Check if you'll need to sign up for Making Tax Digital for Income Tax
Find out if you can report and give updates about your income from self-employment and property using Making Tax Digital for Income Tax.
Who will need to sign up
You’ll need to sign up and use Making Tax Digital for Income Tax if all of the following apply:
- you’re an individual registered for Self Assessment
- you get income from self-employment or property, or both
- your qualifying income is more than £30,000
You must check when to sign up for Making Tax Digital for Income Tax.
Alternatively, you may be able to voluntarily sign up now. This will help HMRC test and develop the service.
Who will not need to sign up
You do not need to sign up if your qualifying income is £30,000 or less.
You’re automatically exempt and cannot sign up for Making Tax Digital if you are a:
- trustee, including a charitable trustee or a trustee of non-registered pension schemes
- person that does not have a National Insurance number
- personal representative of someone who has died
- Lloyd’s member, in relation to your underwriting business
- non-resident company
If you can show that it’s not reasonable or practical for you to use computers or the internet, you can apply for an exemption.
If you are exempt or choose not to sign up voluntarily, you must continue to report your income and gains in a Self Assessment tax return.
Check what is included in your qualifying income
Your qualifying income is the total income that you get in a tax year from self-employment and property. We assess your gross income (also called your turnover) before you deduct expenses.
All of your qualifying income must be reported through software that works with Making Tax Digital for Income Tax.
If your accounting period is longer or shorter than 12 months, and we have the necessary data, we will annualise your qualifying income. For example, if you have become a sole trader, but you have only been trading for 6 months in your first tax year, then we will double your income to find your qualifying income.
All other sources of income reported through Self Assessment, such as income from employment, a partnership, or savings, do not count towards your qualifying income. You will need to report income from these sources using either your:
- Making Tax Digital compatible software (if it has the functionality)
- HMRC online services account
If you get income from more than one source
Income from all relevant sources will count towards your qualifying income. For example, your gross income (income before you deduct expenses) could be:
- £25,000 from rental income
- £27,000 from self-employment income
In this example, your total qualifying income would be £52,000.
If you get income from a jointly owned property
Your share of the property income will count towards your qualifying income. For example, you could:
- jointly own a property with your sibling which generates £50,000 in income
- both receive an equal share
- not have any income from self-employment
In this example, your qualifying income would be £25,000.
If you are a carer that is eligible for qualifying care relief
The qualifying care receipts that you receive will not count towards your qualifying income.
If you get income from a partnership
Income from a partnership does not count towards your qualifying income, unless you receive disguised investment management fees or income based carried interest.
If you receive disguised investment management fees or income based carried interest
These forms of income are treated as the profits of a deemed trade and will form part of your qualifying income.
If you are a beneficiary of a bare trust
Any property or trading income that you are entitled to will count towards your qualifying income.
If you are a beneficiary of an interest in possession trust
Any property or trading income that is paid directly to you and bypasses the trustees will count towards your qualifying income.
How residence and domicile affect your qualifying income
You can find out more about residence, domicile and the remittance basis and the deemed domicile rules.
If you are resident and domiciled in the UK
Your income from foreign property or foreign self-employment will count towards your qualifying income.
For example, you could:
- be a sole trader in the UK
- rent out a property in another country
Both income sources will contribute to your qualifying income.
If you are a resident and domiciled in the UK, both income sources will contribute to your qualifying income.
If you are deemed domiciled in the UK
Income from foreign property or foreign self-employment will count towards your qualifying income, if you are treated as UK domiciled for that tax year.
If you are remitting foreign income from a year in which the remittance basis applied to you, that income will not count towards to your qualifying income.
If you are resident or domiciled outside of the UK
Only income from UK self-employment and UK property will count towards your qualifying income. You do not need to use Making Tax Digital for Income Tax for your foreign income.
For example, you could:
- be domiciled in France
- rent out a property in France
- run a business in the UK
Only your UK self-employment income would contribute to your qualifying income.
We will ask you to confirm your domicile status when you sign up for Making Tax Digital for Income Tax.
Last updated 22 April 2024 + show all updates
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Information about who will and who will not need to sign up has been updated.
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The guidance has been updated to clarify when you will need to sign up for Making Tax Digital for Income Tax and when you will not need to.
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Thresholds for meeting the requirements for Making Tax Digital for Income Tax have been added for April 2026 and April 2027.
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Information has been added for you to check if you can use Making Tax Digital for Income Tax. Additional information has been added for what is included in your qualifying income, how you should report other income and how residence and domicile affect your qualifying income.
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You only need to follow the Making Tax Digital for Income Tax rules for your UK self-employment and property income if you're resident or domiciled outside the UK.
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First published.