Got an HMRC letter about Making Tax Digital? Here's what it means and what to do

What the HMRC letter says

The letter tells you that you'll need to use Making Tax Digital for Income Tax from 6 April 2026. It's being sent to anyone whose qualifying income from self-employment and property was over £50,000 in their 2024/25 tax return.

Making Tax Digital changes two things about how you report to HMRC. First, you'll need to keep digital records of your income and expenses using compatible software. Second, instead of filing one Self Assessment tax return at the end of the year, you'll send quarterly updates to HMRC throughout the tax year.

Your 2025/26 Self Assessment tax return still gets filed as normal. The new quarterly reporting starts from 6 April 2026.

The two things it asks you to do

The letter tells you to:

1. Get commercial software that works with Making Tax Digital for Income Tax

2. Sign up for Making Tax Digital so you're ready from 6 April 2026

This is where a lot of people get stuck. It reads like two separate tasks, and the letter doesn't say much about where to start.

What counts as commercial software?

Commercial software, in this context, means HMRC-recognised software that can keep digital records, send quarterly updates, and handle your tax return. HMRC publishes a list of approved software on GOV.UK, and Provestor is on it.

This is something that catches people off guard. Many landlords assume they need to buy a separate piece of software and then somehow connect it to HMRC themselves. In practice, the software and the sign-up process are linked.

When you sign up to Provestor, the onboarding process walks you through registering for Making Tax Digital at HMRC and connecting directly. Provestor takes you through the whole thing as part of getting set up.

The £50,000 threshold: gross, not net

The letter mentions £50,000 as the threshold. This is your qualifying income, which HMRC calculates before expenses or taxes are deducted. It's your gross income from property and self-employment combined.

This trips people up regularly. A landlord collecting £60,000 in rent but spending £35,000 on mortgage interest, repairs and management fees might think their £25,000 profit puts them below the threshold. It doesn't. The £60,000 gross figure is what counts.

If you're not sure whether you're above the threshold, HMRC provides a checking tool that confirms whether and when you need to join.

What if you have a tax agent or accountant?

The letter says to speak to your agent first and provide them with a copy of the letter. If your accountant is handling your MTD reporting, they may sign you up on your behalf. It's worth confirming with them what their plan is and whether they'll be using compatible software for your property income.

If you don't currently have an accountant handling this, or if you'd prefer to manage your own quarterly updates with professional support available when you need it, that's exactly what Provestor's plans are designed for. The DIY plan gives you full MTD-compatible record keeping and quarterly reporting. The Assisted and Done For You plans add increasing levels of professional support, right up to having Provestor's team handle the quarterly updates and year-end return on your behalf.

What if you're jointly owned?

Joint ownership is another common question that comes up. If you own properties with a spouse or partner, each person needs their own Provestor account. You set your ownership percentage (50/50, for example), and the app automatically apportions income and expenses in each person's quarterly updates. There's nothing extra to configure.

What about self-employment income?

If you have self-employment income as well as property income, both count towards the £50,000 threshold. For quarterly reporting, you'll need compatible software for each type of income. Provestor handles property income. For self-employment, you'd use a separate MTD-compatible product. HMRC's system is designed to accept quarterly updates from multiple software products, so the two work alongside each other. Everything comes together at year end in your final declaration.

What to do now

If you've received the letter, here's the practical sequence:

1. Check whether you're above the threshold using HMRC's checking tool

2. If you have a tax agent, speak to them about their plan for MTD

3. If you're handling it yourself or want to get set up with compatible software, sign up for Provestor — the onboarding walks you through HMRC registration and gets you connected and ready before 6 April

4. File your 2025/26 Self Assessment as normal — the new quarterly reporting starts from the following tax year

The letter can feel like a bigger deal than it is. The underlying requirement is to keep records digitally and send HMRC updates four times a year. If you've been filing Self Assessment, you already understand the information involved. The difference is frequency and format, not complexity.