Ahead of the introduction of MTD, taxpayers with combined gross income from sole trades and property over £50,000 in the 2024/25 tax year should make sure they sign up. Agents can sign up clients on their behalf.
From this week, HMRC is sending out mandation letters to taxpayers who filed their 2024–2025 tax return by the end of November 2025 and are required to comply with MTD income tax from April 2026, asking them to sign up. From the middle of March, a final letter from HMRC will be sent to taxpayers that filed their 2024-2025 tax return by 31 January 2026.
While the letters are being sent over a two-week dispatch in February and March, some taxpayers will not receive theirs until April – the point at which they will need to start keeping digital accounting records if they do not already do so. Taxpayers who meet the criteria will still need to sign up even if they don’t receive a letter.
Many taxpayers may assume that HMRC will do this for them. However, that is not the case. It is the responsibility of taxpayers to ensure they are signed up to MTD, explained ICAEW.
In addition, ICAEW noted that tax agents will not receive a copy of any letters sent to taxpayers by HMRC. Taxpayers should share the letter with their agent if they have one, as they can help with the signing-up process and in preparing for MTD income tax.
Lindsey Wicks, ICAEW Senior Technical Manager, Tax Policy, explained:
“MTD for income tax represents the most significant change to income tax reporting for taxpayers and agents for almost three decades. It is important that taxpayers understand their responsibilities, beginning with signing up for MTD income tax. Once in MTD income tax, they will need to keep digital records and submit quarterly updates and an end of year return to HMRC using compatible software.
“A letter from HMRC indicates that it’s time to get serious about MTD income tax. Taxpayers should consider signing up now, and agents should consider how and when they will sign up their clients, so they can get ahead of the curve before the first quarterly updates are due for submission by 7 August.
ICAEW's Tax Track podcast in November 2025 focused on MTD for income tax and discussed some of these issues.
For more information, visit ICAEW’s MTD hub or an explainer on what is MTD.
ENDS
Notes to editors:
MTD income tax for sole traders and landlords will be phased in:
- from April 2026, where their annual turnover exceeds £50,000;
- from April 2027, where their annual turnover exceeds £30,000; and
- April 2028 where their annual turnover exceeds £20,000.
Contact ICAEW media office:
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