HMRC Signed You Up for MTD? What to Do Next

HMRC began automatically signing people up for Making Tax Digital for Income Tax in September 2026. If a letter or online message says HMRC has signed you up, do not ignore it — but do not panic either.

The sign-up is only the start. HMRC has not chosen accounting software for you, imported your transactions or sent your missed quarterly update. You now need to check the information HMRC holds, connect compatible software and bring your digital records up to date.

This guide explains what the letter means, what to do next and where you still have a choice.

Why HMRC has signed you up

Making Tax Digital for Income Tax became mandatory on 6 April 2026 for eligible sole traders and landlords whose qualifying income was over £50,000 in 2024 to 2025.

Qualifying income means gross self-employment turnover plus gross UK property income before expenses. PAYE wages, dividends and savings interest do not count towards this threshold.

HMRC originally asked affected taxpayers or their agents to sign up. From September 2026, it began enrolling those who had not acted, using the information it already held. HMRC's automatic sign-up guidance says this is happening in stages.

You may receive confirmation by post or in HMRC online services. If you are unsure whether the message is genuine, do not follow links in an unexpected email or text. Sign in through GOV.UK using the details you normally use for Self Assessment.

What to do after HMRC signs you up

1. Sign in and open the MTD service

Go to HMRC online services and select Making Tax Digital for Income Tax. Use your normal Self Assessment user ID and password.

Once inside, check whether HMRC shows:

• your self-employment business or businesses
• UK property income, if applicable
• any overdue quarterly updates
• the next quarterly deadline
• an agent authorised to act for you

Take a screenshot or save a note of what is listed before changing anything. It gives you a useful record if you need to query an error.

2. Check every income source HMRC holds

HMRC may use your 2024 to 2025 return and, if already filed before the automatic sign-up, your 2025 to 2026 return. That information may not reflect a recent change.

Check the business name, description, address and start or cessation date. Check that each relevant self-employment and property source is present and that nothing has been duplicated.

If all your self-employment and property income ceased before 6 April 2026, update the details in your HMRC account. HMRC says you will not need to use MTD for 2026 to 2027, although your 2025 to 2026 Self Assessment return is still due by 31 January 2027.

If the income ceased on or after 6 April 2026, you may still need to send an update covering the active period and submit the 2026 to 2027 tax return through compatible software. Contact HMRC if the information cannot be corrected online.

3. Choose software that fits all your income

HMRC does not provide MTD software. Automatic sign-up therefore leaves you with an important commercial decision: use an all-in-one accounting product, keep a spreadsheet connected to bridging software, or ask an accountant to manage the process.

Before buying, confirm that the product supports:

• MTD for Income Tax, not only MTD for VAT
• every self-employment and property income source you need to report
• your standard or calendar update periods
• digital record keeping and quarterly updates
• your year-end tax return workflow
• access for your accountant, if you use one

Use our MTD software chooser for a recommendation, or compare the best MTD software for sole traders. If you want an all-in-one product with bank feeds and accountant access, you can also see Xero's current free-trial offer.

4. Authorise the software correctly

Buying software does not connect it to HMRC automatically. Follow the provider's MTD setup process and sign in with the Government Gateway credentials linked to your Self Assessment account.

Check the accounting period before sending anything. Most sole traders with a 5 April year end use standard update periods. Those with a 31 March year end may use calendar update periods. You generally cannot change the update-period choice for a tax year after the first quarterly update has been sent.

5. Rebuild digital records from the start of the tax year

If you are joining partway through 2026 to 2027, HMRC requires you to catch up from the start of the tax year — normally 6 April 2026 for standard update periods or 1 April 2026 for calendar periods.

The quickest reliable route is usually:

1. Connect the correct business bank account or import statements.
2. Enter cash transactions and income paid into personal accounts.
3. Upload or retain supporting invoices and receipts.
4. Categorise income and expenses inside the software.
5. Check opening dates and remove personal transfers or duplicates.
6. Reconcile the totals against your bank statements.

Do not assume a bank feed is automatically accurate. You remain responsible for missing, duplicated or wrongly categorised transactions.

6. Catch up any overdue update

The first standard quarterly deadline was 7 August 2026. The second is 7 November 2026.

HMRC will not apply penalty points for late quarterly updates during 2026 to 2027. This gives first-year users breathing room, not permission to skip the work. Your overdue status remains visible, and you need the required digital records and quarterly updates before you can submit the year's tax return.

Follow what your HMRC account and software show. If the first update is marked overdue, complete the catch-up workflow and send it rather than assuming the next deadline cancels it. If your current product cannot complete the job, compare MTD software options before importing your records.

What if HMRC is wrong?

An HMRC letter is based on tax-return data, which may be incomplete or out of date. Query the decision if:

• your qualifying income was not over £50,000
• HMRC has included income that does not count
• all relevant income sources ceased before 6 April 2026
• you are already exempt from MTD
• the letter relates to the wrong person, business or tax year

Do not simply leave the account untouched. Use HMRC's official contact route for Self Assessment, explain the specific discrepancy and keep a record of the conversation.

If you may be digitally excluded because of disability, age, remoteness, religion or another practical barrier, read HMRC's exemption guidance and apply. Cost or dislike of software on its own will not normally establish digital exclusion.

If an accountant handles your tax

Send the letter to your accountant promptly and ask four direct questions:

1. Are you authorised for MTD for Income Tax in your Agent Services Account?
2. Will you maintain the digital records, or do I need to do that?
3. Which software will we use, and who pays for it?
4. Who is responsible for each quarterly update and the year-end return?

An existing Self Assessment relationship does not always mean the newer MTD authorisation and software workflow are ready. Our guide to whether you need an accountant for MTD explains when software alone may be enough.

Your practical priority order

If you have just opened the letter, work in this order:

• verify the message in HMRC online services
• check every income source and correct anything wrong
• choose software that supports your full situation
• authorise the software and confirm your accounting period
• bring records up to date from April 2026
• send any overdue update shown in the service
• prepare for the 7 November 2026 deadline

The costliest mistake is delaying because the first deadline has passed. There is no quarterly late-submission penalty point this year, so use the breathing space to build a clean system now. Start with the software chooser, then complete the catch-up work while your bank statements and invoices are still easy to reconstruct.