use to keep the digital records required under this new reporting system, and
- sign up for Making Tax Digital for income tax on GOV.UK
Choosing Making Tax Digital compatible software can sound daunting. As HMRC will NOT be providing any software for digital record-keeping you will need to use third party commercial software. We have guidance on choosing software, including some tips on what to think about when considering software products in the keep digital records section of our website. HMRC have developed a tool which may help you decide which software products to investigate further.
It is possible to apply for exemption from the new Making Tax Digital regime if you are digitally excluded. Digitally excluded means it is not reasonable for you to use software to keep digital records or submit them to HMRC.’ You can apply in writing or by phone. HMRC will consider all applications and then confirm whether or not they accept your application. There are also a small number of people who are automatically exempt from Making Tax Digital for the time being. Please see our full guidance on MTD exemption for more details.
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