Making Tax Digital · Sole traders
Receiving an HMRC MTD letter in September: how to respond
ONLY£15A MONTHAn HMRC letter about MTD should prompt a check of the actual notice and your circumstances.
An HMRC letter about MTD should prompt a check of the actual notice and your circumstances. From September 2026, HMRC is signing up certain people who should already be using MTD but have not registered. That confirmed process should not be exaggerated into an unverified universal enforcement campaign.
Read what the notice says has happened
HMRC's automatic sign-up guidance says the process happens in stages, with contact after sign-up. Confirmation may arrive by post or through HMRC online services depending on circumstances.
Check the tax year, income basis and action requested. If you believe an exemption or change affects the requirement, follow the official route to resolve it. Do not ignore a genuine notice merely because the first-year quarterly penalty concession applies.
Verify and coordinate the response
Use your established HMRC sign-in route or official contact details to check an unexpected message. Avoid relying on a phone number or payment link in an unverified communication. Tell your accountant about the notice if they act for you.
Determine what remains incomplete: software selection, authorisation, digital records or reporting. HMRC sign-up does not itself connect bank accounts, categorise transactions or appoint a professional adviser.
Worked example: the adviser has not seen the notice
A client receives a sign-up confirmation by post but assumes the accountant received the same information. The client shares it through the agreed secure channel and the practice checks the status and next steps.
That handover prevents duplicate registration attempts and makes responsibility clear. The practice then establishes the relevant records and outstanding updates.
Make responsibility visible at each stage
An effective practice process identifies who supplies the records, who resolves queries, who reviews the figures and who submits. Record those responsibilities in the engagement and workflow. Do not rely on the assumption that somebody else has completed the final step.
Agent authorisation is also separate from client consent to a commercial service. Use HMRC's correct MTD authorisation process and the agent's own access. A client should not hand over their Government Gateway password simply to make the process more convenient. HMRC explains how to authorise an agent.
Track each relevant business and period. A green client-level indicator can hide an outstanding property update if the sole-trade update has been completed. Store the approved figures and acknowledgement against the correct record.
For recurring work, use a short exception list rather than sending the client every transaction again. Give each question a reference, amount and clear request. Access controls and a secure reply route matter, especially where the same practice handles several family members or businesses. Good workflow design reduces repeated questions without replacing professional judgement.
Understand the first-year concession
HMRC states that there are no penalties for missing quarterly-update deadlines for the 2026/27 tax year. That concession does not remove the digital-record or quarterly-reporting obligations, and it does not make all tax returns and payments penalty-free. Read the precise penalty guidance.
Outstanding quarterly reporting must be dealt with before completing the relevant annual return. However, a missed August 2026 update should not be described as an automatic penalty on the separate 2025/26 return due in January 2027. The 2026/27 annual-return deadline is January 2028.
After the first-year concession, the points rules apply to missed quarterly deadlines as described by HMRC. Do not assume that multiple businesses create multiple points at the same deadline. Annual-return rules, late-payment penalties and interest require their own checks.
If you have fallen behind, establish what is outstanding and work through the supported catch-up process. Keep evidence of technical problems and contact the appropriate support team with the business, period and error details. The useful next step is a complete record and an accepted update, rather than guessing what a generic warning might mean.
Share the information needed for the task
Tax records need to be useful without containing unnecessary personal detail. Keep payment references sufficient to reconcile the accounts, and hold sensitive client notes in the appropriate restricted system. Financial software should not become a second, informal store for clinical notes or identity documents.
Use individual accounts and the access controls available for the service. Remove access when a working relationship ends. A secure product can still be misused through shared sign-ins, forwarded access links or files sent to the wrong person.
For Open Banking, distinguish account-information access from payment initiation. Read the consent screen and check the authorised provider. Account-information permission does not itself authorise moving money, but Open Banking as a whole also includes separately authorised payment services. The FCA explains these different services.
If you need an assurance about encryption, hosting, retention or security testing, ask for the current documented answer. Terms such as “bank-grade” do not tell you which controls apply to a particular service. Choose a workflow whose permissions and responsibilities you understand, and protect the email or phone account used to recover access.
Keep a correspondence and action record
Retain the notice, verification and agreed next steps. Complete the supported catch-up work and confirm the outcome. If the facts do not match HMRC's record, address the mismatch through the stated process rather than making assumptions from a generic news headline.
Take the next step
Avona.app offers a self-service route from £15/month. Bring your records together, review the figures and choose a workflow that fits your business. For professional help, discuss the scope and total price of Avona Concierge, managed by chartered accountants, before choosing a service.