Who MTD Affects

Key facts

All VAT-registered businesses are already within MTD for VAT, regardless of turnover.
MTD for Income Tax applies from April 2026 to self-employed people and landlords with income over £50,000.
From April 2027, the ITSA threshold drops to £30,000.
Income from self-employment and property is combined to determine whether you exceed the threshold.
General partnerships will be brought into MTD for ITSA, but the date is to be confirmed.

Who Is Affected by Making Tax Digital?

Making Tax Digital affects different taxpayers at different times. The programme has been rolled out in phases, starting with VAT and expanding to Income Tax. Below is a clear breakdown of who is affected and when.^[2]

VAT-Registered Businesses

If you are registered for VAT, MTD already applies to you. Since April 2022, all VAT-registered businesses must:^[3]

Keep their VAT records digitally using MTD-compatible software
File VAT returns through their software (not through HMRC’s online portal)
Maintain digital links between all parts of their record-keeping system

This applies regardless of your turnover — whether you’re above or below the £90,000 VAT registration threshold, and whether you registered voluntarily. For more detail, see MTD for VAT Overview.

Self-Employed Individuals

MTD for Income Tax Self Assessment (ITSA) will apply to self-employed individuals (sole traders) based on their qualifying income:^[1]

Start Date	Who Must Comply	Qualifying Income Threshold
6 April 2026	Self-employed individuals	Over £50,000
6 April 2027	Self-employed individuals	Over £30,000
To be confirmed	Self-employed individuals	Below £30,000

Qualifying income is your gross income from self-employment and/or property, before deducting expenses, losses, or capital allowances. It is not your profit.^[4]

Landlords

Landlords receiving property income are treated the same way as self-employed individuals under MTD for ITSA. The same thresholds and dates apply:^[1]

From April 2026: landlords with gross property income over £50,000
From April 2027: landlords with gross property income over £30,000

If you have both self-employment income and property income, you add them together. For example, if you earn £30,000 from self-employment and £25,000 from rental properties, your combined qualifying income is £55,000 — above the £50,000 threshold for April 2026. Those in scope will need to file quarterly updates through HMRC-recognised software.

Partnerships

HMRC has confirmed that general partnerships (where all partners are individuals) will be brought into MTD for ITSA. However, the start date has not been confirmed and is expected to follow the phased rollout for individuals.^[1]

Key points for partnerships:

Each partner will need to use MTD-compatible software for their share of partnership income
The partnership itself will need to file quarterly updates
Limited liability partnerships (LLPs) and partnerships with corporate partners are expected to follow later

Limited Companies

Limited companies are not yet required to use MTD for Corporation Tax. However:

If the company is VAT-registered, it must already comply with MTD for VAT
HMRC intends to extend MTD to Corporation Tax in future, but no mandate date has been set
A pilot programme is expected before any requirements take effect

Who Is Exempt from MTD?

Certain groups are exempt or not yet within scope:^[2]

Self-employed and landlords below £30,000 — not yet mandated (date TBC)
Digitally excluded — those unable to use software due to age, disability, remoteness, or religious reasons may apply for an exemption
Trustees and estates — not currently within scope of MTD for ITSA
Non-UK residents — those with no UK self-employment or property income
Foster carers using qualifying care relief — exempt where their entire income is covered by the relief

Tip: If you think you may qualify for a digital exclusion exemption, contact HMRC before the mandate date. You will need to demonstrate that you cannot use digital tools, not simply that you prefer not to.

How to Prepare

If MTD is coming for you, here is what to do now:

Work out your qualifying income — add together your gross self-employment and property income to see which threshold applies
Choose MTD-compatible software — see our guide or try GoFile free
Start keeping digital records — move from paper or spreadsheets to software before the mandate
Consider joining the pilot — HMRC’s voluntary ITSA pilot lets you test the system early
Talk to your accountant — discuss how MTD will change your reporting workflow

Frequently Asked Questions

Does MTD apply to sole traders?

Yes. If you are a sole trader with qualifying income over £50,000 (gross, before expenses), MTD for Income Tax will apply to you from April 2026. From April 2027, the threshold drops to £30,000.

Does MTD apply to landlords?

Yes. Landlords with gross property income over £50,000 (or combined self-employment and property income over £50,000) will need to comply from April 2026, dropping to £30,000 from April 2027.

Are limited companies affected by MTD?

Limited companies are not yet required to use MTD for Corporation Tax. However, if a company is VAT-registered, it must already comply with MTD for VAT. MTD for Corporation Tax may be introduced in future, but no date has been set.

What if my income fluctuates above and below the threshold?

HMRC will use your qualifying income for the tax year to determine whether you meet the threshold. If your income is above the threshold in the relevant year, you will need to comply. If it falls below, you may be able to leave MTD, but you should check the specific rules in force at the time.

Sources

Making Tax Digital for Income Tax Self Assessment — GOV.UK
Overview of Making Tax Digital — GOV.UK
Making Tax Digital for VAT — GOV.UK
Making Tax Digital for Income Tax – stakeholder communications pack — GOV.UK