HMRC Has Signed You Up for Making Tax Digital: What to Do Now

Why HMRC Signed You Up

GOV.UK explains it in one sentence: "If you need to use Making Tax Digital for Income Tax for the 2026 to 2027 tax year and have not signed up yet, we will sign you up. This is because our records show your qualifying income was over £50,000 in the 2024 to 2025 tax year."

Qualifying income is your self-employment and property income added together, before expenses. HMRC is doing this "in stages over the coming months" and contacts each person afterwards. The confirmation arrives in your HMRC online services or by post.

You do not sign up again, and there is nothing to accept or decline. What you do have to do is the five steps below. The guide to signing up is for people HMRC has not signed up yet.

Not Sure Whether You Have Been Signed Up?

Sign in to HMRC online services with the details you use for Self Assessment. GOV.UK says "a message will appear on screen confirming you are already signed up". If there is no message, you are not signed up yet, and you can still do it yourself or ask your agent to.

HMRC gives a reason to sign up yourself if you can: "When we sign you up, we use the information we already hold about you. This may not include any changes to your circumstances since you last submitted a tax return."

Step 1: Sign In and Select Making Tax Digital for Income Tax

Sign in to HMRC online services and select "Making Tax Digital for Income Tax". Use the Government Gateway details you already use for Self Assessment. If you have never used HMRC online services, you set up an account first.

Keep those details to hand. They are the ones you will use to connect your software in step 3.

Step 2: Check the Records HMRC Holds

HMRC shows you the self-employment and property income it holds, taken from your 2024 to 2025 tax return, and your 2025 to 2026 return if it arrived before you were signed up. You confirm what is right, add any income source that has started since, and tell HMRC about any that have stopped.

One thing surprises landlords: HMRC treats all of your UK properties as one UK property business, and all of your foreign properties as one foreign property business. So five rental flats are one business with one set of quarterly updates, not five. If the list in your software later shows a business you do not recognise, the help page on a business HMRC lists that you did not set up explains what it is.

If everything stopped before 6 April 2026, update your details in your HMRC online account. GOV.UK says "You'll not need to use Making Tax Digital for Income Tax, but you still need to submit your tax return for the 2025 to 2026 tax year." If it stopped on or after 6 April 2026, you still send a quarterly update up to the date it stopped and the 2026 to 2027 tax return, and then you are finished with it.

If you think you should not be in at all, GOV.UK says to contact Self Assessment general enquiries, and to check whether you qualify for an exemption, for example if it is not reasonable for you to use software.

Step 3: Get Software and Connect It

HMRC does not provide software. GOV.UK says to check that what you choose "covers all your income sources" and works with your accounting period, and notes "there are both free and paid for options available".

FileThat is HMRC-recognised for Making Tax Digital for Income Tax and covers self-employment, UK property and foreign property. You create an account, add your National Insurance number, and connect to HMRC by signing in on HMRC's own pages with the Government Gateway details from step 1. FileThat then asks HMRC for your businesses and lists them, so you file against the same records you confirmed in step 2.

Check your update periods before you send anything. Standard periods follow the tax year. Of calendar update periods GOV.UK says "you should use these if your accounting period is from 1 April to 31 March", and the choice cannot be changed for the rest of the tax year once an update has gone. The MTD deadlines page shows both sets of dates.

Step 4: Catch Up From 6 April

GOV.UK asks for two things: "catch up and create digital records from the start of the tax year", and "send your overdue quarterly update as soon as possible".

The records do not have to be typed one by one. In FileThat you can upload a bank statement as a CSV or PDF and accept the suggested categories, upload a spreadsheet you already keep, or photograph receipts. The Income and Expenditure ledger is free, so you can do all of the catching up before you spend anything. The digital record keeping guide covers what each record needs.

Then send what is overdue. The deadlines for 2026 to 2027 are 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027, and HMRC only began signing people up in September 2026, so at least the first had passed before your letter arrived. FileThat lists each period HMRC is still waiting for. Send an update for each one, earliest first. Every update covers the tax year so far, not three months, so once the records are in, the later ones take a moment each. The guide to what a quarterly update is explains what HMRC receives.

Step 5: Carry On

Once you are level, the routine is small: keep records as you go, send an update after each period ends, and send the tax return after the year ends. GOV.UK's own guide, "Use Making Tax Digital for Income Tax", covers each part (its first page is in the sources below), and the 2026-27 tax deadlines guide has every date in one place.

Are You in Trouble for Being Late?

Not for the quarterly updates. GOV.UK says "You'll not get penalty points for missing a quarterly update deadline for the 2026 to 2027 tax year."

Two things still bind. "You still need to keep digital records and send your final quarterly update for the tax year before you can submit your tax return", and "For the 2026 to 2027 tax year, penalty points will still apply for missing the tax return deadline." That deadline is 31 January 2028.

So being signed up late in the year costs you some catching up and no points. The MTD penalty calculator shows how points work in the years after.

Your 2025 to 2026 Tax Return Is Separate

Being signed up does not change the return for the year before. GOV.UK says "If you've not submitted your 2025 to 2026 tax return, you will still need to submit this by 31 January." That is 31 January 2027, sent as an ordinary Self Assessment return, not through Making Tax Digital software.

It is easy to let one push the other out. A late 2025 to 2026 return is penalised under the ordinary Self Assessment rules, while a late quarterly update for 2026 to 2027 carries no points.

What Catching Up Costs in FileThat

This part is FileThat, not GOV.UK. You pay per filing, not by subscription. One credit covers one new quarterly update, or one VAT return that is not a NIL return. Nothing else uses a credit. Catching up is no different: each overdue update you send is a new quarterly update and takes one credit, for each business you send it for.

You start with 4 free credits and no card. For one business that is the four quarterly updates of the year, overdue ones included. A sole trader who also lets property has two businesses and two sets of updates, so the free credits cover half the year. The records, the annual submission and the tax return cost nothing. The pricing page has the price of a credit.

If You Are an Agent

GOV.UK asks agents to check with each client whether HMRC has contacted them. Where a client has been signed up, you follow the same steps, signing in with your agent services account, and check that your authorisation for the client and Making Tax Digital for Income Tax have both been added. You then search for the client by Unique Taxpayer Reference and confirm their income sources.

FileThat handles the software side for a practice: see how FileThat works for accountants and the client onboarding guide.