Do I Need to Use Making Tax Digital for Income Tax?
If your gross self-employment and/or property income was over £50,000 in 2024/25, yes. Here's exactly how the threshold works.
Do I need to do this?
You need to use Making Tax Digital for Income Tax from 6 April 2026 if you are a sole trader or landlord registered for Self Assessment and your gross income from self-employment and/or property was more than £50,000 in the 2024/25 tax year, unless you are exempt.
That's gross income, not profit, and it's self-employment and property income added together if you have both. If you're under £50,000 for 2024/25, you are not in scope yet, but the threshold drops in future years, so it's worth knowing where you stand. The sections below cover exactly how the figure is worked out.
The three thresholds and when they apply
MTD for Income Tax is being phased in over three tax years, based on three different thresholds:
| If your qualifying income was over | For tax year | You need to use MTD from |
|---|---|---|
| £50,000 | 2024/25 | 6 April 2026 |
| £30,000 | 2025/26 | 6 April 2027 |
| £20,000 | 2026/27 | 6 April 2028 |
The £20,000 threshold for April 2028 is confirmed. There's no confirmed date for mandating anyone below £20,000. If you see a figure below £20,000 quoted anywhere as settled, treat it as speculation, not fact.
It's gross income, not profit
This is the point that catches people out. The £50,000 threshold is measured on your turnover, before you deduct any expenses, not on what you actually pay tax on.
| Amount | |
|---|---|
| Turnover (gross income) | £60,000 |
| Expenses | £45,000 |
| Profit | £15,000 |
In this example, the trader's profit is only £15,000, well under £50,000. But their qualifying income is £60,000, the turnover figure, which puts them in scope. If you've been checking against your profit figure, it's worth re-checking against your turnover instead.
It's combined income across sources
If you have more than one qualifying income source, for example a sole trade and a rental property, the figures are added together to test against the threshold.
| Income source | Gross amount |
|---|---|
| Self-employment | £27,000 |
| Property income | £25,000 |
| Combined qualifying income | £52,000 |
Neither figure alone is over £50,000, but combined they are, so this person is in scope from April 2026. This applies whether you have two sole trades, a trade and a property business, or income from multiple properties.
If you're a landlord with jointly owned property, the rule works differently again: you only count your own share of the income, not the total. See our page on MTD for landlords for how that's worked out.
Enter your gross income and we'll check it against all three thresholds at once, so you can see your full position, not just one year. Nothing is sent anywhere.
Excludes: PAYE employment income, pensions, dividends and savings interest. These never count toward MTD qualifying income, however large.
HMRC uses your tax return to work this out
HMRC checks your qualifying income using the Self Assessment return you've already filed. For the April 2026 start date, that's your 2024/25 return. For April 2027, it's 2025/26. And so on.
This means your start date isn't a future guess, it's based on income you've already declared. If you've already filed a return showing qualifying income over the relevant threshold, the clock has effectively already started, even before you've signed up to anything.
If you amend your tax return, HMRC takes that into account. If you amend it before the tax year starts, the amended figure decides whether you need to use MTD that year. If you amend it after the year has started, only a change that takes you below the threshold counts. You can then opt out or carry on voluntarily. A change that takes you over the threshold after the year has started does not bring you in for that year.
You don't need a letter from HMRC for this to apply to you. HMRC reviews returns and writes to people it identifies as being in scope, but checking your own position is your responsibility. If your qualifying income is over the threshold and you haven't had a letter, the obligation still applies. Since September 2026, HMRC has also been signing up people who needed to start MTD in April 2026 but had not signed up. If HMRC has not signed you up yet, do not wait. Sign up yourself, or ask your accountant to do it, and start catching up on your quarterly updates.
Common questions
Not yet, but check the figure carefully. Make sure you're using gross income, not profit, and that you've added together all qualifying sources. If you're close to the threshold, it's worth reviewing each tax year as the lower £30,000 and £20,000 thresholds arrive.
You're in scope. Qualifying income is the combined total of gross self-employment income and gross property income, even if neither one alone is over the threshold. You'll need to submit quarterly updates for each sole trader business separately, and one set for all your UK property income combined.
No. Qualifying income only includes gross self-employment income and gross property income. PAYE employment, pensions, dividends, savings interest and partnership profit share are all excluded from the calculation.
A letter is not a precondition. HMRC reviews tax returns and writes to people it identifies as being in scope, but it remains your responsibility to check your own qualifying income against the threshold. If you're over the threshold, the duty applies whether or not you've heard from HMRC. Since September 2026, HMRC has also been signing up people who needed to start MTD in April 2026 but had not signed up. If HMRC has not signed you up yet, do not wait. Sign up yourself, or ask your accountant to do it, and start catching up on your quarterly updates.
The £30,000 threshold applies from April 2027, based on your 2025/26 tax return. The £20,000 threshold applies from April 2028, based on your 2026/27 return. There's no confirmed date yet for any threshold below £20,000.
Your MTD start date is based on the first Self Assessment return you file that shows qualifying income over the relevant threshold. HMRC cannot assess your position until that return exists.
If you are new to self-employment, you must register for Self Assessment by 5 October following the end of your first trading year. So if you started trading in 2025/26, the deadline to register was 5 October 2026. If you started in 2026/27, it is 5 October 2027.
Once you are required to file a Self Assessment return containing financial information about your business, your MTD digital start date is 6 April in the following tax year. So if you started trading in 2025/26, are required to file a return for that year, and that return shows qualifying income over the relevant threshold, your MTD start date is 6 April 2027.
You must also register for MTD itself before your first quarterly update is due. Your accountant can do this on your behalf if you have one.
HMRC annualises it. If you only traded for six months and earned £28,000, HMRC doubles that to £56,000 to estimate what a full year would look like. That figure is what it uses to test against the threshold, not the actual amount on your return.
This can work against you if your first part-year was strong. It can also work in your favour if income was low in the early months but has since grown.
For property income, HMRC expects you to annualise the figure yourself when working out your own position.
HMRC uses your 2025/26 return, due by 31 January 2027, to assess your position for the April 2027 cohort. If that return shows qualifying income over £30,000, you are mandated from 6 April 2027.
If your income was also over £50,000 in 2024/25 and you were trading in that year, HMRC will have already identified you for the April 2026 cohort based on that earlier return.
If 2025/26 is the first year you crossed any threshold, April 2027 is the earliest you could be mandated.
The default rule under Regulation 26(d) of The Income Tax (Digital Obligations) Regulations 2026 (SI 2026/336) is that where income covers a period shorter than 12 months, HMRC annualises it proportionately. Applied to your first six months only, that would double £16,000 to £32,000.
But the same regulation provides an alternative. If straight-line proportioning would work unreasonably or unjustly, the figure can be adjusted on a just and reasonable basis instead.
In your case, your full year's income was £24,000. That is well below any current threshold. The proportionate annualisation of the first six months alone would produce a figure that does not reflect reality. That may be the kind of situation where the just and reasonable alternative could become relevant.
However, HMRC has not yet published detailed guidance on how to invoke this alternative or what evidence they expect. If your income is seasonal and annualisation of a part-year figure would produce a misleading result, this is worth discussing with an accountant before assuming you are either in or out of scope.
This page is general guidance, not advice for your own circumstances. It was correct as at the date shown at the top, and tax rules and rates change over time. Please take advice on your own position before acting on anything here.
Ready to get your returns right? We handle the whole process for you.
Book a free call