MTD-IT 2026 · Spoke · Back to pillar
MTD Income Tax threshold: when does Making Tax Digital apply to you?
Source: gov.uk — Check if you need to use Making Tax Digital for Income Tax.
Written by Mehmood Rajoka
Managing Partner, RR Accountants · IFA-supervised practice
Short answer
MTD Income Tax applies to UK landlords and sole traders with gross income above £50,000 per year from April 2026, above £30,000 from April 2027, and above £20,000 from April 2028. 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. See gov.uk.
MTD Income Tax rollout schedule
| Start date | Who must comply | Gross threshold |
|---|---|---|
| April 2026 ✓ Live now | Landlords + sole traders | Above £50,000 |
| April 2027 | Landlords + sole traders | Above £30,000 |
| April 2028 | Landlords + sole traders | Above £20,000 |
| No date announced | Below £20,000 | Not yet phased in |
Source: gov.uk — Making Tax Digital eligibility and LITRG — Making Tax Digital for Income Tax.
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, and from April 2028 it drops again to £20,000. Below £20,000, no phase-in date has been announced. See gov.uk/guidance/check-if-youre-eligible-for-making-tax-digital-for-income-tax.
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.
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.
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 at gov.uk/guidance/sign-up-your-business-for-making-tax-digital-for-income-tax. 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.
Related guides in the MTD-IT series
The pillar plus six companion spokes that go deeper than this threshold guide.
MTD for Income Tax — pillar guide
The full 2026 overview of who's in scope, what changes, and how to prepare.
MTD quarterly submissions
What you actually file each quarter — the cumulative-update cycle.
MTD penalties and the soft landing
Points system, the £200 threshold, and what the grace period does not cover.
MTD for landlords
Gross rent, joint ownership, what counts as your share.
MTD for sole traders
Self-employment rules, side-income combinations, partnership status.
Choosing MTD-compatible software
What HMRC requires, bridging vs all-in-one, what to weigh.
How to prepare before your start date
A practical do-it-now checklist.
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See LandlordFlowAbout the author
Mehmood Rajoka, Managing Partner, RR Accountants
Managing Partner at RR Accountants — a UK practice supervised by the Institute of Financial Accountants. Specialist focus on UK landlord and property tax, MTD for Income Tax, and limited-company advisory. RR Accountants serves clients across nine physical UK offices plus Glasgow service area.
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This guide is general information about UK tax rules. It is not personal tax advice. For advice tailored to your situation, speak to a regulated UK accountant. All figures verified against gov.uk and ICAEW as of . MTD rules continue to evolve — re-check primary sources before acting.