Do I need to use Making Tax Digital? The income thresholds
Whether you need to use Making Tax Digital for Income Tax depends on your qualifying income and the tax return HMRC looks at. Here is how it works, with a worked example.
Last reviewed
What counts as qualifying income?
Qualifying income is your total income from self-employment and property, before expenses. This is sometimes called turnover (HMRC: work out your qualifying income).
- Rent counts in full, before you take off repairs, agent fees, mortgage interest or any other costs.
- If you own a property jointly, only your share of the income counts. HMRC's example is a property with £50,000 of income shared equally, which gives each owner £25,000 of qualifying income.
- If you are UK tax resident, income from property abroad counts as well as UK property.
Some income does not count, including employment (PAYE) income, your share of profit from a partnership, dividends, the State Pension and private pensions (HMRC: work out your qualifying income).
What are the thresholds?
| Qualifying income over | On your tax return for | You start from |
|---|---|---|
| £50,000 | 2024 to 2025 | 6 April 2026 |
| £30,000 | 2025 to 2026 | 6 April 2027 |
| £20,000 | 2026 to 2027 | 6 April 2028 |
Source: HMRC: check if you're eligible.
Which tax return does HMRC look at?
HMRC assesses your qualifying income by checking the Self Assessment tax return you submitted in the previous tax year (HMRC: work out your qualifying income). That means there is a gap of a year between the income and the start date.
For example, your return for the 2024 to 2025 tax year (6 April 2024 to 5 April 2025) was due by 31 January 2026, during the 2025 to 2026 tax year. The income on it decided whether you needed to start on 6 April 2026. In the same way, your 2025 to 2026 return decides whether you start on 6 April 2027 (HMRC: check if you're eligible).
A worked example
Sam is employed and lets two flats on their own. They also own a house jointly with their sister and the rent is shared equally. On their tax return for 2025 to 2026, Sam has:
| Income | Counts |
|---|---|
| Rent from the two flats, before expenses | £24,000 |
| Sam's half of £16,000 rent on the shared house | £8,000 |
| Salary from their job (PAYE) | £0 |
| Qualifying income | £32,000 |
Sam spent £9,000 on repairs, agent fees and mortgage interest, but that does not reduce qualifying income. £32,000 is over the £30,000 threshold, so Sam would need to use Making Tax Digital for Income Tax from 6 April 2027, unless an exemption applies.
This example is illustrative. HMRC's own example adds £25,000 of rental income and £27,000 of self-employment income to get qualifying income of £52,000 (HMRC: work out your qualifying income).
What if I am under the threshold?
If your qualifying income is £20,000 or less, you do not need to use Making Tax Digital for Income Tax (HMRC: find out if you can get an exemption). You carry on filing your Self Assessment tax return as now.
Can I get an exemption?
Some people are exempt automatically and others can apply, for example if it is not reasonable for them to use compatible software because of age, health, disability or a lack of internet access. Some groups are exempt only for a limited time. HMRC sets out who qualifies and how to apply in find out if you can get an exemption from Making Tax Digital for Income Tax.
What to do next
If you need to start, read Making Tax Digital for landlords: what you need to do and the quarterly update deadlines.