MTD for Income Tax is being rolled out in waves based on income. The key is understanding what income counts and which threshold you cross.
The three waves
| Your qualifying income | MTD becomes mandatory |
|---|---|
| Over £50,000 | April 2026 (now) |
| £30,000 – £50,000 | April 2027 |
| £20,000 – £30,000 | April 2028 |
| Under £20,000 | Not currently mandated |
What is "qualifying income"?
This is the part people get wrong. Qualifying income is your gross income — turnover before you deduct any expenses — from two sources added together:
- Income from self-employment (sole trader business turnover), and
- Income from property (total rent received).
It is not your profit, and it's not after the mortgage or running costs. It's the top-line figure.
Worked example. Priya rents out two flats for £18,000 a year total and earns £36,000 freelancing. Her profit is much lower after costs — but her qualifying income is £18,000 + £36,000 = £54,000. She's over £50,000, so MTD applies to her from April 2026.
How HMRC decides
HMRC looks at the figures from your most recent submitted Self Assessment return to work out whether you're over a threshold, and will write to those affected. If your income grows past a threshold in future years, you can be brought into MTD then too.
Why it pays to know early
If you're in the 2027 or 2028 wave, you don't have to wait. Getting onto digital records now means clean figures, no last-minute scramble, and — if you sign up early — today's pricing before the deadline rush pushes fees up.
This is general guidance. Thresholds and rules can change, and your situation may have nuances (partnerships, for example, follow a different timeline). Confirm your position with a qualified accountant.
Find your exact start date
Two questions, ten seconds — see which wave you're in.
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