Who needs Making Tax Digital, and when
| If your income before expenses was more than | In the tax year | You start on |
|---|---|---|
| £50,000 | 2024 to 2025 | 6 April 2026 |
| £30,000 | 2025 to 2026 | 6 April 2027 |
| £20,000 | 2026 to 2027 | 6 April 2028 |
It applies to people who are self-employed as sole traders, landlords, or both, and fill in a Self Assessment tax return.
What counts as your income
- Counts: self-employed takings and rent, added together, before expenses. If you own a property jointly, only your share.
- Doesn’t count: wages from a job taxed through PAYE, dividends, the State Pension and private pensions, and your share of a partnership’s profits.
So a landlord who takes £32,000 rent but spends £20,000 on the mortgage and repairs is still over £30,000.
What you’ll need to do
- Keep digital records of your income and expenses, in software or a spreadsheet linked to software.
- Send a short update every 3 months. They’re due on 7 August, 7 November, 7 February and 7 May.
- File your tax return through the software by 31 January, as now.
The updates are summaries of income and expenses. You don’t pay tax each quarter because of them.
Need software?
HMRC doesn’t provide it. Its list shows which products work with Making Tax Digital, including ones that link to a spreadsheet. Some are free for simple tax affairs.
Find Making Tax Digital softwareWorked example
Sue does freelance bookkeeping and rents out a flat she owns with her brother.
| Freelance takings, 2025 to 2026 | £18,000 |
|---|---|
| Her half of £26,000 rent | £13,000 |
| Qualifying income | £31,000 |
That’s over £30,000, so Sue starts on 6 April 2027. Her first quarterly update is due on 7 August 2027.
Questions
Is it based on profit or turnover?
Turnover. HMRC adds up your self-employed and rental income before expenses.
Will HMRC tell me?
HMRC usually writes to you if your tax return shows you need to sign up, but you’re expected to check for yourself.
Can anyone be exempt?
Some people are, for example if it isn’t practical for you to use computers or the internet. You have to apply to HMRC.
Do I need an accountant?
No, but many people use one. If you do, ask which software they use so they can send your updates for you.