Making Tax Digital for Income Tax: who must join, when and how to check

Making Tax Digital for Income Tax Self Assessment, usually shortened to MTD ITSA, is the biggest change to the way sole traders and landlords report to HMRC in decades. Instead of one annual return, you keep digital records, send quarterly updates and finish with a final declaration. It is being phased in by income level, which means the first thing to work out is whether and when it applies to you. This guide explains the thresholds, how HMRC decides which year counts and how to check your own position.

The phased start dates

MTD ITSA is mandatory in three stages, based on qualifying income.

Start date	Qualifying income threshold
6 April 2026	Over £50,000
6 April 2027	Over £30,000
6 April 2028	Over £20,000

Dates and thresholds are those currently set out by the government. Check GOV.UK for any changes before relying on them, because policy details have moved before.

What counts as qualifying income

Qualifying income is the gross (before expenses) total of:

• Your income from self-employment (turnover, not profit), and
• Your income from property (rents received before costs).

It does not include salary, dividends, pensions or savings interest. It is the sum across all your trades and properties, so someone with a £30,000 consultancy and £25,000 of rent has £55,000 of qualifying income.

For a partnership, the rules apply to the individual partners, and general partners are expected to join later than sole traders. Check current guidance if you are in a partnership.

Which year decides?

HMRC looks at your Self Assessment return from two tax years before the start date.

• For 6 April 2026, it uses your 2024/25 return, filed by 31 January 2026.
• For 6 April 2027, it uses your 2025/26 return.
• For 6 April 2028, it uses your 2026/27 return.

If the qualifying income on that return is over the threshold, you are required to join from the start of the next tax year. HMRC writes to people it believes are affected, but the duty is yours. If you did not file a return for that year, or you started trading later, the rules differ.

Example

Priya is a self-employed designer. Her turnover was £34,000 in 2025/26 and £48,000 in 2026/27, and she has no rental income.

• April 2026: not required, since her 2024/25 qualifying income was under £50,000.
• April 2027: her 2025/26 return shows £34,000, which is over £30,000, so she must join from 6 April 2027.
• April 2028: she is already in.

Note that her 2026/27 growth does not affect the 2027 start, but a good year only moves the date forward, not back.

Once you are in, you stay in

If you join and your income later falls below the threshold, you generally remain in the system until you formally leave under HMRC's rules. Check the conditions before assuming you can go back to a paper-style return.

Who is not required to join

• Those with qualifying income below the relevant threshold.
• Those who are digitally excluded, for example because of disability, age, location or other reasons they cannot use digital tools. You apply to HMRC for an exemption. See MTD ITSA exemptions and digital exclusion.
• Those in certain legal situations, such as insolvency.
• Those with no National Insurance number for a religious reason.
• People who do not have qualifying income, such as pure employees, pensioners with only pension income, and company directors for their company income (company profit is not self-employment income, though other self-employment still counts).
• Limited companies, which are not within MTD ITSA at all. They use other reporting routes and, for VAT, MTD for VAT.

What you will have to do

1. Keep digital records of income and expenses in compatible software or spreadsheets with bridging tools. See what digital records to keep.
2. Send quarterly updates summarising income and expenses for each period. See quarterly updates and how they work.
3. Complete a final declaration after the end of the tax year to confirm your total income, claim reliefs and settle the tax. See final declaration and year end under MTD.
4. Pay your tax on the normal dates, with the usual payments on account system. See payments on account explained.

How to check whether it applies to you

1. Find your 2024/25 Self Assessment return, or the year relevant to your start date.
2. Add up gross self-employment income (turnover box on each self-employment page) and gross property income (before expenses).
3. Compare the total with the threshold for your intended start date.
4. If you are close, check whether you can plan to join voluntarily to get used to it.
5. Use our Making Tax Digital checker for a quick answer.

Edge cases worth knowing

New businesses. If you started trading after the relevant comparison year, HMRC will not have a return showing your income, so the rules for new traders and the timing of their first return matter. If you expect to exceed a threshold soon after starting, it is sensible to prepare early.

Mixed income. Someone with £28,000 of self-employment and £25,000 of rents has £53,000 of qualifying income. A lot of people overlook the second figure.

Spouses with different incomes. Each person is judged separately. A couple can therefore start in different years, and one of them may be in MTD while the other is not, even if they run the same property portfolio.

Falling income. If your income dropped below the threshold in the comparison year, you may avoid the start date, but check carefully, because HMRC uses the return as filed.

Late or amended returns. HMRC bases its decision on the information it holds. If you amend a return after it has assessed your position, tell them.

Gross, not net. One more time, because it is the commonest error: use turnover, not profit.

Voluntary joining

You can often join earlier than required if your software supports it, and some people choose to. The benefits are a smoother transition, a clearer running tax estimate and time to fix any teething problems. The costs are the quarterly update workload and potentially a software subscription earlier than necessary. If your income is just below the next threshold, joining early is worth considering.

Preparing

The time to prepare is before the start date, not after. Start with your records, then your software. Practical steps are in our MTD ITSA preparation checklist. Choose software with our guide to compatible software.

Common mistakes

1. Assuming the threshold is based on profit. It is based on gross income.
2. Forgetting property income when adding up.
3. Using the wrong tax year.
4. Waiting for a letter from HMRC. Some people do not get one.
5. Assuming a limited company director is automatically included.
6. Not planning for the first quarterly update.
7. Thinking you must pay tax quarterly. Tax payment dates are unchanged.

Getting it handled

Our Making Tax Digital for Income Tax bookkeeping service keeps your records digital and your quarterly updates ready, from a flat £15 an hour. See also our full MTD for Income Tax guide, and use the instant quote.

Frequently asked questions

Does MTD ITSA apply to limited companies?

No. It applies to individuals with self-employment or property income. Companies are outside it, although VAT-registered companies follow MTD for VAT.

Is the threshold based on profit or turnover?

Turnover. It is gross self-employment income plus gross property income, before any expenses.

What if I am over the threshold but have never had a return?

If you should have been in Self Assessment, register. HMRC applies the rules using the information it holds, so tell it if your circumstances change.

Can I join MTD ITSA early?

Often yes, if your software supports it. Check the conditions on GOV.UK and with your software provider.

Can you tell me when I must join?

Yes. Ask for a free health check, or try our Making Tax Digital checker.