Making Tax Digital for Income Tax: who needs it and when
Making Tax Digital (MTD) for Income Tax changes how sole traders and landlords report to HMRC: digital records, four quarterly updates a year, and a tax return submitted through software after the year ends. Here is who it applies to and when.
Who has to use it
It applies to sole traders and landlords whose qualifying income is above a threshold. Qualifying income is your gross self-employment and property income (turnover, before expenses) as reported on your Self Assessment return. Employment income, dividends and savings interest do not count towards it.
HMRC works out your start date from a past tax year's return, not the current year's income. It usually writes to tell you, but if no letter arrives you are still responsible for checking whether you need to start.
The dates
From 6 April 2026: qualifying income over £50,000 in the 2024 to 2025 tax year.
From 6 April 2027: qualifying income over £30,000 in the 2025 to 2026 tax year.
From 6 April 2028: qualifying income over £20,000 in the 2026 to 2027 tax year.
Partnerships are expected to follow later. HMRC has not set a date on the page we checked.
Can I start early?
You can sign up voluntarily if you are registered for Self Assessment and have filed a return in the last two years. You still file a Self Assessment return for the tax year before you start.
Can I be exempt?
Some people are exempt automatically, for example if their qualifying income is £20,000 or less, and do not need to contact HMRC. Others must apply, for example if they are digitally excluded because age, health, disability, religious beliefs or location mean they cannot reasonably use software. Exempt people still report their income in a Self Assessment return. See MTD exemptions.
What to do now
Check HMRC's service for your start date, start keeping digital records of income and expenses, and choose software that can send updates to HMRC. Snapfile can keep the records side tidy; see below for what it does and does not do today.
Common questions
Does Making Tax Digital replace Self Assessment?
No. You still submit a tax return after the tax year ends, but you do it through software, and you also send HMRC a short update every quarter during the year.
Is the threshold based on turnover or profit?
Turnover. HMRC adds your self-employment and property income together before expenses. See qualifying income.
Do limited companies need Making Tax Digital for Income Tax?
No. It covers individuals registered for Self Assessment with self-employment or property income. Income your company earns is not qualifying income, and nor are dividends from it.
What if HMRC has not written to me?
HMRC usually writes to tell you, but if no letter arrives you are still responsible for checking. The free MTD checker is a quick way to see where you stand.
Sources: GOV.UK: Find out if and when you need to use Making Tax Digital for Income Tax. This is general information, not tax advice; check GOV.UK or an accountant for your situation.
Check where you stand in a minute
Our free Making Tax Digital checker tells you whether and when MTD for Income Tax applies to you. Nothing you type leaves your browser.