Do I need Making Tax Digital for Income Tax?
Two things have to be true: the right kind of income, and enough of it. Here is how to tell in a couple of minutes.
Test one: is your income the right kind?
Making Tax Digital for Income Tax applies to sole traders and landlords registered for Self Assessment, with income from self-employment or property, or both. That is the whole population it touches.
You are potentially in scope if you:
- work for yourself as a sole trader, freelancer or contractor, or
- receive rent from property.
You are not in scope on the basis of:
- a salary taxed through PAYE,
- dividends, including from your own limited company,
- the State Pension or a private pension,
- your share of profit from a partnership as an individual partner.
If none of your income is from self-employment or property, you can stop here — this does not apply to you. You may still have a Self Assessment return to file; that has not changed.
Test two: is there enough of it?
The figure that matters is qualifying income: your total income from self-employment and property. this is the amount before expenses (also known as turnover).
That word before is where most people get it wrong. It is turnover, not profit. A landlord with £36,000 of rent, £9,000 of mortgage interest and £4,000 of repairs has qualifying income of £36,000. A sole trader who invoices £58,000 and nets £24,000 has qualifying income of £58,000.
| Qualifying income | Based on tax year | You must use MTD from |
|---|---|---|
| More than £50,000 | 2024 to 2025 | 6 April 2026 |
| More than £30,000 | 2025 to 2026 | 6 April 2027 |
| More than £20,000 | 2026 to 2027 | 6 April 2028 |
If you have both kinds of income, you add them together. Self-employment of £18,000 plus rent of £15,000 is qualifying income of £33,000 — over the £30,000 threshold, so caught from 6 April 2027.
The tax year in the middle column is the one that decides it
HMRC does not look at what you are earning now. It looks at the Self Assessment return for the tax year listed. Your 2027 position is decided by your 2025 to 2026 return — a year that has already closed.
Being over a threshold is not the last word
Some people are exempt or excluded even when both tests point at them: partnerships, trustees and personal representatives, people without a National Insurance number, and people who cannot reasonably use the software because of age, disability, location or religious belief. The exemptions page sets these out.
So what happens if you are in?
From your start date you have to:
- keep digital records of your self-employment and property income and expenses,
- send HMRC quarterly updates from compatible software,
- and finish the year through that software, with the return still due by 31 January.
You do not have to abandon spreadsheets. Bridging software connects to a spreadsheet you already keep and sends the updates from it.
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Common questions
Do I need Making Tax Digital for Income Tax?
You need it if you are a sole trader or a landlord registered for Self Assessment, you have income from self-employment or property, and your qualifying income is over the threshold for that start date — more than £50,000 from 6 April 2026, more than £30,000 from 6 April 2027, or more than £20,000 from 6 April 2028.
Does Making Tax Digital apply to employees?
No. Employment income taxed through PAYE does not count towards qualifying income. If PAYE is your only income you are not affected. If you have a job and also do self-employed work or let a property, only the self-employment and property income counts towards the threshold.
Does Making Tax Digital apply to partnerships?
Not currently. GOV.UK states that partnerships do not currently need to use Making Tax Digital for Income Tax. Your share of profit from a partnership also does not count towards your own qualifying income.
Does Making Tax Digital apply to limited companies?
Making Tax Digital for Income Tax applies to sole traders and landlords, not to companies. Dividends you take from your own company do not count towards qualifying income. Companies pay Corporation Tax, which is a separate regime.
I have a job and rent out one flat. Am I caught?
Only the rental income counts towards the threshold — your salary does not. So it depends on whether the rent alone, before expenses, is over the threshold for a given start date.
What if I am under the threshold but only just?
HMRC checks your qualifying income each tax year against your Self Assessment return, so a year where you go over can bring you into scope. It is worth checking your position after each return you file.
Where this comes from
Everything on this page traces to GOV.UK. Last checked 2026-08-11. If GOV.UK says something different, GOV.UK is right and we are wrong — please tell us.
- Check if you need to use Making Tax Digital for Income Tax
- Find out if and when you need to use Making Tax Digital for Income Tax
- Work out your qualifying income for Making Tax Digital for Income Tax
- Find out if you can get an exemption from Making Tax Digital for Income Tax
- Choose the right software for Making Tax Digital for Income Tax
Checked against GOV.UK on 2026-08-11. See every source we used.