HMRC Begins Writing MTD Letters to Taxpayers Ahead of April 2026 Implementation

HMRC has begun writing to taxpayers who will fall within the first phase of Making Tax Digital for Income Tax (MTD ITSA), which starts in April 2026. This agency has confirmed that letters are now being issued to individuals whose reported income places them within scope.

This is not an early implementation of MTD. Rather, it is a preparatory step ahead of the first mandated phase, which begins on 6 April 2026. HMRC is using information from submitted 2024/25 tax returns to identify taxpayers whose gross income exceeds the £50,000 threshold and who will therefore be legally required to comply from that date.

In short, the regime has not yet begun, but HMRC is now formally notifying those who must comply in less than two months.

Who Is Receiving These MTD Letters?

HMRC is sending these letters to individuals whose 2024/25 Self Assessment Tax Return shows gross income above £50,000 from self-employment, property income or a combination of both. It is important to note that the £50,000 figure refers to gross income, not profit. This distinction is particularly important for landlords and sole traders who may have high turnover but more modest taxable profits.

HMRC has already issued one batch of letters to taxpayers who had filed their 2024/25 Self Assessment return by the end of November 2025. A further batch is expected to be sent in March to those who filed by the 31 January 2026 deadline.

Does Receiving an MTD Letter Mean I am Automatically Signed Up?

No. The letter is a notification, not an automatic enrolment.

Taxpayers who receive the correspondence (like the sample shown below) are being informed that they will be required to comply with MTD for Income Tax from April 2026, but they are not being signed up. Taxpayers must bear the responsibility of registering for MTD themselves.

Agents are not being copied into these letters. HMRC is only writing to taxpayers. This means accountants may be unaware that their client has been contacted unless the client forwards the letter. So, taxpayers have the added responsibility of contacting their accountants themselves.

What Happens If I Do Not Receive a Letter?

The obligation to comply with MTD from April 2026 is determined by income levels, not by whether an HMRC letter is received.

If a taxpayer’s gross self-employment and/or property income exceeds £50,000 for 2024/25, they are expected to comply from 6 April 2026 even if they do not receive this letter from HMRC. Administrative oversight does not remove the statutory requirement.

Why Is April 2026 So Significant?

April 2026 marks the first phase of Making Tax Digital for Income Tax. From that date, individuals within scope will be required to:

• Keep digital records using HMRC-recognised software like RentalBux
• Submit quarterly updates to HMRC
• Complete a final declaration at the end of the tax year

This represents a structural shift away from the traditional once-a-year Self Assessment Tax Return towards a system of more frequent digital reporting.

Why Does This Matter for Landlords & Sole Traders?

Many landlords and sole traders will fall into the first wave purely because the threshold is based on gross income. A landlord with rental receipts above £50,000, even if heavily mortgaged, may be within scope.

The letters serve as an early warning that HMRC has moved from general awareness messaging to the targeted identification of taxpayers who will be mandated to use MTD from April 2026.

What Should Taxpayers Do Now?

The most immediate step is to review your 2024/25 tax return and confirm whether your combined gross self-employment and property income exceeds £50,000.

If it does, you should:

• Ensure you understand the April 2026 MTD start date
• Speak with MTD experts like UK Property Accountants
• Begin considering appropriate digital record-keeping solutions

The letters themselves do not require instant action, but they do confirm that HMRC expects affected taxpayers to prepare for compliance ahead of the April 2026 commencement date.

Conclusion

While the April 2026 starting date only applies to those with gross income above £50,000, those with income above £30,000 and £20,000 are expected to fall within MTD’s scope from April 2027 and April 2028 respectively. The current correspondence, therefore, represents the first stage of a broader structural reform of Income Tax reporting.

For now, however, the focus remains firmly on those within the £50,000 threshold who will be brought into the system from April 2026. But this does not mean that those with lower income levels must not start paying attention.