Making Tax Digital Readiness Checker (UK)
This means gross income before expenses – combine self‑employment and property income if you have both. It is not your net profit.
MTD for Income Tax – timeline for you
Each threshold is assessed against your qualifying income from an earlier tax year (a two-year look‑back). The table below shows which phase applies to you based on the income you entered.
| Threshold | Based on income in | Mandatory from | Applies to you? |
|---|---|---|---|
| £50,000 | 2024/25 | 6 April 2026 | No |
| £30,000 | 2025/26 | 6 April 2027 | Yes |
| £20,000 | 2026/27 | 6 April 2028 | Yes |
What MTD actually requires
- Digital record‑keeping throughout the year (not just at year‑end)
- Quarterly updates submitted digitally using MTD‑compatible software
- An end‑of‑year final declaration
- You need MTD‑compatible software (or bridging software linked to a spreadsheet) – plain spreadsheets alone, without bridging software, won't satisfy the digital links requirement.
Understanding the results
What is “qualifying income”?
For MTD for Income Tax, your “qualifying income” is the gross income (before deducting any expenses) from your self‑employment and from any property you let. If you have both, you add them together. It does not include income from a job (employment) or from dividends, interest, etc. This means if you earn £30,000 from freelancing and £15,000 from a rental property, your qualifying income is £45,000.
Why the two‑year look‑back?
HMRC deliberately bases the threshold on your income from a tax year that ended two years before the rule takes effect. For example, the £50,000 threshold (April 2026) uses your 2024/25 income – you already know that figure. This gives you advance notice so you can prepare, choose software, and adapt your record‑keeping before the deadline. It avoids the unfairness of being forced into MTD part‑way through a tax year.
Partnerships and other income types. As of writing, MTD for Income Tax only covers self‑employment and property income for sole traders and individuals. Partnerships are not yet brought into scope. If you have partnership income, you should still assess your self‑employed and property income separately. HMRC may extend MTD to partnerships in the future.
This is a planning tool. It uses the announced thresholds as of June 2026, but HMRC may change them (for example, raising the thresholds or delaying the start dates). Always check the official gov.uk guidance for Making Tax Digital for the latest updates. The tool is designed to help you anticipate when MTD will apply to you – it does not replace professional advice.
Penalties for late digital submissions. Separate penalty rules exist for filing late or missing quarterly updates. HMRC has published a penalty regime that starts with points and escalates to financial penalties. For exact details, please refer to HMRC's penalty guidance rather than relying on summary figures here, as the rules may be updated.
Frequently Asked Questions
What counts as qualifying income?
Qualifying income is the gross (before expenses) income from self‑employment and from property rental. If you have both, add them together. It does not include employment income, dividends, interest, or partnership income (for now).
Why does the threshold use my income from an earlier year?
HMRC uses a two‑year look‑back so you already know the figure that determines your MTD obligation. You are never surprised mid‑year – you can prepare your software and processes well in advance.
Do I need new software, or can I keep using a spreadsheet?
You can keep using a spreadsheet if you add “bridging software” that creates a digital link between your spreadsheet and HMRC’s systems. Plain spreadsheets without bridging software will not meet the digital‑links requirement. Many affordable bridging software options exist. Alternatively, you can switch to MTD‑compatible accounting software.