The MTD letter will begin landing with thousands of landlords, sole traders and self-employed professionals, including estate and letting agents, as HMRC steps up preparations for Making Tax Digital for Income Tax. According to HMRC guidance, this initiative represents a new method of reporting income and expenses using digital systems rather than the traditional annual Self Assessment process…

HMRC has confirmed that people earning more than £50,000 from self-employment and/or property will receive a notice explaining how the new system will work and what they must do to comply.

What the MTD letter means for landlords and agents

The MTD letter explains that Making Tax Digital for Income Tax (MTD) will apply from 6 April 2026 to self-assessment taxpayers with qualifying income over £50,000. Under these changes, affected landlords and self-employed agents must keep digital records and send quarterly updates to HMRC through software that is compatible with Making Tax Digital.

This shift forms part of HMRC’s effort to improve tax accuracy and efficiency by phasing out manual and paper-based reporting. Leading professional bodies such as the Institute of Chartered Accountants in England and Wales (ICAEW) describe this digital transition as a fundamental change to how income tax records and submissions are handled.

When will the HMRC letters be sent?

HMRC has confirmed that it will issue MTD letters to taxpayers identified as within scope in two main batches, with letters sent between early and mid-February and again in March.

Each letter confirms that the recipient will be required to comply with MTD from the start of the 2026–27 tax year.

The first quarterly update for those joining MTD in April 2026 will be due on Friday 7 August 2026 — the deadline for the first report covering the period from 6 April to 5 July. See Quarterly reporting guidance from HMRC.

What information will the letter include?

The MTD letter will outline:

  • what Making Tax Digital for Income Tax is
  • when taxpayers must begin to use digital reporting
  • how quarterly updates will work
  • the requirement to use compatible software
  • how the new process differs from the traditional annual Self Assessment

Professional bodies like the Association of Chartered Certified Accountants (ACCA) note that under MTD taxpayers must use systems that avoid manual re-entry of data, relying on “digital links” to ensure accurate submissions.

MTD will be introduced in stages

While the first phase applies to people with income over £50,000 from April 2026, HMRC guidance confirms that the regime will expand:

  • From April 2027, those with qualifying income over £30,000 will join
  • From April 2028, the threshold will fall to £20,000

This phased rollout is designed to give taxpayers more time to adjust to the digital system. See HMRC guidance on qualifying income for MTD.

Will landlords and agents still submit a tax return?

Yes. Despite the quarterly reporting requirement, taxpayers will still need to make an end-of-year final declaration. The traditional annual Self Assessment tax return deadline of 31 January remains in place for the tax year ending 5 April prior to entering the MTD regime.

HMRC and professional advisers continue to emphasise that receiving the MTD letter should prompt early review of digital record-keeping processes, accounting software choices, and administrative workflows, rather than last-minute preparation.

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