{"id":60687,"date":"2026-11-08T11:00:37","date_gmt":"2026-11-08T06:00:37","guid":{"rendered":"https:\/\/finsoulnetwork.com\/uk\/?p=60687"},"modified":"2026-11-07T14:23:53","modified_gmt":"2026-11-07T09:23:53","slug":"making-tax-digital-income-tax","status":"publish","type":"post","link":"https:\/\/finsoulnetwork.com\/uk\/blog\/making-tax-digital-income-tax\/","title":{"rendered":"Making Tax Digital for Income Tax: Do Sole Traders and Landlords Need to Sign Up?"},"content":{"rendered":"\t\t
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Making Tax Digital for Income Tax: Do Sole Traders and Landlords Need to Sign Up?<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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The UK tax system is changing how sole traders and landlords report their income to HMRC. From April 2026, eligible taxpayers must keep digital records, submit quarterly updates and finish the year with a final declaration through compatible software. The new rules affect people with qualifying income above set limits, so not every self-employed person or property owner must join at the same time.<\/span><\/p>

Finsoul Network UK helps taxpayers understand their reporting responsibilities and prepare for the changes to Self Assessment. Knowing your start date, qualifying income limit and software requirements will help you meet your tax obligations.<\/span><\/p>

Who Must Join Making Tax Digital for Income Tax in 2026, 2027 and 2028?<\/b><\/h2>

The government is introducing the system in stages. Your qualifying income and the tax year used to assess it determine when you must start.<\/span><\/p>

Qualifying income in the relevant tax return<\/b><\/p><\/td>

Required start date<\/b><\/p><\/td><\/tr>

More than \u00a350,000 in 2024\/25<\/span><\/p><\/td>

6 April 2026<\/span><\/p><\/td><\/tr>

More than \u00a330,000 in 2025\/26<\/span><\/p><\/td>

6 April 2027<\/span><\/p><\/td><\/tr>

More than \u00a320,000 in 2026\/27<\/span><\/p><\/td>

6 April 2028<\/span><\/p><\/td><\/tr><\/tbody><\/table>

These limits refer to gross income from self-employment and property before expenses, rather than taxable profit. HMRC uses the relevant earlier year’s Self Assessment return to decide your start date.<\/span><\/p>

Does the \u00a350,000 Limit Apply to Every Sole Trader and Landlord?<\/b><\/h3>

No. The \u00a350,000 limit applies to the first group, which started in April 2026. HMRC will bring more taxpayers into the system as the qualifying income limit falls.<\/span><\/p>

Check the income figures on your relevant tax return instead of relying on your current monthly earnings or business profit. If your qualifying income is above the limit for your group, you must use the system from the relevant start date.<\/span><\/p>

What If Your Income Falls Below the Limit?<\/b><\/h3>

You do not have to join solely because you earn income from self-employment or property. If your qualifying income stays below the relevant limit, the mandatory start date does not apply to you.<\/span><\/p>

You may also be able to join voluntarily. Review the latest HMRC guidance before deciding, as your position may change when your income or circumstances change.<\/span><\/p>

How Does HMRC Calculate Your Qualifying Income?<\/b><\/h2>

Your income threshold depends on gross income from qualifying sources. HMRC adds your self-employment turnover and property income together before any business expenses are deducted. This differs from the profit figure you use to work out your taxable income.<\/span><\/p>

Does HMRC Count Turnover or Profit?<\/b><\/h3>

HMRC counts qualifying income before expenses. Do not deduct rental costs, office expenses, stock purchases or other business costs when checking the limit.<\/span><\/p>

Your taxable profit may be much lower than your turnover, but the qualifying income calculation still uses the gross figures. Check the figures on your Self Assessment return to find the correct start date.<\/span><\/p>

Do Business Income and Rental Income Count Together?<\/b><\/h3>

Yes. HMRC combines qualifying income from self-employment and property when it checks the limit. A person who runs a business and receives rental income must consider both sources.<\/span><\/p>

Employment salary, pension income, savings interest and dividends do not count towards this limit. You may still need to declare those sources on your tax return.<\/span><\/p>

Keep a clear record of each income source so you can identify the amounts HMRC uses for the calculation.<\/span><\/p>

Do Sole Traders Need to Register for MTD ITSA?<\/b><\/h2>

Sole traders who meet the qualifying income requirements must use the new system from their applicable start date, unless HMRC grants an exemption. The rules apply to eligible sole traders who already file Self Assessment returns. They must keep digital records, send quarterly reports for each tax year and complete their end-of-year reporting using compatible software.<\/span><\/p>

What If You Run More Than One Business?<\/b><\/h3>

If you operate more than one sole trader business, HMRC looks at the qualifying income from all your self-employment sources together with any qualifying property income.<\/span><\/p>

You must sign up each income source and keep records for each one. You must also send the required quarterly reports for each source. Your software should let you separate income and expenses between businesses so you report the correct figures.<\/span><\/p>

What If You Receive a Salary or Pension as Well?<\/b><\/h3>

You can have employment income or pension income alongside self-employment income. These additional sources do not count towards the qualifying income limit.<\/span><\/p>

However, you must still include relevant income when you finish your tax year. Check the figures HMRC already holds and add any information that remains outstanding before you submit your final declaration.<\/span><\/p>

Do Landlords Need to Join Making Tax Digital?<\/b><\/h2>

Landlords must check their qualifying property income and any additional self-employment income to find out whether they need to join. The rules can affect owners of residential and commercial rental properties, including people who receive rent alongside income from another business.<\/span><\/p>

Does MTD Apply If You Own Only One Rental Property?<\/b><\/h3>

The number of properties does not decide your obligation by itself. A landlord with one property must join if their qualifying income is above the limit for their start date. A landlord with several properties may stay outside the mandatory rules if their qualifying income is below that limit.<\/span><\/p>

Check the gross rental income on your relevant tax return. Do not use rental profit after allowable expenses to assess the limit.<\/span><\/p>

How Does Joint Property Ownership Affect the Rules?<\/b><\/h3>

Each joint owner must assess their own tax position. Consider only your share of the property income rather than the whole rent received by all owners.<\/span><\/p>

Keep records that identify your share of rental income and relevant expenses. If you also earn self-employment income, add that qualifying income when checking the limit. Seek tax advice if your ownership share or entitlement is unclear.<\/span><\/p>

Who Can Claim an Exemption from the Digital Rules?<\/b><\/h2>

Some taxpayers may qualify for an exemption if it is not reasonably possible for them to use digital services. HMRC considers applications based on the person’s circumstances, including age, health, disability, religious beliefs or internet-access difficulties.<\/span><\/p>

An exemption does not apply automatically because someone prefers paper records or finds digital reporting inconvenient.<\/span><\/p>

How Do You Apply for an Exemption?<\/b><\/h3>

Read HMRC’s exemption guidance and apply before your required start date. Explain the circumstances that prevent you from using digital services and provide supporting information when HMRC asks for it.<\/span><\/p>

If you have already joined and your circumstances change, contact HMRC about an exemption. Check HMRC’s guidance on what to do while your application is considered. If HMRC refuses your application, review the decision and the available appeal process.<\/span><\/p>

What If You Live Abroad or Have a Special Tax Arrangement?<\/b><\/h3>

Living overseas or having an unusual tax arrangement does not automatically remove your obligations. Your residence status, income sources and legal circumstances may affect the rules that apply to you.<\/span><\/p>

Check your position with HMRC or a qualified tax adviser before assuming that an exemption applies.<\/span><\/p>

How Do You Sign Up for Making Tax Digital for Income Tax?<\/b><\/h2>

Sole traders and landlords can use HMRC’s online service to sign up. Before you start, check your qualifying income, confirm your start date and select software that supports your reporting needs.<\/span><\/p>

From September 2026, HMRC is signing up taxpayers who need to use the system for 2026\/27 and have not yet registered. You do not need to wait for HMRC to contact you before taking action.<\/span><\/p>

What Should You Prepare Before Registration?<\/b><\/h3>

Prepare the following information before you begin:<\/span><\/p>