- The test uses qualifying income, not the profit left after expenses.
- The first mandatory group started on 6 April 2026; the next starts on 6 April 2027.
- Prepare software, records and responsibilities together. Buying software alone does not complete the process.
Who needs to use MTD for Income Tax?
HMRC is introducing the requirements in stages. Under the published timetable, qualifying income above £50,000 in 2024/25 brought an April 2026 start. Income above £30,000 in 2025/26 brings an April 2027 start, and above £20,000 in 2026/27 an April 2028 start. Check HMRC’s eligibility tool for exemptions and your circumstances.
Qualifying income broadly combines gross self-employment and property income before expenses. It is different from taxable profit and from the VAT registration test. Having two income sources below a threshold individually does not necessarily put you below it when they are combined.
| Qualifying income in | Above | Start date |
|---|---|---|
| 2024/25 | £50,000 | 6 April 2026 |
| 2025/26 | £30,000 | 6 April 2027 |
| 2026/27 | £20,000 | 6 April 2028 |
What changes in your everyday records?
You need a reliable flow from invoices, receipts and bank transactions into compatible software, together with the required updates to HMRC. Quarterly updates do not mean every payment deadline becomes quarterly. Avoid confusing the reporting timetable with when you pay tax.
Before changing tools, look at how records arrive today. A separate business bank account, a receipt routine and a weekly reconciliation often solve more problems than a complicated software setup. If a letting agent provides statements, agree how their figures enter the records without counting rent twice.
A preparation checklist you can actually use
Begin with the most recent filed return and the income figures behind it. Then work through the following with whoever prepares your accounts.
- Check your start date and any exemption using HMRC’s tool.
- List every sole-trade and property income source, including jointly owned property.
- Agree compatible software and who has access to each business.
- Choose who captures transactions, checks them and submits each update.
- Bring missing transactions and opening balances up to date.
- Set reminders for reporting deadlines and review the first submission together.
Already required to use MTD but not signed up?
If the April 2026 phase applies and you have not started, do not wait for the next annual filing deadline. Confirm the position with HMRC and arrange help with registration and outstanding reporting. A missing reminder letter does not, by itself, remove your responsibility.
Keep the discussion practical: which records are missing, which reports are outstanding and what can be corrected now? Our self-employed accounting service can help connect the digital records with your annual tax work.
What to bring to an MTD conversation
Bring your latest tax return, a breakdown of gross income, information about jointly owned property, your current software and details of who manages the records. These establish the starting point more quickly than a list of apps you are considering.
If you are also watching the VAT taxable-turnover threshold, track it separately. Both regimes use income information, but their rules and measurement periods differ.
Questions about this topic
Does MTD apply to limited company Corporation Tax?
This article concerns Income Tax for sole traders and landlords. Do not apply its thresholds to company Corporation Tax or assume it replaces MTD for VAT.
Do I still need to budget for January tax?
Yes. Digital reporting does not remove tax payment obligations. Confirm your own payments and any payments on account with your adviser.
Sources & further reading
General information for UK readers, updated 3 November 2026. Examples are illustrative. Tax treatment depends on the facts and current rules; seek advice before making a decision.