What is MTD for Income Tax?
Making Tax Digital (MTD) for Income Tax is the government initiative that aims to fully digitalise financial record keeping and submissions for Income Tax.
It applies to self-employed individuals, and landlords with qualifying property income, who already use Self Assessment. It doesn’t currently apply to other individuals, such as partners, or those solely needing to declare other forms of income like pension income above the personal allowance, company dividends, or savings interest.
MTD for Income Tax is distinct from the Self Assessment system and is mandatory for those sole traders and landlords who fall within scope.
This includes those whose gross yearly income is over a certain amount, and MTD for Income Tax is being introduced in stages over until the end of the decade as follows:
- Gross income over £50,000: MTD for Income Tax is a legal requirement as of April 2026.
- Gross income over £30,000: MTD for Income Tax is a legal requirement as of April 2027.
- Gross income over £20,000: MTD for Income Tax is a legal requirement as of April 2028.
The government has said it is consulting about introducing MTD for gross income levels below £20,000, but it has not yet announced plans.
It’s also possible to voluntarily sign-up to MTD for Income Tax, regardless of your income level, provided you’re a sole trader or landlord who meet the other requirements.
Anybody who isn’t within scope of MTD for Income Tax but who still needs to declare Income Tax (outside of full-time employment) should keep using the Self Assessment system.
E-Book: Your Guide to MTD for Income Tax
Our free guide is written by experts and is all you need as a sole trader or landlord to understand what MTD means for your business—and how to ensure you’re ready in time.
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