Who has to use MTD for Income Tax — and who is exempt?

In short: You must use MTD for Income Tax if you are a sole trader or landlord with qualifying income above the phased thresholds: over £50,000 from 6 April 2026, over £30,000 from April 2027, and over £20,000 from April 2028, before any expenses are deducted, unless an exemption applies (GOV.UK).

Who must use MTD from April 2026?

Sole traders and landlords must use MTD from April 2026 if their qualifying income is more than £50,000, assessed from their 2024-25 tax return. Under Making Tax Digital, qualifying income is combined gross self-employment turnover plus gross property income, before expenses.

HMRC says around 780,000 self-employed people and landlords are mandated from April 2026, with a further 970,000 joining from April 2027 (GOV.UK). For a broader overview, see what Making Tax Digital for Income Tax is.

Who is automatically exempt?

You are automatically exempt if your qualifying income is £20,000 or less. GOV.UK uses the wording "automatically exempt" for this position, and the exemption guidance sits alongside the main mandation rules (GOV.UK).

Qualifying income is still measured before expenses. That means expenses do not reduce the income figure used for the threshold test.

Who can apply for an exemption?

You can apply for a digital-exclusion exemption if age, health, disability, religious beliefs, or no reasonable internet access means you cannot use MTD. You apply to HMRC by phone or letter, and HMRC gives a 28-day response target.

Other exempt cases include people with no National Insurance number, personal representatives of a deceased person's estate, power-of-attorney cases, ministers of religion, and Lloyd's underwriting members. Foster and kinship carers, and farmers or artists using income averaging, are temporarily exempt until April 2027.

Who is not in MTD yet?

Partnerships are not yet mandated for MTD for Income Tax, and HMRC says their timeline will come at a later date. Trusts and companies are outside MTD for Income Tax.

Foster and kinship carers, and farmers or artists using income averaging, are also temporarily exempt until April 2027. Landlords should still check the rules carefully, especially where property income is combined with self-employment income; see MTD for landlords.

What if your income falls after you join?

HMRC confirms MTD status annually from tax return information, but the fact pack does not give a precise exit-rule mechanic. The safe position is to watch the annual HMRC status confirmation rather than assuming an automatic opt-out after one lower-income year.

Because thresholds use gross qualifying income before expenses, a profit fall alone does not necessarily change your MTD position. It is the gross combined self-employment and property income figure that matters.

How can Taxley help with MTD for Income Tax?

Taxley MTD handles digital records, manual entry or CSV import, cumulative quarterly updates you review before submitting, in-year tax estimates, and the final declaration. It supports self-employment and UK and foreign property income, which are the income types in scope for MTD Income Tax. It is free during beta and launching soon; visit the MTD Income Tax page to join the update list.

Frequently asked questions

Is MTD required if I earn under £20,000?

No. GOV.UK says you are automatically exempt if your qualifying income is £20,000 or less.

Do partnerships have to use MTD?

Not yet. Partnerships are not currently mandated for MTD for Income Tax, and HMRC says they will come at a later date.

Is property income counted with self-employment income?

Yes. Qualifying income combines gross self-employment turnover and gross property income before expenses.

How do I apply for an MTD exemption?

You apply to HMRC by phone or letter if digital-exclusion grounds apply. HMRC gives a 28-day response target, and there is 30 days to appeal a refusal.