Boxed Off Accounts › The HMRC letter
Making Tax Digital
You’re not in trouble. Nothing has gone wrong. Here’s what the letter is, what it wants, and what happens if you ignore it.
Since September 2026, HMRC has been signing people up to Making Tax Digital for Income Tax who should already be in it but hadn’t got round to signing up themselves. The confirmation turns up in the post, or sits in your HMRC online account.
It isn’t a fine. It isn’t an accusation. It isn’t an investigation. HMRC has looked at your last tax return, worked out that you’re over the threshold, and enrolled you. That’s all that has happened.
What it means is that from now on you send HMRC an update every three months, instead of doing one return a year.
The thing most people get wrong: they read it, feel slightly sick, put it in a drawer, and assume it’ll keep. It won’t get worse quickly - but one bit of it does get harder the longer it’s left, and that’s step 4 below.
The letter is short. What it’s actually asking for isn’t.
If you’ve only ever filed on paper or through someone else, you may not have logged in for years. Expect a password reset and a verification step.
HMRC has used a figure from your last return. Worth knowing what it is, because it’s the number that decides whether any of this applies to you at all.
You can’t do this on paper or through your online account. A spreadsheet on its own won’t do it either: the figures have to go through software on HMRC’s recognised list, or through ‘bridging’ software bolted onto the spreadsheet. Either way that means choosing one, usually paying for it, and learning it.
This is the one that gets worse with time. Digital records have to exist for the whole tax year, not just from the day the letter arrived. If it’s November, that’s seven months of bank transactions to go back over and sort out.
Three months is an evening. Seven is a weekend. By January it’s a job you’ll pay someone to do anyway, so it may as well be sooner.
The deadlines are the 7th of August, November, February and May. Then a final declaration by 31 January, which replaces the annual return you’re used to.
Straight answer, because there’s a lot of scaremongering about this.
There are no penalty points for late quarterly updates in the 2026/27 tax year. Points start on 6 April 2027 - four of them brings a £200 penalty, then £200 for each further miss. The penalties for filing your annual return late, or paying late, work exactly as they always have.
So right now, being behind is a job rather than a disaster. What it isn’t is something that goes away. And every month you leave it, step 4 gets bigger.
Sometimes it doesn’t, and it’s worth checking rather than complying with something that was never meant for you.
You can raise it with HMRC, and there are exemptions - for example if you genuinely can’t use digital tools. Don’t just assume you’re stuck.
One catch worth knowing if you’re CIS. The threshold is measured on what you invoiced before the 20% came off. So if £58,000 was invoiced and £46,000 reached your bank, HMRC is looking at £58,000 - and you’re in, even though you’d say you earn forty-six grand. More on that here.
All five steps are things we do. You send us the letter and do a twenty-minute set-up on your phone: an ID check, permission for the regulated firm behind Boxed Off to deal with HMRC for you, and connecting your bank or sending us statements. From then on we do the sign-up, the software, the catching up and the filing, and you get a message each time telling you it’s done. The only bit that stays with you is saying yes to the year-end figures each January.
From £29 a month. Not convinced once we’ve filed your first one? Every penny back.
Six questions, about a minute, and you get the answer on screen without giving us anything.
General information about how the rules work, correct as at September 2026. Not advice about your own tax position. Software is HMRC-recognised.