If you file a Self Assessment tax return, you may soon hear from HMRC about Making Tax Digital (MTD) for Income Tax. From November 2025, HMRC will begin sending letters to taxpayers who submitted a 2024–25 return, warning them that they’ll fall under MTD from April 2026.
What the HMRC Letter Means
The letter will:
- Confirm that, based on your income, you’ll need to start using MTD for Income Tax from April 2026
- Explain what you’ll need to do to prepare
- Include a QR code linking to GOV.UK guidance
- Encourage you to contact your accountant for support
In plain English: HMRC wants everyone who earns income outside PAYE to start keeping digital records and submitting quarterly updates instead of one annual return.
What You Should Do Now
If you’re a client of Cowal Accountants, we’ll contact you in early 2026 with clear next steps. In the meantime:
- Don’t panic when the letter arrives. It’s a heads-up, not a penalty notice.
- Make sure your bookkeeping is digital. If you’re still using spreadsheets, it’s time to switch to MTD-compatible software like QuickBooks, Xero, or FreeAgent.
- Keep an eye on updates. We’ll be running short briefings and guides as HMRC refines the process.
Testing the System Early
HMRC is allowing some taxpayers to join MTD early for 2025–26. Doing so gives access to a dedicated support team and helps iron out issues before the deadline. We’re happy to help clients volunteer if they’d like to test the new process early.
In Summary
MTD for Income Tax isn’t optional, but it doesn’t have to be painful. Start digital record-keeping now and stay in touch with your accountant — we’ll handle the transition, keep you compliant, and make sure you don’t lose time (or sleep) over it.
If you’d like to discuss getting ready for MTD, get in touch with Cowal Accountants today.
