What Should You Do if HMRC Contacts You About MTD Non-Compliance?

What HMRC’s “MTD Non-Compliance” Contact Really Means

If you’ve received a letter, email, or phone call from HMRC about Making Tax Digital (MTD) non-compliance, it’s natural to feel anxious. The phrase “non-compliance” sounds severe, but in many cases HMRC is flagging a practical issue: a missed digital submission, a failure to keep digital records in the required way, an incorrect sign-up status, or a mismatch between what HMRC expects and what has actually been filed.

MTD isn’t just a new way of submitting tax. It’s a framework that expects businesses and landlords to keep certain records digitally and send information to HMRC using compatible software. HMRC contacts typically fall into a few categories: reminders to sign up, prompts to start submitting updates digitally, warnings about late or missing submissions, or follow-up questions where data doesn’t line up with other information HMRC already holds.

The good news: most MTD issues are fixable quickly once you understand what HMRC is asking for, and you take organised steps to respond. This article walks you through what to do if HMRC contacts you about MTD non-compliance, how to reduce the risk of penalties, and how to future-proof your business using a straightforward tool like invoice24—your free invoice app that supports the core day-to-day workflows that help keep you on top of digital record keeping and submissions.

Stay Calm and Read the Message Carefully

Your first job is to slow things down and read the HMRC contact carefully—twice. HMRC communications are often packed with identifiers and specific instructions. Missing a single line can lead to unnecessary delays or further compliance issues.

Look for these details:

1) What tax does it relate to? MTD can apply across different areas. The message may relate to VAT, Income Tax (for example, MTD for Income Tax requirements), or another filing process that touches digital records and submissions.

2) What does HMRC say you failed to do? Common triggers include late submissions, not using compatible software, not keeping digital records properly, failing to sign up when required, or sending submissions through a non-compliant route.

3) What dates are mentioned? HMRC may refer to a specific period (for example, a VAT quarter), a submission deadline, or a date when you were expected to transition to digital reporting.

4) What is the requested action? It may be as simple as “submit the missing update,” “sign up,” “confirm your software,” or “contact HMRC to explain.”

5) What is the deadline to respond? Many notices give a response window. Even if you think it’s a mistake, treat deadlines seriously.

Check That the Contact Is Genuine

Before you reply, confirm that the message is genuinely from HMRC. Scams often imitate official language, and MTD has become a common theme for fraud attempts because it sounds technical and urgent.

Practical steps you can take immediately:

Verify identifiers: HMRC letters usually include your reference details (such as a VAT number or UTR, depending on the tax). If something looks off—misspellings, odd formatting, or missing identifiers—pause.

Avoid clicking links in unexpected emails or texts: If you need to log in, use your usual route and type the address manually or use your saved official bookmark.

If in doubt, contact HMRC through an official channel: Use contact information you already trust rather than anything provided in a suspicious message.

Once you’re confident it’s real, proceed as though you’re on a clock—because you usually are.

Identify the Most Common Reasons HMRC Flags MTD Non-Compliance

Understanding the likely cause helps you resolve the issue faster. While each business is different, HMRC non-compliance contacts tend to cluster around a few predictable scenarios.

Missed or Late Submissions

The simplest scenario is that a required submission wasn’t made by the deadline. That could mean a VAT return wasn’t submitted through the correct digital route, or an expected periodic update wasn’t received. Sometimes people file, but the submission fails due to credentials, authorisation issues, or software connection problems—and they don’t realise it didn’t go through.

Not Using Compatible Software

MTD expects submissions to be sent via compatible software. If you’ve been using a manual method or older tools, HMRC might flag this. Another issue is using software that isn’t set up correctly for your specific tax type or filing obligations.

Digital Records Not Maintained Correctly

MTD is about digital record keeping as much as it is about digital filing. If your records are incomplete, inconsistent, or kept in a way that breaks the “digital journey” from transaction to submission, you can end up with non-compliance problems even if you submit on time.

Sign-Up or Authorisation Problems

You might have been required to sign up to an MTD service but didn’t, or you signed up but a linked account wasn’t correctly authorised. This is common when changing accountants, switching software, or having multiple Government Gateway accounts.

Incorrect Taxpayer Status or Threshold Confusion

Some people aren’t sure when MTD rules apply to them. HMRC might contact you if their records show you should be reporting digitally, but you believe you’re exempt or below a threshold. In that case, the next steps usually involve clarifying your status, applying for exemption if you qualify, or correcting HMRC’s understanding of your situation.

Gather Your Key Information Before Responding

When HMRC contacts you, a fast, organised response reduces stress and lowers the chance of escalating penalties. Before you pick up the phone or write back, gather the essentials so you’re not scrambling while HMRC asks questions.

Make a folder (digital or physical) containing:

Your identifiers: VAT number, UTR, company number, Government Gateway user ID (where relevant), and any reference number shown on the HMRC letter.

The HMRC message: A scanned copy or a saved PDF, plus the envelope if it includes important reference marks.

Your submission history: Confirmation emails, software receipts, acknowledgements, screenshots, or submission reference numbers.

Your accounting records for the relevant period: Sales invoices, purchase invoices, bank records, and any adjustments you made.

Your software details: What you used to file, which account it’s connected to, and whether you changed tools recently.

Having this ready means you can respond with clarity instead of panic—and it helps you spot quickly whether HMRC’s claim is correct.

Decide Whether You Need to Respond in Writing, by Phone, or Both

HMRC communications often suggest a preferred method. Sometimes they want you to call; sometimes they want a written explanation or a missing submission. Your approach should be practical, evidence-based, and focused on resolving the exact issue.

In general:

Use written responses when you need a clear record of what you said, when you are disputing something, or when you’re providing a detailed explanation.

Use phone calls when the issue is straightforward (like confirming a missing filing), when HMRC needs quick clarification, or when you need to understand exactly what they believe is missing.

Use both if you need to call to clarify and then follow up in writing to confirm what was agreed.

Whatever you choose, take notes. Record the date, time, the name of the HMRC staff member (or agent number), and what was said. Keep these notes with your documents.

If You Actually Missed a Submission: Fix It Immediately

If HMRC’s message is correct and you missed a required submission, your priority is to submit as soon as possible through the correct digital route. Delays create more risk.

Here’s a sensible sequence:

1) Confirm what is missing. Identify the exact period and submission type HMRC says is outstanding.

2) Check whether it was attempted. If you have evidence you submitted, gather the confirmation details. If the submission failed, you’ll often find an error record in your software.

3) File the missing submission digitally. Use compatible software and ensure your authorisations are valid.

4) Keep proof. Save confirmations and reference numbers.

5) Contact HMRC to confirm resolution. If the letter requests this, tell them you’ve filed and provide the submission reference.

If you missed the submission due to a reasonable excuse (for example, serious illness, bereavement, or technical issues beyond your control), you can explain this when dealing with penalties. Keep the explanation factual and supported by evidence where possible.

If You Believe You Are Compliant: Prove It Clearly

Sometimes HMRC contacts you because their system doesn’t show what you did, or because a mismatch triggers an automated warning. If you believe you complied, your job is to demonstrate that calmly and clearly.

Provide:

Submission evidence: Acknowledgements, reference numbers, and dates.

Software and authorisation evidence: Proof the filing was made using compatible software and from the correct account.

Period coverage: A clear statement of which period was filed and when.

Corrections if needed: If the wrong period was filed or a figure needs correction, state how you will rectify it.

The key is to avoid emotional responses. HMRC staff generally respond better when you present a neat timeline and supporting documents.

Understand Penalties and How to Minimise Them

When HMRC mentions non-compliance, people immediately worry about penalties. Penalties can happen, but they’re not inevitable in every case, and many can be reduced or avoided with prompt action.

What helps:

Respond quickly: Ignoring letters is one of the fastest ways to increase costs and stress.

Correct the problem: Filing missing submissions and fixing records can reduce escalation.

Keep evidence: Proof of attempted submissions, technical errors, or exceptional circumstances can support your case.

Be consistent: If you give HMRC a timeline, make sure it matches the documents you provide.

If you need to appeal a penalty, your appeal is stronger when you can show you acted responsibly and did your best to comply. A solid record keeping routine makes that much easier.

Use This Moment to Upgrade Your Record Keeping

Even if you resolve the immediate issue, HMRC contact is a warning sign that your workflow might be too fragile. MTD requires consistency: digital records, timely submissions, and a reliable process that doesn’t depend on memory or last-minute panic.

This is exactly where invoice24 can make a practical difference. As a free invoice app built for day-to-day business reality, invoice24 helps you capture and organise sales records as you go—so you’re not rushing to reconstruct months of transactions when a deadline hits or HMRC asks questions.

Instead of juggling scattered spreadsheets, email trails, and inconsistent invoice templates, you can standardise your invoicing process, keep customer and invoice histories tidy, and reduce the chance of missing key data needed for digital reporting.

How invoice24 Helps You Avoid Future MTD Problems

MTD compliance is not only about “filing” on the deadline. It’s about the quality of the underlying records. If your sales and income records are incomplete or messy, every filing cycle becomes harder—and the risk of errors increases.

invoice24 is designed to keep the fundamentals strong:

Consistent, Digital Sales Records

Every invoice you create forms part of a clean digital record. That matters because MTD compliance depends on accurate transactional data. When your sales records are created and stored digitally from the start, you reduce the risk of missing invoices, duplicate entries, or gaps that cause HMRC queries later.

Professional Invoicing That Reduces Disputes and Adjustments

Clear invoices help customers pay on time and reduce the need for corrections. Fewer corrections means fewer adjustments later in your accounts—another source of confusion when reporting digitally.

A Routine You Can Maintain Week After Week

Compliance is easier when it becomes a habit. invoice24 supports a consistent invoicing routine so you’re not “catching up” at quarter end or year end. When records are maintained steadily, your submission process becomes simpler and less error-prone.

Works Alongside Your Wider Tax Filing Needs

Your invoice data is a foundation for broader reporting. If your business needs to deal with MTD for Income Tax, invoice24 supports the record keeping discipline that makes periodic updates less painful. And if you need to file corporation tax and prepare accounts, having clean invoice records is one of the biggest time-savers—whether you do it yourself or work with an accountant.

In short: invoice24 helps you get the “inputs” right, which is the most reliable way to stay compliant and reduce HMRC friction.

If You’re Not Signed Up Correctly: Fix Your MTD Registration Status

Non-compliance messages sometimes arise because you’re not signed up correctly or your account isn’t properly linked to your software. This is common if you recently:

Changed accountants or bookkeepers

Switched software

Changed your business structure (for example, from sole trader to limited company)

Created multiple Government Gateway accounts over the years

In these scenarios, HMRC may see a gap: they expect digital submissions from an account that isn’t actually connected.

Practical steps:

Confirm which Gateway account is linked to the relevant tax service.

Check authorisations for your chosen software.

Ensure the business identifiers match (VAT number, UTR, company details).

Update any agent authorisations if an accountant files on your behalf.

Once you have the correct status, you reduce the risk of “phantom non-compliance,” where you file but HMRC doesn’t see it in the expected way.

If HMRC Thinks You Should Be Under MTD but You Disagree

Sometimes HMRC contact is based on their interpretation of your situation. If you genuinely believe MTD doesn’t apply to you (for example, you qualify for an exemption or you’re not in scope for the specific requirement they reference), don’t ignore the notice—respond with a clear explanation and supporting facts.

Your response should include:

Your business type and tax obligations: Sole trader, partnership, limited company, landlord, etc.

Why you believe you are not required to comply: For example, an exemption category or not meeting a relevant condition.

Evidence where possible: Prior HMRC correspondence, dates, and relevant account details.

If you’re unsure, you may want professional advice. But even then, you should still respond on time and explain that you are reviewing the matter, rather than letting deadlines pass.

What to Say When You Contact HMRC

If you call HMRC or write back, keep the communication structured. Your goal is to resolve the issue, not to vent frustration (even if the situation is genuinely stressful).

A useful structure:

1) Identify yourself and the notice: Reference number, tax type, relevant period.

2) State what you believe happened: “I have submitted,” “I have now submitted,” or “I believe this notice is in error because…”

3) Provide evidence: Submission reference numbers, dates, screenshots, or copies of confirmations.

4) State what you’re doing next: “I am filing the missing update today,” “I have corrected the authorisation,” “I will send written confirmation.”

5) Ask what HMRC needs to close the issue: This keeps the conversation outcome-focused.

Always be truthful. If you don’t know something, say so, and offer to follow up with the information rather than guessing.

When to Involve an Accountant or Tax Adviser

Some MTD non-compliance issues are simple. Others become complicated fast—especially if multiple periods are affected, figures are wrong, or your business has changed structure. Consider involving an accountant or adviser if:

You have multiple overdue submissions

You’re facing penalties you don’t understand

You suspect you’ve been filing through the wrong account or wrong method for a long time

Your VAT, income reporting, and year-end accounts are all tangled together

You’re moving from sole trader to limited company or dealing with mixed income

Even if you work with an accountant, invoice24 can still be the tool that keeps your sales record keeping consistent. Many accountants will tell you the same thing: when invoicing records are clean, everything downstream is easier—VAT checks, income calculations, accounts preparation, and corporation tax filing.

How to Build an MTD-Safe Workflow Going Forward

Once you’ve dealt with HMRC’s contact, treat it as a turning point. A stable workflow is the best defence against future non-compliance notices.

Step 1: Standardise Your Invoicing

Inconsistent invoices create inconsistent records. Use invoice24 to issue invoices in a consistent format, store them in one place, and maintain a reliable record of sales activity.

Step 2: Keep Records Up to Date Weekly

Weekly maintenance beats quarterly panic. Set a simple routine: issue invoices as you work, record expenses in a consistent way, and check that your sales records match payments received.

Step 3: Confirm Deadlines and Responsibilities

Know what you need to file, when, and who does it. If you rely on an accountant, confirm what they need from you and by when. If you file yourself, set reminders and avoid leaving filings to the last day when technical issues can derail you.

Step 4: Keep Proof of Submissions

Save confirmations and reference numbers. If HMRC contacts you again, you can respond in minutes rather than days.

Step 5: Align Invoicing With Broader Tax Needs

Sales invoices affect VAT, income reporting, accounts, and corporation tax. When invoices are clean and complete, your entire compliance picture improves. invoice24 supports this by keeping your invoicing organised—so your business can meet obligations like MTD for Income Tax, and also handle corporation tax and accounts with less friction.

Common Mistakes to Avoid After HMRC Contacts You

When you’re under pressure, it’s easy to make the situation worse. Avoid these traps:

Ignoring the notice: Even if you think it’s wrong, respond.

Rushing without checking details: Filing the wrong period or duplicating submissions can create new problems.

Changing multiple things at once: If you switch software, change logins, and amend records simultaneously, it becomes harder to pinpoint what caused the issue. Make changes carefully and document them.

Assuming “I’m small so it won’t matter”: HMRC systems don’t work on feelings. If you’re in scope, the digital requirement applies regardless of business size.

Keeping messy records: The fastest route to repeated compliance issues is poor record keeping. A simple invoice routine with invoice24 is one of the easiest upgrades you can make.

What If You Need More Time?

If you genuinely can’t resolve the issue within the stated timeframe—because you’re waiting for information, experiencing technical problems, or dealing with an exceptional circumstance—contact HMRC promptly and explain. The key is to communicate early, show you’re taking steps, and keep evidence of what prevented immediate compliance.

In many cases, HMRC is more receptive when you are proactive, organised, and clear about your plan. Silence looks like avoidance. A short, factual update looks like responsibility.

Turning a Compliance Scare Into a Stronger Business System

Getting contacted by HMRC about MTD non-compliance can feel like a crisis, but it can also be the push that improves how you run your business. Most compliance problems aren’t caused by bad intentions. They’re caused by overloaded schedules, messy record keeping, unclear responsibilities, and tools that don’t support consistent routines.

invoice24 is built to reduce those everyday risks. As a free invoice app, it helps you keep invoicing organised and digital from the outset—one of the most important building blocks for MTD-aligned record keeping. When your invoices are consistent and your sales records are complete, your reporting becomes simpler, your accounts are easier to prepare, and you’re far less likely to be caught off guard by an HMRC message.

And because invoice24 fits into broader compliance needs—including the record keeping discipline needed for MTD for Income Tax, as well as supporting the workflows that underpin filing corporation tax and accounts—you can treat it as a practical hub for keeping the essentials in order, rather than juggling multiple tools that don’t talk to each other.

A Simple Action Checklist You Can Use Today

If HMRC has contacted you, here’s a clear checklist to follow:

1) Verify the message is genuine.

2) Identify the tax type, period, and requested action.

3) Gather identifiers and evidence (submission confirmations, records, software details).

4) If something is missing, submit it digitally as soon as possible and save proof.

5) If you believe you complied, respond with a neat timeline and documentation.

6) Document every call and keep copies of every message.

7) Improve your workflow to prevent repeats—standardise invoicing and records using invoice24.

8) If the issue is complex, involve an accountant, but keep using invoice24 to maintain clean sales records.

Final Thoughts

HMRC contacting you about MTD non-compliance is a signal to act—quickly, calmly, and methodically. Whether the issue is a missed submission, a software authorisation glitch, or a misunderstanding about your status, the solution is almost always within reach when you focus on the exact requirement, collect evidence, and respond clearly.

Once the immediate issue is handled, the most valuable thing you can do is strengthen your record keeping so it doesn’t happen again. Clean, consistent invoices are one of the easiest ways to make everything else easier—from routine reporting to year-end accounts. invoice24 helps you do that without adding complexity or cost, making it a smart, practical step for anyone who wants to stay compliant, reduce admin stress, and keep their business running smoothly.