Tax guide
Making Tax Digital for Income Tax Guide
Understand when Making Tax Digital for Income Tax may apply to sole traders and landlords, what qualifying income means, and what to prepare before your start date.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax changes how some sole traders and landlords keep records and report income to HMRC. Instead of relying only on a single annual Self Assessment workflow, people in scope need to keep digital records, use compatible software, send quarterly updates, and complete a final declaration.
The rollout is being phased in by qualifying income. That means the most useful first question is not simply whether you are self-employed or a landlord, but how much qualifying income you have from self-employment and property.
This guide was last reviewed on 24 May 2026. It is intended for planning and general understanding only; HMRC notices, official GOV.UK guidance, and professional advice should be used for final decisions.
Current MTD threshold timeline
What counts as qualifying income?
Qualifying income is broadly gross income from self-employment and property before expenses. It is not the same as taxable profit, and it can include both sole trader and landlord income together.
HMRC uses Self Assessment tax return information to identify people who need to use MTD for Income Tax. For example, the first phase from 6 April 2026 is linked to qualifying income over £50,000 in the 2024 to 2025 tax year.
Later phases are linked to later tax return years, so the checker asks which tax year your income figure relates to before giving a likely start point.
If your income is close to a threshold, or your tax return includes unusual items, check the official guidance before relying on a simple estimate.
What you may need to prepare
- Digital records for self-employment and property income.
- Software that is compatible with Making Tax Digital for Income Tax.
- A process for sending quarterly updates to HMRC.
- A final declaration process for the end of the tax year.
- A plan for separating personal spending from business or property records.
Why it is worth checking early
The practical work is not just pressing submit four times a year. Many people need to change how they keep records, choose software, clean up categories, and get used to a more frequent reporting rhythm.
Checking early gives you more time to test software, speak to an accountant, and avoid trying to rebuild a year of records at the last minute.
Making Tax Digital questions
Does MTD apply to profit or income?
The threshold is based on qualifying income, which is generally gross self-employment and property income before expenses, rather than profit.
Do landlords need to use MTD?
Landlords may need to use MTD for Income Tax if their qualifying property income, alone or combined with self-employment income, is above the relevant threshold.
What if I think I am exempt?
Exemptions and special cases need careful checking. Use GOV.UK guidance, HMRC, or a tax adviser before assuming MTD does not apply.
Is this guide tax advice?
No. It is general information and planning support. Your own tax position may depend on HMRC notices, tax return details, exemptions, and professional advice.
Ready to check your own position?
Use the Making Tax Digital readiness checker
Enter your income source, estimated qualifying income, and preparation status to see the likely start point based on current published thresholds.
Sources and review note
This guide was last reviewed on 24 May 2026. It is for planning only and does not replace advice from HMRC, an accountant, or a tax adviser.
Check official GOV.UK Making Tax Digital for Income Tax guidance before relying on a start date or exemption position.