Making Tax Digital for Income Tax (MTD ITSA) becomes mandatory from April 2026 - but it doesn't apply to everyone. Whether it applies to you depends entirely on one number: your qualifying income. Use the checker below to find out instantly, then read on for the full explanation.
What is "qualifying income"?
HMRC doesn't look at your total income when deciding if MTD applies to you. It only looks at two specific sources:
- Self-employment income - your gross turnover as a sole trader, freelancer, or contractor. This is revenue before expenses, not profit.
- UK property rental income - gross rent received from residential or commercial property you let out, before any expenses.
Everything else is excluded from the calculation. That means your PAYE salary, dividends, savings interest, pension income, and capital gains all have zero impact on whether you need to file MTD - regardless of how large they are.
Example: You earn £90,000 from your job (PAYE) and £12,000 rent from a buy-to-let. Your qualifying income is £12,000 - not £102,000. You're not in scope for MTD, even though your total income is well over £50,000.
What are the MTD income thresholds?
MTD for Income Tax is being rolled out in stages. The threshold drops over three years:
| Tax year | Qualifying income over | First deadline | Status |
|---|---|---|---|
| 2026-27 | £50,000 | 7 August 2026 | Mandatory |
| 2027-28 | £30,000 | 7 August 2027 | Confirmed |
| 2028-29 | £20,000 | 7 August 2028 | Proposed |
The £50,000 and £30,000 thresholds are confirmed in law. The £20,000 threshold has been announced but is not yet legislated - it's expected to be confirmed by the end of 2025.
Important: The threshold is based on the tax year two years before. For the 2026-27 mandate, HMRC will use your 2024-25 income to assess eligibility. If you were over £50,000 in 2024-25, you're in for 2026-27 regardless of what you earn this year.
I have multiple income sources - how does it work?
If you have more than one qualifying income source, HMRC adds them together. For example:
- Two self-employment businesses: the turnover from both is combined
- Self-employment plus property: both are added together
- Multiple rental properties: all rental income combined counts as one property source
Example: You're a freelance designer earning £35,000 and also rent out a flat for £18,000/year. Your qualifying income is £53,000 - over the £50,000 threshold. MTD applies to you from April 2026, and you'll need software to submit quarterly updates for both income sources.
What if I'm not in scope yet but will be when the threshold drops?
If you're between £20,000 and £50,000 qualifying income, you're not yet mandated but you're in the window. The £30,000 threshold kicks in for the 2027-28 tax year (first deadline August 2027) and the proposed £20,000 threshold would follow in 2028-29.
It's worth getting familiar with MTD software now rather than scrambling when your threshold arrives. Most software offers free tiers or free trials - there's no cost to getting set up early.
Note for landlords: If you own property jointly, each owner's share of rental income counts individually toward their own threshold. A property generating £70,000 rent split 50/50 means each owner has £35,000 qualifying income - over the 2027 threshold but under 2026's £50,000.
Do I still need to file Self Assessment if I'm not in scope for MTD?
Yes - MTD doesn't replace Self Assessment for people outside its scope. If you have rental income, self-employment income, dividends over £500, savings interest above your Personal Savings Allowance, or capital gains, you still need to file an annual Self Assessment return. MTD is a separate, additional obligation that eventually replaces the Self Assessment return for those in scope.
Frequently asked questions
In scope? AffordableMTD has you covered.
Import your spreadsheet, submit your quarterly updates to HMRC. Free for the 2026-27 tax year, then just £19.99/year - the cheapest MTD software in the UK.
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