What Making Tax Digital means
Who this guide is for: For sole traders and landlords who need to know whether Making Tax Digital (MTD) for Income Tax applies, and when.
Making Tax Digital (MTD) for Income Tax requires eligible sole traders and landlords to keep digital records and send regular updates using compatible software.
Qualifying income year, threshold and commencement
Keep three ideas separate:
- Qualifying-income year — the earlier tax year HMRC uses to measure gross income.
- Qualifying-income threshold — £50,000.00, £30,000.00 or £20,000.00 depending on the phase.
- Later MTD commencement date — when digital records and quarterly updates must start (for example 6 April 2026 for the first phase).
| Qualifying-income year | Gross qualifying income | MTD commencement |
|---|---|---|
| 2024/25 | Over £50,000.00 | 6 April 2026 (2026/27 phase) |
| 2025/26 | Over £30,000.00 | 6 April 2027 (2027/28 phase) |
| 2026/27 | Over £20,000.00 | 6 April 2028 (2028/29 phase) |
What you will do
- Step 1Digital records
- Step 2Quarterly update 1
- Step 3Quarterly update 2
- Step 4Quarterly update 3
- Step 5Quarterly update 4
- Step 6Year-end declaration
- Multiple businesses and property income can sit inside one MTD journey.
- Exemptions and voluntary early participation exist — check GOV.UK.
- Agents and compatible software can submit on your behalf.
- Strengthen day-to-day evidence with Business Records for Sole Traders and review Cash Basis for Sole Traders if you use cash accounting.
- Return to the Self-employed tax hub for the full sole-trader journey.