MTD Income Tax · Thresholds · Updated May 2026
MTD Income Tax threshold: when does Making Tax Digital apply to you?
Source: gov.uk — Making Tax Digital. All figures [VERIFY] before acting.
Short answer
MTD Income Tax applies to UK landlords and sole traders with gross income above £50,000 per year from April 2026, and above £30,000 from April 2027. Gross means total receipts before any expenses. If you have both rental and self-employment income, they are combined. Properties in a limited company (SPV) are not affected. [VERIFY all figures at gov.uk]
MTD Income Tax rollout schedule [VERIFY]
| Start date | Who must comply | Gross threshold [VERIFY] |
|---|---|---|
| April 2026 ✓ Live now | Landlords + sole traders | Above £50,000 [VERIFY] |
| April 2027 | Landlords + sole traders | Above £30,000 [VERIFY] |
| Not yet mandated | Below £30,000 | Currently exempt [VERIFY] |
Source: gov.uk/making-tax-digital
MTD threshold — FAQs
What is the MTD Income Tax threshold?
From April 2026, MTD Income Tax applies to landlords and self-employed individuals with gross income above £50,000 per year. From April 2027, the threshold drops to £30,000. Below £30,000, the rollout is currently paused. All figures should be verified at gov.uk/topic/business-tax/making-tax-digital before acting. [VERIFY]
Is MTD Income Tax based on profit or gross income?
The MTD threshold is based on gross income — total receipts before deductions or expenses. For landlords, gross income is the total rent received across all properties before any costs. For sole traders, it is total business turnover before expenses. Allowable expenses do not reduce the threshold calculation.
If I have both rental income and self-employment, do the incomes combine?
Yes. If you have both rental income and self-employment income, HMRC adds them together to assess whether you are above the MTD threshold. For example: £30,000 rental income + £25,000 sole-trade income = £55,000 combined gross — above the £50,000 threshold. [VERIFY at gov.uk]
Does MTD Income Tax apply to properties held in a limited company?
No. MTD Income Tax (Self Assessment) applies to personally-held income only. Properties held through a limited company (SPV) are subject to corporation tax rules — which have a separate Making Tax Digital programme. MTD for Corporation Tax has not yet been mandated. [VERIFY current status at gov.uk]
What happens if I'm just below the threshold?
If your gross income is just below £50,000 in 2025/26, you will not be required to use MTD from April 2026. However, you should monitor closely — if income grows above the threshold in a later year, you will need to register. Voluntary registration is also available before you become mandated.
How do I register for MTD Income Tax?
You register via HMRC's online service. Before registering you will need: your National Insurance number, your UTR (Unique Taxpayer Reference), and MTD-compatible software already selected and set up. Registration should happen before your first quarterly deadline. [VERIFY: current registration process at gov.uk/sign-up-for-making-tax-digital-for-income-tax]
Related MTD guides
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