With Making Tax Digital (MTD) for Income Tax approaching, the biggest question for most sole traders and landlords is: Does this actually apply to me?
The answer depends on your qualifying income – your total gross income from self-employment and/or property before any expenses are deducted.
The rollout schedule
HMRC is introducing the changes in phases. Find your bracket below to see when you need to be ready:
April 2026: You must comply if your qualifying income is over £50,000.
April 2027: The threshold drops to include those earning over £30,000.
April 2028: The latest update indicates a further extension for those earning over £20,000.
How to check your status
Review your 2024/25 tax return: Look at your total turnover (not profit). If it's above £50k, you are in the first wave. If you’ve missed signing up for MTD in April this year, make sure to check HMRC if there are any late penalty fees.
Monitor your income: If your earnings fluctuate near the thresholds, you should prepare for the earliest possible date to avoid late-filing penalties.
Watch for HMRC correspondence: While HMRC will likely send letters to those affected, the responsibility to comply remains with you.
What happens if you’re affected?
If you meet the criteria, your tax workflow will shift from a once-a-year task to a continuous digital process:
Ditch the paper: You’ll need to keep digital records of every sale and expense.
Submit quarterly updates: Instead of one big return, you’ll send four smaller digital updates throughout the year.
Use MTD-compatible software: Tools like FreeAgent (which is free for Mettle customers) can automate this by pulling data directly from your bank account.
The silver lining
Even if you aren't mandated yet, moving to digital records early can give you a real-time view of what you owe, helping you budget better and avoid "tax bill shock" in January.
Not sure which income counts toward the threshold?
Read the full eligibility breakdown on the Mettle blog.
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