HM Revenue & Customs (HMRC) has intensified its activity around Making Tax Digital for Income Tax (MTD for IT) ahead of the first mandatory phase from 6 April 2026. From that date, self-employed individuals and landlords with combined business and/or property income over £50,000 will be required to keep digital records and send quarterly updates to HMRC using approved software.
As part of its awareness campaign, HMRC is sending letters to around 200,000 affected taxpayers. This initial tranche focuses on those who filed their 2024-25 Self Assessment return by the end of August.
But this is only the beginning. The scale of MTD for IT is set to grow rapidly, with the number of affected taxpayers expected to reach:
- 864,000 by April 2026
- 1,077,000 by April 2027
- 975,000 by April 2028
In total, this means around 2.9 million individuals are expected to be brought into MTD for IT under the current plan.
If your income exceeds £50,000, you may already have received a letter reminding you of your upcoming MTD for IT obligations.
Who is receiving letters – and when?
HMRC is issuing both mandation letters and prompt letters to notify taxpayers of their responsibilities:
- Initial mandation letters are being sent to those who filed their 2024-25 Self Assessment return by 31 August 2025 and whose return included gross self-employment and/or property income above £50,000.
- Further mandation letters will be issued in February and March 2026 to taxpayers who file their 2024-25 return between September 2025 and January 2026.
- Prompt letters will be sent in late November 2025 to unrepresented taxpayers who have not yet filed their 2024-25 return, reminding them of the April 2026 start date.
Your responsibility to check if you need to comply
Receiving a letter does not in itself guarantee your MTD obligations and not receiving one does not mean you are exempt. It remains the taxpayer’s responsibility to confirm whether they fall within MTD for IT from April 2026 and take steps to sign up.
If you believe you should be part of the initial rollout but have not yet heard from HMRC, you should still take action now and ensure you are ready. Do not wait for contact from HMRC before preparing.
What the letters explain
The mandation and prompt letters outline:
- The need to change how you record and report income and expenses;
- What MTD for IT involves, including digital record-keeping and quarterly updates;
- How to prepare for April 2026, including choosing compatible software and signing up; and
- A reminder that you must still file a standard Self Assessment return for the 2025-26 tax year.
Budget 2025 – Announcements
Alongside this communication push, the government used Budget 2025 to set out further details on MTD for IT. To support the first group of taxpayers joining in April 2026, penalty points will be waived for late submission of their first four quarterly updates. This soft-landing applies only to the 2026 starters; those joining in April 2027 and 2028 will be fully subject to the new late-submission and late-payment penalty regime.
From 6 April 2027, this regime will apply to all Income Tax Self Assessment (ITSA) taxpayers not already due to join MTD for IT from this date. This is to eliminate worries about taxpayers facing different penalty rules depending on whether they are in MTD or the traditional ITSA system.
The government also confirmed that penalties for late payment of Income Tax (both SA and MTD) and VAT will rise from 1 April 2027, with detailed rates to be announced.
How M+A Partners can help
We understand that these changes may seem daunting, but we are here to support you every step of the way.
Our team can:
- Help you choose and set up MTD-compatible software;
- Provide training on how to use the software effectively;
- Assist with submitting your quarterly updates and End-of-Period Statement; and
- Ensure you remain compliant with HMRC’s requirements.
We have also created a range of useful resources to help you understand what MTD for IT means for you and to make your transition as smooth as possible. Visit our Making Tax Digital for Income Tax page to download our guides, including an overview of the upcoming changes and advice on choosing the right software.
Should you have any queries on the introduction of MTD for IT, or need help or advice on whether you will need to register and/or what software is available, then please either get in touch with your usual M+A Partners contact or email enquiries@mapartners.co.uk and we will be happy to help.