Who Needs to Comply with MTD ITSA?

Making Tax Digital for Income Tax is being phased in based on how much you earn from self-employment and property. This page explains who is in scope, who is not, and when the mandate applies to you.

The income thresholds

MTD for Income Tax is mandatory for individuals with qualifying income above certain thresholds:

Mandate date	Qualifying income threshold	Based on tax return for
6 April 2026	Over 50,000	2024-25
6 April 2027	Over 30,000	2025-26
6 April 2028	Over 20,000	2026-27

These dates are set in legislation. Approximately 780,000 individuals join in April 2026, with a further 970,000 in April 2027, and around 900,000 more in April 2028.

What counts as “qualifying income”?

Qualifying income is your total gross income from self-employment and property combined, before expenses or tax deductions. It includes:

Self-employment income (all businesses combined)
UK property rental income
Overseas property income (if you are UK-resident or UK-domiciled)

It does not include:

PAYE employment income
Savings interest
Dividends
Pension income
Capital gains
Any other Self Assessment income sources

HMRC uses the qualifying income from your most recently filed tax return before the mandate date to determine whether you are caught.

Who is in scope

You must use MTD for Income Tax if you are:

A sole trader with qualifying income above the threshold
A landlord (UK or overseas property) with qualifying income above the threshold
An individual with both self-employment and property income that together exceed the threshold

The threshold test combines all your qualifying income sources. For example, if you earn 35,000 from self-employment and 20,000 from property, your qualifying income is 55,000 - above the April 2026 threshold.

Who is out of scope

The following are not required to use MTD for Income Tax:

PAYE-only earners - employment income does not count toward the threshold
Individuals below the threshold - if your qualifying income is under the relevant limit
Companies - Corporation Tax is a separate system
Trusts and estates - not in scope for MTD ITSA
Partnerships - not yet included; no date has been set
Lloyd’s underwriters and certain collective investment scheme property income

What if my income fluctuates?

Once you are mandated into MTD, you stay in even if your income drops below the threshold. You can only opt out after three consecutive tax years below the applicable threshold. There is no obligation to opt out - you can continue using MTD voluntarily.

If your income rises above a threshold for the first time, you will be caught from the next mandate date.

Exemptions

You may be exempt from MTD if you:

Cannot use digital tools due to age, disability, health condition, or location (digital exclusion)
Are a practising member of a religious society whose beliefs are incompatible with digital record-keeping
Fall into a category where HMRC cannot provide a digital service

Exemptions must be applied for and approved by HMRC. You can check your eligibility at gov.uk.

If you are an accountant

You need to identify which of your clients are caught by the mandate. The key steps:

Review qualifying income for each client from their most recent filed return
Determine which mandate wave they fall into (April 2026, 2027, or 2028)
Ensure they have digital record-keeping in place before their mandate date
Set up compatible software for quarterly submissions

Remember that qualifying income combines self-employment and property income - a client with modest earnings from both sources may still exceed the threshold.

If you are filing for yourself

Check your qualifying income from your most recent tax return:

Over 50,000? You must comply from April 2026
Over 30,000? You must comply from April 2027
Over 20,000? You must comply from April 2028
Under 20,000? You are not currently required to use MTD, though you can sign up voluntarily

If you are unsure, HMRC will contact you before your mandate date. You can also check using HMRC’s online eligibility tool.

FAQ

What if my income fluctuates around the threshold?

HMRC checks the qualifying income on your most recently filed tax return before the mandate date. If you are above the threshold on that return, you are in scope. Once in, you stay in until you have been below the threshold for three consecutive tax years and choose to opt out.

Are partnerships included?

Not yet. The government has committed to extending MTD to general partnerships in future, but no date has been set. Partnership income does not currently count toward an individual partner’s qualifying income threshold.

Yes. Even if your income is below the threshold, you can sign up voluntarily. This can be useful for getting familiar with the process before it becomes mandatory for you.

What about the 20,000 threshold for April 2028?

The 20,000 threshold was announced at Spring Statement 2025. Legislation is in progress. Individuals below 20,000 remain outside MTD for now.