Making Tax Digital for Income Tax became mandatory from 6 April 2026 for sole traders and landlords with combined gross income from self-employment and property above £50,000, based on their 2024/25 tax return.
Importantly, this threshold is based on income before expenses are deducted.
The rules will extend further over the next two years:
- From April 2027, MTD will apply where qualifying income exceeds £30,000.
- From April 2028, the threshold will reduce to £20,000.
Those within MTD must maintain digital records and submit quarterly updates to HMRC using compatible software, alongside their end-of-year requirements.
HMRC is now automatically signing up taxpayers
From September 2026, HMRC is beginning to automatically enrol taxpayers it believes should already be within MTD but have not yet registered.
The process will happen in stages and could affect around 294,000 taxpayers. HMRC will contact individuals once they have been signed up.
If you receive an HMRC letter or digital notification, it is important to check it promptly.
You should confirm that HMRC’s information is correct, establish whether MTD applies to you and make sure you have suitable compatible software in place.
If you believe HMRC has made an error or you may qualify for an exemption, this should also be addressed as soon as possible.
If you are unsure whether MTD applies to you, have received an automatic sign-up notification or need help getting your systems ready, please contact Progress Accountants. We can review your position and help make sure you are set up correctly.
