Am I Affected by Making Tax Digital?
Enter your total annual self-employment income and/or property income (gross, before expenses) to check whether MTD for Income Tax applies to you and when.
How the MTD income thresholds work
The MTD income thresholds are based on your gross income — that is, your total turnover or rental income before deducting any expenses. If you have both self-employment income and property income, they are combined when assessing whether you exceed the threshold.
The rollout happens in three phases:
| Date | Gross income threshold | Status |
|---|---|---|
| 6 April 2026 | Over £50,000 | Mandatory |
| 6 April 2027 | Over £30,000 | Confirmed |
| 6 April 2028 | Over £20,000 | Confirmed |
| TBC | Below £20,000 | Not yet announced |
Real-world examples
- Freelancer earning £60,000 gross — Must comply with MTD from 6 April 2026 (even if profit after expenses is only £35,000).
- Landlord with £25,000 rental income + £10,000 freelance income — Combined gross income is £35,000. Must comply from 6 April 2027.
- Contractor earning £22,000 gross — Must comply from 6 April 2028 when the threshold drops to £20,000.
- Side hustle earning £8,000 — Below all announced thresholds. MTD does not currently apply.
Who is NOT affected by MTD?
MTD for Income Tax does not apply to the following groups:
- Employees paid through PAYE — Your employer already reports your income digitally. MTD only applies to self-employment and property income.
- Limited company directors — Limited companies fall under Corporation Tax, which has a separate MTD timeline. Dividends and director salaries paid via PAYE are excluded.
- Individuals below the threshold — If your combined self-employment and property gross income is below the current threshold, MTD is not mandatory for you (though you can volunteer).
- Pensioners with no self-employment income — Pension income reported through PAYE is not subject to MTD.
- Trusts and estates — These are not currently within scope for MTD for Income Tax.
What should you do next?
- If MTD applies from April 2026: Sign up for MTD with HMRC through your Government Gateway account, choose compatible software (FreeAgent, Xero, QuickBooks, Sage, or HMRC's free tool), and start keeping digital records immediately. Your first quarterly update is due by 7 August 2026. Check the full MTD deadline calendar.
- If MTD applies from April 2027 or 2028: Start researching MTD-compatible software and consider a trial period. Use the time to get comfortable with digital record-keeping before it becomes mandatory.
- If MTD doesn't apply yet: Keep filing Self Assessment as normal. Consider adopting digital record-keeping anyway — it makes your annual tax return easier and positions you well if thresholds drop further.
Use our self-employed tax calculator to estimate your 2026/27 tax liability, or our salary calculator if you also have PAYE income alongside your self-employment.
MTD and partnerships
Partnerships where any partner has qualifying income above the threshold are also affected by MTD. Each partner must keep digital records for their share of the partnership income. General partnerships are included from the same dates as sole traders, while limited liability partnerships and other complex partnerships have a later start date that has not yet been confirmed.
If you are in a partnership, the nominated partner will need to submit quarterly updates on behalf of the partnership, and each individual partner will also need to submit their own updates for any non-partnership income. This makes MTD compliance more complex for partnerships, and it is advisable to start planning with your accountant well ahead of the mandatory start date.
Voluntary registration for MTD
Even if your income is below the mandatory threshold, you can voluntarily register for MTD for Income Tax through your HMRC Government Gateway account. This can be useful if you want to test the process and software before it becomes mandatory, or if you prefer the discipline of quarterly digital reporting. Voluntary participants follow the same rules as mandated users — quarterly submissions, digital records, and the same deadlines. You can opt out if it does not suit you.
Frequently Asked Questions
How do I know if I need to comply with MTD for Income Tax?
You need to comply if you are self-employed or a landlord with total gross self-employment and/or property income above the threshold — £50,000 from April 2026, £30,000 from April 2027, and £20,000 from April 2028. The threshold is based on gross income (turnover), not profit after expenses.
Does MTD apply to my employment income?
No. MTD for Income Tax only applies to self-employment income and property income. If you are employed and paid through PAYE, that income is not subject to MTD. However, if you also have self-employment or rental income above the threshold, those sources must be reported through MTD.
Is the MTD threshold based on gross income or net profit?
The threshold is based on gross income — your total turnover or rental income before deducting any business expenses. For example, if you earn £55,000 gross but only £30,000 after expenses, you still exceed the £50,000 threshold and must comply from April 2026.
What if my income varies year to year?
HMRC will determine whether you need to comply based on your qualifying income in the relevant tax year. If your income drops below the threshold in a future year, you may be able to leave MTD, though the exact rules for exiting have not been fully confirmed. If your income rises above the threshold, you will need to join MTD from the next applicable tax year.
Do I need MTD if I have both rental and self-employment income?
Yes, your self-employment and property income are combined when assessing the threshold. For example, if you earn £28,000 from freelancing and £25,000 from rental property, your combined gross income of £53,000 exceeds the £50,000 threshold, and you must comply from April 2026.
Are limited companies affected by MTD for Income Tax?
No. MTD for Income Tax applies to sole traders and landlords, not limited companies. Limited companies already report through Corporation Tax, which has a separate MTD timeline. If you are a company director paid via PAYE and dividends, your director salary is not subject to MTD for Income Tax.
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