Making Tax Digital for Income Tax: who must join in 2026, 2027 and 2028

Who it applies to, and when

Making Tax Digital (MTD) for Income Tax is being phased in for sole traders and landlords. HMRC's thresholds are: more than £50,000 of qualifying income in the 2024 to 2025 tax year means using MTD from 6 April 2026; more than £30,000 in 2025 to 2026 means from 6 April 2027; and more than £20,000 in 2026 to 2027 means from 6 April 2028 ^[1].

If you were over the first threshold, HMRC should have written to you — but the obligation still applies if no letter arrived ^[2].

What counts as qualifying income

Qualifying income is the total gross income from self-employment and property letting, before expenses ^[2]. A builder turning over £60,000 with £45,000 of costs is over the £50,000 threshold, even though profit is £15,000. Employment income and dividends do not count towards it ^[2].

What changes day to day

• Keep records of income and expenses digitally, in software compatible with MTD ^[3].
• Send a quarterly update to HMRC from that software, four times a year ^[3].
• Submit a final declaration after the end of the tax year, replacing the old Self Assessment return ^[3].

Choosing software

HMRC lists software that is compatible with MTD for Income Tax, and explains what your software must be able to do ^[3]. If you are also VAT-registered, check that the same product covers MTD for VAT, so you are not running two systems ^[3].

You can sign up yourself or through an agent, such as your accountant ^[4].

Why it helps your cash flow too

Keeping invoices in accounting software every quarter means your sales ledger is always current. Connected to Nemexio, those same invoices are chased automatically the day they become overdue — so the discipline MTD imposes also shortens the time you wait to be paid.