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Do you actually have to use Making Tax Digital? The income thresholds

Whether you need MTD comes down to one number, your qualifying income, and the date it applies. Here are the thresholds and how the income is measured.

Do you actually have to use Making Tax Digital? The income thresholds

You only have to use Making Tax Digital for Income Tax once your qualifying income passes a set level, and that level drops over the next few years:

  • From 6 April 2026: qualifying income over £50,000.
  • From 6 April 2027: over £30,000.
  • From 6 April 2028: over £20,000.

HMRC decides whether you’re over the Making Tax Digital threshold using the qualifying income on a Self Assessment return you’ve already filed, for the tax year that ended a year before the start date. For the April 2026 start, that’s your 2024 to 2025 return. So you’re not caught out mid-year. HMRC expects to write to you, but the requirement applies even if a letter doesn’t arrive.

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’s turnover, not profit. So £28,000 of rent plus £15,000 of self-employed income is £43,000 of qualifying income, even if your actual profit is far lower. A salary, pension or savings interest doesn’t count towards this figure.

A British high street with flats above the shops

It’s measured per person

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

Below the threshold?

If you’re under the level that applies to you, you don’t need quarterly updates yet. Carry on with a normal Self Assessment return. It’s still worth keeping digital records, because the threshold drops each year and many landlords will be brought in by 2028. You can confirm your position with HMRC’s eligibility checker.

New to all of this? Start with what Making Tax Digital is, and if you’re close to the line, Quarterwise is free for a single property so you can keep tidy records at no cost.

If your income falls or you sell up

A dip below the threshold doesn’t take you out straight away. HMRC only lets you leave once your qualifying income has stayed under the level for three tax years in a row. The exception is when your qualifying income stops altogether. If you sell your only rental property and have no self-employment income, or close your business and have no rental income, tell HMRC and you can stop using Making Tax Digital. If any property or self-employment income carries on, however small, the three-year rule still applies.

If you can’t use software

If it isn’t reasonably practical for you to keep digital records, for example because of your age, a disability or where you live, you can apply to HMRC for an exemption from Making Tax Digital.

Common questions

Is the threshold based on income before or after expenses?
Before. Qualifying income is your gross rental and self-employment turnover, added together, before any expenses.
Does my salary or pension count towards the threshold?
No. Only property and self-employment income count towards the qualifying-income figure. Employment, pension, savings and dividend income don’t, though you still report them in the normal way.
What if I own a property jointly?
The threshold is measured on your share only. If you own half a property, only half of its rent counts towards your figure.
I have just started letting a property or working for myself. When does MTD apply?
Not straight away. The new income first goes on a normal Self Assessment return. If that return takes your qualifying income over the threshold, MTD applies from the tax year HMRC sets, not from the day you started.
Do I need an accountant to use Making Tax Digital?
No. You can keep your records and send your updates yourself in software recognised by HMRC. An accountant can do it for you if you prefer, or check your figures at year end.

Last updated 1 October 2026. Quarterwise is software, not a tax adviser — if you’re unsure how the rules apply to you, check with HMRC or a qualified accountant.

Related guides

What is Making Tax Digital, and what does it mean for landlords?Making Tax Digital is more frequent, not more complicated. Here is exactly what changes for landlords, and what stays the same.Every Making Tax Digital deadline for landlords and the self-employedFour quarterly updates and one tax return. Here are all the dates, the calendar-quarter option, and how the penalty points work.Free Making Tax Digital software for a single propertyIf you let one property, you can keep digital records and file to HMRC for free. Here is exactly what’s included, and where the paid plan begins.

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