Do I need to use Making Tax Digital for Income Tax?

Making Tax Digital (MTD) for Income Tax is HMRC's new way for sole traders and landlords to do Self Assessment. You keep digital records, send quarterly updates using compatible software, and submit your tax return through that software. It started on 6 April 2026 and is being brought in over three years, depending on how much you earn.

The short answer

You need to use MTD for Income Tax if all of these apply:

1. you're a sole trader or a landlord registered for Self Assessment
2. you get income from self-employment or property, or both
3. your qualifying income is over the threshold for the relevant tax year (see below)

If all three apply, you're in MTD unless you're exempt (see below). Having an accountant doesn't take you out of MTD; it just means they can do the work for you.

The thresholds and start dates

If your qualifying income is £20,000 or less, you're automatically exempt.

HMRC checks your Self Assessment return each year. If your income is over a threshold, it writes to tell you that you need to start MTD from the next tax year. If you don't get a letter, it's still your responsibility to check and sign up.

You still file your normal Self Assessment return for the tax year before you start MTD. For example, if you started in April 2026, your 2025-26 return is still due by 31 January 2027 in the usual way.

How to work out your qualifying income

Qualifying income is your total self-employment and property income before expenses, which is your turnover or gross rent. It's based on the tax return you submitted for the earlier tax year in the table above.

It counts:

• sales or fees from every self-employment you have
• gross rent from UK property and, if you're UK resident, foreign property
• your share of rent from a jointly owned property

It doesn't count:

• employment (PAYE) income
• your share of profit from a partnership as an individual partner
• dividends, including from your own company
• State Pension and private pensions

Examples (from HMRC's guidance)

• Mixed income: £25,000 rent plus £27,000 self-employment income gives qualifying income of £52,000. That's over £50,000, so MTD applied from April 2026.
• Joint property: you and your sibling own a property that brings in £50,000 of rent, split equally, and you have no other self-employment income. Your qualifying income is £25,000.
• A salary doesn't count: someone earning £60,000 from employment with £15,000 of gross rent has qualifying income of £15,000. That's under £20,000, so they're exempt. (This example is ours, applying HMRC's rule that PAYE income is excluded.)

Some special cases

• New sole traders: if you traded for only part of the year, HMRC annualises your income (for example, it doubles six months' turnover). Landlords need to annualise property income themselves.
• Joint property where you only see the net figure: if you only get told your share after expenses, HMRC uses that figure for qualifying income.
• Non-UK residents: only UK property income and self-employment income declared on your UK return count. Foreign income that isn't on your UK return doesn't.
• If all your self-employment and property income stopped before 6 April 2026, you don't need MTD, but you must tell HMRC (or HMRC may sign you up using the information it holds) and still file your return.

Who is exempt

HMRC treats exemptions in two ways: automatic (you don't need to do anything) and ones you apply for.

Automatic, permanent unless your circumstances change:

• qualifying income of £20,000 or less
• no National Insurance number before the start of the tax year
• certain roles, such as trustees filing an SA900 trust return, non-resident companies filing an SA700, and personal representatives of someone who has died (your own income may still be in scope)
• other cases flagged on your 2024-25 return, such as a Lloyd's member (SA103L), or someone not physically or mentally capable of providing information to HMRC who has a power of attorney or deputy in place

Automatic until at least April 2027, if your 2024-25 return included:

• averaging relief on the SA103 page (farmers, market gardeners, creative artists)
• qualifying care relief (for example foster or kinship carers)
• the SA107 trusts page
• the SA109 residence page

Automatic beyond April 2027 for ministers of religion (SA102M), Lloyd's members, and people receiving or transferring Married Couple's Allowance or Blind Person's Allowance. HMRC will set a later timeline for these.

You apply for:

• digitally excluded: it isn't reasonable for you to use software. Examples are age, health or disability; religious beliefs that are incompatible with digital communication; or no internet access at home or work because of where you are. HMRC will not accept "I used paper before", "I'm not familiar with software", "I only have a few records" or "it costs time or money" as the only reason.
• the exemptions above if your 2024-25 return didn't show them but you reasonably expect your 2025-26 or 2026-27 return to

To apply, phone or write to HMRC (Self Assessment: general enquiries). HMRC aims to reply within 28 days.

Partnerships don't need to use MTD for Income Tax yet. HMRC will announce a timeline later.

"I have an accountant. Do I still need MTD?"

Yes. Having an accountant doesn't exempt you. What changes is who does the work. If your accountant or agent uses compatible software to keep your digital records and send your submissions, they meet the MTD requirements on your behalf. HMRC points out that you may then not need to apply for a digitally excluded exemption, even if you don't use computers yourself.

"Is MTD for Income Tax mandatory? Will it be delayed?"

It's mandatory for anyone over the threshold who isn't exempt, and it started on 6 April 2026 for qualifying income over £50,000. The next stages (£30,000 from April 2027 and £20,000 from April 2028) are set out in HMRC's guidance.

HMRC letters and automatic sign-up

From September 2026, HMRC started signing up people who should be using MTD for 2026-27 but hadn't signed up themselves (based on qualifying income over £50,000 in 2024-25). If you get that letter, follow HMRC's steps: check your income sources, get software, catch up your records from 6 April 2026 and send any overdue quarterly update. Our 7 November deadline guide covers this.

If you think you shouldn't be in MTD, contact HMRC.

If you're in: what to do next

1. Choose compatible software. HMRC doesn't provide any. Its online software finder lists recognised products, including free ones. You can keep using spreadsheets if you add bridging software.
2. Sign up using your Self Assessment sign-in details (or ask your agent to sign you up). You need to be registered for Self Assessment and to have filed a tax return in the last 2 years.
3. Create digital records from 6 April (or 1 April if you use calendar update periods). Each record needs the amount, the date and the category. Keep your original receipts, invoices and statements.
4. Send quarterly updates by 7 August, 7 November, 7 February and 7 May, and submit your tax return through your software by 31 January. See all MTD deadlines for 2026-27.

Volunteering early is allowed too. If you'll be in from April 2027, you can sign up for the current tax year or the next one to get used to it.

Quick check

Answer five questions in our MTD eligibility checker to see if and when MTD applies to you and what to do next. For an official answer, use HMRC's tool on Find out if and when you need to use Making Tax Digital for Income Tax. It also checks exemptions.

How AATAX fits in

AATAX is HMRC-recognised MTD for Income Tax software (reference D6Q7XM). You don't need bookkeeping software: upload bank statements, receipts or spreadsheets, check what AATAX reads, then send your quarterly updates and tax return.

• Sole traders and landlords: free, with no card needed. Get started free
• Accountants: from £99 a year (ex VAT) for up to 20 clients, with unlimited users, and free for your first 3 clients for 12 months. See AATAX for agents

Sources (GOV.UK, checked 10 October 2026)

• 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
• Apply for an exemption from Making Tax Digital for Income Tax
• Use Making Tax Digital for Income Tax: Before you use this guide
• Sign up for Making Tax Digital for Income Tax
• Choose the right software for Making Tax Digital for Income Tax
• Check what to do if HMRC has signed you up for Making Tax Digital for Income Tax

This page is general guidance, not tax advice. If you're unsure how the rules apply to you, speak to an accountant or contact HMRC.