Do you actually need Making Tax Digital? The income thresholds

Making Tax Digital for Income Tax is being introduced in stages, based on how much you earn. You only have to use it once your income passes a set level, and that level drops over the next few years.

The thresholds

• From 6 April 2026: if your qualifying income is over £50,000.
• From 6 April 2027: if it's over £30,000.
• From 6 April 2028: if it's over £20,000.

What counts as “qualifying income”

This is the part people get wrong. Qualifying income is your gross income from property and self-employment added together, before you take off any expenses. It is turnover, not profit.

So if you collect £28,000 of rent and have £15,000 of self-employed income, your qualifying income is £43,000, even if your actual profit is much lower. Other income, like a salary or savings interest, doesn't count towards this figure.

It's measured per person

The threshold applies to you as an individual. If you own a property jointly, only your share of the rent counts towards your figure. Two people who each own half of a £40,000-a-year property have £20,000 of property income each, not £40,000.

Below the threshold?

If you're under the level that applies to you, you don't need quarterly updates yet. You carry on with a normal Self Assessment return. It's still worth keeping digital records though, because the threshold drops each year and many landlords will be brought in by 2028.

Not sure where you stand? HMRC has an eligibility checker, or speak to an accountant if your situation is complicated.