TaxReadySheets

Do I need Making Tax Digital for Income Tax, and when?

Making Tax Digital for Income Tax is being phased in for sole traders and landlords from April 2026, starting with the highest earners. Enter your qualifying income for the years HMRC looks at and this checker tells you the date you need to be ready by.

Checked for 2026/27 — uses the rates for 6 April 2026 to 5 April 2027, last reviewed 27 October 2026.

Your qualifying income

Qualifying income is your gross self-employment turnover plus your gross rental income, before any expenses. Do not include wages, pensions, savings interest or dividends.

6 April 2024 to 5 April 2025 — decides whether you join in April 2026.

Decides April 2027. Leave blank to assume the same as the year before.

Decides April 2028. Leave blank to assume the same as the year before.

Your MTD start date

You need Making Tax Digital from

–

Tax year checkedYour incomeOverMTD from

Results update as you type. No sign-up, and nothing you enter leaves your device.

Worked example

Morgan runs a small catering business and lets out a flat. In 2024/25 the business turned over £18,000 and the flat brought in £10,000 of rent. In 2025/26 the business grew to £22,000 and rent was £12,000.

Tax yearQualifying incomeThresholdResult
2024/25£18,000 + £10,000 = £28,000Over £50,000Not from April 2026
2025/26£22,000 + £12,000 = £34,000Over £30,000In from 6 April 2027

Morgan's profit is much lower than £34,000 once costs are taken off, but MTD looks at turnover and rent before expenses. Morgan needs MTD-compatible software and digital records from 6 April 2027, with the first quarterly update due by 7 August 2027.

How it works, in plain English

Making Tax Digital (MTD) for Income Tax changes how sole traders and landlords keep records and report to HMRC. Instead of one tax return a year, you keep digital records in compatible software and send quarterly summaries, then confirm the final figures after the year ends.

Who has to join, and when

  • 6 April 2026 — qualifying income over £50,000 in the 2024/25 tax year.
  • 6 April 2027 — qualifying income over £30,000 in 2025/26.
  • 6 April 2028 — qualifying income over £20,000 in 2026/27.

HMRC works this out from the tax return for the year shown, so there is always a gap: your 2025/26 return, due by 31 January 2027, decides whether you join in April 2027. "Over" means more than the threshold — exactly £30,000 does not bring you in.

What counts as qualifying income

Add together your gross income from self-employment (turnover, before expenses) and your gross income from property (rent, before costs). If you have more than one business, add them all. If you own a property jointly, count only your share of the rent. Employment income, pensions, savings interest and dividends do not count, even though they go on your tax return.

What changes in practice

You will need software that works with MTD — a bookkeeping app, or a spreadsheet with bridging software. Quarterly updates are due by 7 August, 7 November, 7 February and 7 May, and a final declaration by 31 January replaces the old tax return. Your tax payment dates do not change. If your income later drops below the threshold for three years in a row, you can leave.

Exemptions

Some people can be exempt — for example if age, disability, location or religious belief means using digital tools is not reasonably practical. You have to apply to HMRC; it is not automatic. Partnerships are not included yet.

Frequently asked questions

Is Making Tax Digital based on turnover or profit?

Turnover. HMRC looks at your gross self-employment income and gross rental income before any expenses are taken off, added together. A sole trader with £35,000 of sales and £20,000 of costs is still over the £30,000 threshold.

I have a job and a small side business. Does my salary count?

No. Only self-employment and property income count towards the MTD thresholds. Someone earning £60,000 from a job and £8,000 from a side business has qualifying income of £8,000.

What happens if I am exactly on the threshold?

You must be over the threshold to be brought in. Qualifying income of exactly £50,000, £30,000 or £20,000 does not count as being over it.

Can I still use a spreadsheet for MTD?

Yes, as long as you link it to HMRC with MTD-compatible bridging software. The records themselves must be kept digitally, and the quarterly updates sent from software rather than typed into a website.

When is my first quarterly update due?

The first quarter of the tax year runs from 6 April to 5 July, and its update is due by 7 August. So if you join on 6 April 2027, your first update is due by 7 August 2027.

Will thresholds go below £20,000?

No lower threshold has been confirmed at the time of writing. We will update this checker if HMRC announces one.

Estimates only, not tax advice. These figures are a guide based on the information you enter and the 2026/27 rules. Your own position can differ — check GOV.UK or an accountant before relying on them.