The three thresholds
Whether MTD applies to you depends on your qualifying income on the tax return for a particular year. The threshold falls each year:
| You start on | Qualifying income over | On your tax return for |
|---|---|---|
| 6 April 2026 | £50,000 | 2024–25 (6 April 2024 to 5 April 2025) |
| 6 April 2027 | £30,000 | 2025–26 (6 April 2025 to 5 April 2026) |
| 6 April 2028 | £20,000 | 2026–27 (6 April 2026 to 5 April 2027) |
"Over" means more than the figure: exactly £30,000 is not over £30,000.
What counts as qualifying income
Qualifying income is your total income from self-employment and property before expenses: your turnover and your rents, not your profit.
- Self-employment turnover
- UK property income
- Foreign property income (if you're UK resident)
- Your share of income from jointly owned property
- Partnership income reported to you personally (for example carried interest)
- Wages from a job (PAYE)
- Your share of partnership profits
- Dividends and savings interest
- State and private pensions
- Income from UK REITs or PAIFs
- Qualifying care relief
- Basis period reform transition profits
A worked example
Sam earns £27,000 from self-employment and £25,000 in rent in 2024–25, £52,000 in total before expenses. Sam's profit is much lower once costs come off, but that doesn't matter: qualifying income is over £50,000, so MTD applies to Sam from 6 April 2026.
If Sam also had a part-time job paying £15,000, that wouldn't change anything. Employment income isn't qualifying income.
Jointly owned property
If you own a property with someone else, your share of the property income counts towards your qualifying income. HMRC has separate rules for people who only receive their share of the income after expenses have been deducted. Check HMRC's guidance on working out qualifying income if that's you.
Once you're in, you usually stay in
If your income later drops, you don't drop out straight away. You can stop using MTD if:
- your qualifying income is below the threshold for 3 tax years in a row (you don't have to wait for the third year's tax return),
- you amend the previous year's tax return and your qualifying income falls below the threshold,
- you become exempt, or
- all your self-employment and property income stops.
When you can opt out, the option appears in your HMRC online account. You still send a Self Assessment tax return for that year.
How you'll join
- You can sign up yourself on GOV.UK using your Self Assessment sign-in details. You may be asked to prove your identity with a passport or driving licence in a mobile app.
- From September 2026, HMRC began signing up people who should be using MTD but hadn't signed up themselves.
- You can also volunteer before you need to, to get used to it.
Add up your turnover and gross rents for the relevant year. Over the threshold? MTD applies from that April, unless you're exempt.
- GOV.UK: Find out if and when you need to use Making Tax Digital for Income Tax
- GOV.UK: Work out your qualifying income for Making Tax Digital for Income Tax
- GOV.UK: If your circumstances change (Use Making Tax Digital for Income Tax)
- GOV.UK news, 5 October 2026: Sole traders and landlords earning more than £30,000 urged to act now
This guide explains HMRC's published rules without the jargon. It's information, not tax advice, and it was accurate when we checked it on 19 October 2026. For your own situation, check your HMRC online account or speak to an accountant.