What if I only started trading this year?

HMRC uses your latest submitted return to check the threshold. In your first year with no return on file, MTD does not apply. You come into scope from the tax year after HMRC has your first return showing you above the threshold.

I have a limited company. Does MTD for Income Tax apply?

No. MTD for Income Tax is for sole traders and landlords. If you trade through a limited company, you pay Corporation Tax and are outside the current MTD for Income Tax rules. MTD for Corporation Tax has been deferred with no firm date.

Does the threshold include VAT?

Yes if you charge it. Qualifying income is your gross turnover including VAT you collect. That is different to how VAT registration thresholds work, so it catches some people out.

I do a bit of self-employment on the side of a PAYE job. Does MTD apply?

Only if your self-employment plus any property income is above the current threshold. Your PAYE salary does not count. If you earn £10,000 self-employed alongside a full-time job, MTD does not apply to you yet.

Does Making Tax Digital Apply to Me?

Step 1: Are you the right type of taxpayer?

MTD for Income Tax applies to individuals who file Self Assessment and have either self-employment or property income. That includes:

Sole traders (any trade, any industry)
CIS subcontractors filing Self Assessment
UK landlords
Overseas landlords with UK rental income

It does not currently apply to limited companies, general partnerships (still to be confirmed) or people whose only self-employment is under £1,000 (the trading allowance).

Step 2: Add up your gross income

Take your latest Self Assessment return and add together:

Total gross self-employment turnover (before expenses)
Total gross UK and overseas property income (before expenses)

That combined number is your qualifying income. Ignore your PAYE salary, dividends, savings interest and pension income — none of those count towards the threshold.

Step 3: Match your income to a start date

Once you have your qualifying income figure, work out when MTD applies to you:

Over £50,000: MTD from 6 April 2026
£30,001 to £50,000: MTD from 6 April 2027
£20,001 to £30,000: expected from April 2028
£20,000 or under: not in scope yet

Step 4: If MTD applies, what next?

You need three things in place by your start date:

MTD-compatible software (Fixxa is built to keep the digital records MTD requires)
A Government Gateway account signed up for MTD for Income Tax
A routine for filing quarterly updates and the Final Declaration each year

Even if you are in the £20,000-and-under group, it is worth starting to keep digital records now. HMRC has signalled the threshold will come down over time.

Does Making Tax Digital apply to me?

Step 1: Are you the right type of taxpayer?

Step 2: Add up your gross income

Step 3: Match your income to a start date

Step 4: If MTD applies, what next?

Frequently asked questions

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