Got a Brown Letter From HMRC? Here's What It Means

If a brown envelope from HMRC has landed on your doormat lately, you’re not alone. It’s part of their heads-up campaign about something called MTD for ITSA. Bit of a mouthful, we know – but bear with us, because it’s something you’ll want to be aware of.

Let’s break it down in plain English.

So, what actually is MTD for ITSA?

It stands for Making Tax Digital for Income Tax Self Assessment. It’s HMRC’s way of nudging the tax system into the digital age – and yes, it’s going to affect how sole traders and landlords report their income.

Here’s the gist:

If you’re self-employed or earn income from property, you’ll soon need to:

• Keep digital records of what comes in and goes out
  
  
• Use software that talks nicely to HMRC (we can help with that)
  
  
• Send updates every quarter, instead of just once a year
  
  
• File a final tax return online at the end of the year

The switch is being rolled out in stages, starting with:

• April 2026 if your total income (not profit!) from self-employment and/or property is over £50,000
  
  
• April 2027 if your income is over £30,000

If your 2023–24 tax return shows you’re already near or above the £50k mark, you’ll likely get a letter from HMRC sometime in 2025 as part of their awareness campaign.

If you do get a letter – don’t panic

We know a brown envelope from HMRC can make your stomach drop a little. But in this case, it’s just a nudge to start thinking ahead.

There’s no mad rush. You’ve got time to get everything sorted, and we’re here to help you do exactly that – without it becoming another thing on your already-too-long to-do list.

We’ll help you get everything set up

We’ve already helped plenty of our clients switch to MTD-friendly systems, and trust us – it doesn’t need to be complicated or stressful. We’ll walk you through what you need to do, help you choose the right software (and show you how to use it), and make sure you’re ticking all the right boxes.

If you’ve had the letter and want to talk through what it means for you – or you just want to get ahead of the game – drop us a line on 01709 589 439.