Check the income figures, tax year and income sources HMRC used. If they are wrong, have ceased or an exemption applies, contact HMRC with evidence. Keep track of existing deadlines while the position is being resolved; do not simply ignore the notice.
First principle: do not ignore the notice
Even while you challenge the position, GOV.UK expects you to engage with the signup message. Sign in, check the income sources HMRC holds, and follow the published steps. Leaving the letter unopened does not pause obligations if HMRC’s records still show you in scope.
If you are already signed up and you apply for an exemption because your circumstances have changed, GOV.UK is clear that you should continue using Making Tax Digital for Income Tax while you wait for HMRC’s decision. An exemption application is not a pause button.
Common reasons the signup can look wrong
- Qualifying income mix-up. Thresholds use gross self-employment and property turnover before expenses, not profit. PAYE salary, pensions and dividends generally do not count toward the MTD total. See qualifying income explained.
- All trading/property income ceased before 6 April 2026. GOV.UK says you should not need MTD for Income Tax, but you must update HMRC (and still file any required Self Assessment return for 2025 to 2026).
- All sources ceased on or after 6 April 2026. You still need compatible software to send a quarterly update covering up to the date those sources ceased, and to submit your 2026 to 2027 tax return. You should not need MTD after that.
- Exemption (for example digital exclusion). Exemptions are specific; many need an application to HMRC (see GOV.UK’s apply for an exemption guidance, and our exemptions guide). Unfamiliarity with software alone is not treated as digital exclusion.
- Stale HMRC data. When HMRC signs you up it uses information it already holds. Changes since your last return may be missing until you update them in the service.
A calm dispute sequence
- Re-check the look-back figures on the Self Assessment return HMRC used (for the April 2026 wave, typically 2024 to 2025 qualifying income over £50,000).
- Use official checkers (HMRC’s tool on GOV.UK, and TaxSimba’s MTD checker as a prompt), then compare to GOV.UK text, not forums.
- Update ceased or new income sources in HMRC online services where the signup flow asks you to confirm records.
- Contact HMRC if you still disagree. GOV.UK directs people who think they do not need the service to Self Assessment general enquiries (agents use the agent helpline). Ask about exemptions if that is your basis.
- Keep evidence: copies of returns, cessation dates, exemption applications, and HMRC correspondence.
What if HMRC is right after all?
Then treat the signup as real and move to digital records and quarterly updates (yourself or via an agent). The setup walkthrough is in the signed-up next-steps article. If you want accountant-led help once the dispute is settled, see the Making Tax Digital service. TaxSimba does not claim to overturn HMRC decisions for you.
Only HMRC can confirm your exemption or remove an incorrect obligation.
Build the disagreement from documents
Illustrative preparation example.
A notice refers to a trade that has stopped. Keep the cessation date, final accounts and relevant HMRC correspondence together. Explain which fact is wrong and what correction you are requesting, rather than replying only that your current income is lower.
Check: Which recorded fact supports your disagreement with signup?
| Check | Practical action |
|---|---|
| Which income year did HMRC use? | Compare the actual gross figures with the threshold for that start date. |
| Have all relevant sources ceased? | Record exact cessation dates and check continuing property or other trading income. |
| Is the issue an exemption application? | Follow the official application route and retain the response; do not assume the application suspends duties. |
Can TaxSimba remove an HMRC obligation?
Only HMRC can confirm the correction or exemption. An authorised adviser can help organise evidence and use the appropriate contact process.
Does a lower current-year profit prove the signup is wrong?
No. The start test normally uses qualifying gross income from a specified earlier return. Falling income and exemption rules need their own check.
Download a checklist for this guide
- Copy the HMRC message and stated start date.
- Locate the return and income figures used.
- List continuing and ceased sources with dates.
- Gather evidence for any exemption or correction.
- Record HMRC contact, reference and written outcome.