"Do I actually have to do this?" is the first Making Tax Digital question everyone asks — and the answer hides in one term: qualifying income. Get that number right and your MTD start date falls out automatically. Get it wrong and you either panic unnecessarily or, worse, miss a mandation date HMRC believes you should have known about.
This guide pins down exactly how the thresholds work, with worked examples for the awkward cases — mixed income, joint property, new businesses — plus who can claim exemption.
The Timeline
| Mandation date | Qualifying income over | Measured from | Roughly who |
|---|---|---|---|
| 6 April 2026 | £50,000 | 2024–25 return | ~900k sole traders & landlords |
| 6 April 2027 | £30,000 | 2025–26 return | ~1.5m more |
| 6 April 2028 | £20,000 (announced) | 2026–27 return | most of the remainder |
General partnerships are not yet mandated, and there is currently no MTD requirement for those below the announced £20,000 line — though HMRC has signalled the long-term direction of travel is downwards.
What Counts as Qualifying Income
- Included: gross self-employment turnover (all trades combined) and gross property income (your beneficial share) — before expenses, allowances or reliefs.
- Not included: PAYE salary, dividends, pension income, savings interest, capital gains, partnership profit shares.
Because it is gross, a landlord with high rent but thin margins, or a tradesperson with heavy materials costs, can be mandated while making modest profit. The test is turnover, full stop.
Worked Examples
| Situation (2024–25 figures) | Qualifying income | Mandated from |
|---|---|---|
| Freelance designer, £62,000 turnover | £62,000 | April 2026 |
| Landlord, £35,000 rent + consultant, £20,000 fees | £55,000 (combined) | April 2026 |
| Employee on £80,000 + £12,000 freelance | £12,000 (salary excluded) | Not before 2028 wave |
| Couple, joint rental income £70,000 (50/50) | £35,000 each | April 2027 (each) |
| Uber driver £24,000 + Deliveroo £4,000 | £28,000 (trades combined) | April 2028 wave |
Exemptions and Edge Cases
- Digitally excluded: if age, disability, location (no reliable internet) or religious beliefs make software use impractical, you can apply to HMRC for exemption — it is not automatic; you must apply and HMRC must agree.
- Already exempt groups: trusts, estates, and (for now) general partnerships file as before.
- New businesses: with no return two years back, you are not mandated immediately — you enter once a filed return shows qualifying income over the threshold.
- Voluntary sign-up: you can join MTD early, which some do to spread the learning curve before their mandation date.
What to Do With Your Answer
If you are in a wave: your two jobs are digital records and recognised software. Start with the records — they are the daily-habit part. Converting your bank statements automatically into categorised spreadsheets (rather than typing them) gets you 80% of the way; see the digital record-keeping rules and our guides for landlords and sole traders.
If you are not (yet): diarise a check each January against your latest return — the thresholds are falling, and the 2027 and 2028 waves will catch most people reading this page.
Mandated? Get Your Records Sorted in Seconds
If you are in an MTD wave, the job now is clean digital records. Upload any UK bank statement and get a categorised spreadsheet back in seconds — free first conversion, no signup.
Try BankScan AI Free →Frequently Asked Questions
Is the threshold based on profit or turnover?
Turnover — gross income before any expenses. A landlord with £52,000 of rent and £30,000 of mortgage interest and repairs is still over the £50,000 line, because the test ignores costs entirely.
Do multiple income sources combine?
Yes, across self-employment and property: all trades plus your share of gross rents are added together for the test. Employment income, dividends, pensions and interest never count.
How does HMRC know my qualifying income?
From your own filed tax returns, measured two years back from each mandation date — April 2026 mandation is judged on your 2024–25 return. HMRC writes to taxpayers it identifies as mandated, but the legal obligation applies whether or not a letter arrives.
What if my income hovers around the line?
You are tested each cycle against the return two years prior. Cross the line once and you are in from the corresponding April; you can only apply to leave after your qualifying income stays below the threshold for three consecutive years. Plan as if borderline means in.
Can I be exempt because I am not comfortable with technology?
Discomfort alone is not grounds — the digital-exclusion exemption covers those for whom software use is genuinely impractical (age, disability, no viable internet, religious grounds), and it requires a successful application to HMRC. If you can bank online, HMRC is unlikely to agree you cannot manage MTD software.
Last updated: 9 July 2026. This guide explains the Making Tax Digital rules as published by HMRC — always check GOV.UK for the latest official guidance. Read our MTD bank statement compliance guide or browse all blog posts.