HMRC begins direct contact with taxpayers
HMRC has confirmed that the first MTD mandation letters are being issued this month, marking a major step forward in the rollout of Making Tax Digital (MTD) for Income Tax. These letters are being sent to individuals and businesses who will be required to follow MTD rules from April 2026. If you receive one, it is a clear signal that HMRC believes you meet the criteria and should begin preparing now.
What are MTD mandation letters?
The MTD mandation letters are official notices from HMRC informing taxpayers that they will be legally required to comply with Making Tax Digital for Income Tax Self Assessment (ITSA). These letters are not reminders or guidance notes—they are formal communications that confirm future obligations. HMRC is contacting taxpayers early to give them sufficient time to understand the rules, update systems, and seek professional advice.
Who will receive these letters?
The first wave of letters is being sent to sole traders and landlords whose qualifying income exceeds £50,000 per year. HMRC uses submitted tax return data to identify those who fall within scope. Even if your income fluctuates, receiving one of these letters means HMRC considers you likely to meet the threshold and expects you to comply unless your circumstances change.
What does MTD mean in practice?
Under MTD for Income Tax, affected taxpayers must keep digital records and submit quarterly updates to HMRC using compatible software. Annual tax returns will still exist, but they will be supported by regular digital submissions throughout the year. This change is designed to improve accuracy and reduce errors, but it also means a significant shift away from spreadsheets and manual processes.
Why HMRC is acting now
HMRC has learned from earlier MTD programmes, particularly VAT, where many businesses felt unprepared. By sending MTD mandation letters well in advance, HMRC aims to reduce last-minute panic and encourage early adoption of compliant systems. This approach also gives taxpayers time to test software, train staff, and adjust workflows before mandation becomes compulsory.
What should you do if you receive a letter?
If you receive one of these letters, the most important step is not to ignore it. While you may not need to act immediately, you should review your current record-keeping methods and assess whether they meet MTD requirements. Speaking with a professional accountant, such as Care Accountancy, can help you understand your obligations and create a clear transition plan tailored to your business.
The role of accountants under MTD
Accountants will play a critical role in helping clients navigate MTD. From selecting the right software to ensuring submissions are accurate and on time, professional support can significantly reduce stress and risk. At Care Accountancy, we already help clients prepare for digital reporting and liaise with HMRC on their behalf, ensuring full compliance without disruption.
Preparing early gives you an advantage
Although mandation may still be months away, early preparation puts you in control. Businesses that plan ahead often find the transition smoother and gain better financial visibility through regular updates. As MTD mandation letters continue to roll out, now is the ideal time to get ready rather than wait until compliance becomes unavoidable.
Final thoughts
The arrival of the first MTD mandation letters signals that Making Tax Digital for Income Tax is no longer a distant concept—it is happening. Understanding what the letter means and taking early action can save time, money, and stress later. With the right guidance and systems in place, MTD can become a manageable and even beneficial change for your business.
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