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MTD rules are based on your gross income — not profit, not what you expect to earn. Use our free 4-step checker to find out exactly what applies to you and when.
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MTD Qualification Checker
We'll tell you exactly which MTD rules apply, when they kick in, and what you need to do next.
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Understanding The Rules
The Two MTD Regimes Explained
MTD isn't one single thing; there are two separate programmes with different rules. Here's what each one means.
MTD for VAT
All VAT-Registered Businesses
If you're registered for VAT, you must already be using MTD — this has been mandatory since April 2022 for all VAT-registered businesses, regardless of your turnover.
- Applies to all VAT-registered businesses, no income test.
- Must keep digital VAT records using compatible software.
- VAT returns must be submitted via MTD software.
- Quarterly submission deadlines: 1 month and 7 days after quarter end.
- Late submissions earn penalty points — reaching 4 triggers a £200 fine.
- Manual submission via the old HMRC portal is no longer permitted.
MTD for Income Tax (ITSA)
Self-Employed People & Landlords
From April 2026, self-employed individuals and landlords must use MTD to report their income. The rules are based on your gross income not profit.
- Threshold: gross self-employment + rental income (not profit).
- April 2026: £50,000+ gross income.
- April 2027: £30,000+ gross income
- April 2028: £20,000+ gross income.
- You join MTD the tax year after you first exceed the threshold.
- HMRC looks at your last filed return to determine eligibility.
Making Tax Digital Rollout Timeline
Extended to ALL VAT-registered businesses, regardless of turnover. If you're VAT registered, MTD for VAT applies to you now.
MTD for VAT — All Businesses
April 2022 ( Active)
The threshold drops, bringing significantly more sole traders and landlords into the MTD regime.
MTD for Income Tax — £30,000 + Threshold
April 2027
The threshold drops, bringing significantly more sole traders and landlords into the MTD regime.
MTD for Income Tax — £30,000 + Threshold
April 2027
April 2019 ( Active)
MTD for VAT — Large Businesses
VAT-registered businesses above the £85,000 threshold required to use MTD software for VAT returns.
April 2026
MTD for Income Tax - £50,000+ Threshold
Self-employed individuals and landlords with gross income over £50,000 must begin quarterly digital reporting. The first quarterly update will be due 5 August 2026.
April 2027
MTD for Income Tax — £30,000 + Threshold
The threshold drops, bringing significantly more sole traders and landlords into the MTD regime.
The Two MTD Regimes Explained
Extended to ALL VAT-registered businesses, regardless of turnover. If you're VAT registered, MTD for VAT applies to you now.
MTD for VAT — All Businesses
April 2022 ( Active)
The threshold drops, bringing significantly more sole traders and landlords into the MTD regime.
MTD for Income Tax — £30,000 + Threshold
April 2027
The threshold drops, bringing significantly more sole traders and landlords into the MTD regime.
MTD for Income Tax — £30,000 + Threshold
April 2027
VAT-registered businesses above the £85,000 threshold required to use MTD software for VAT returns.
MTD for VAT — Large Businesses
April 2019 ( Active)
Self-employed individuals and landlords with gross income over £50,000 must begin quarterly digital reporting. The first quarterly update will be due 5 August 2026.
MTD for Income Tax - £50,000+ Threshold
April 2026
The threshold drops, bringing significantly more sole traders and landlords into the MTD regime.
MTD for Income Tax — £30,000 + Threshold
April 2027
Exemptions & Exclusions
- Who Can Be Exempt from MTD?
MTD exemptions are limited and must be formally approved by HMRC. Here are the legitimate grounds — and who is automatically excluded.
- Age, Disability or Long-Term Illness
If a physical or cognitive disability makes it unreasonably difficult to use digital tools, you can apply for an exemption. Supporting medical evidence will be required.
- No Reliable Internet Access
If you live or work in a location without reasonable internet access, HMRC may grant an exemption. You'll need to demonstrate that your location genuinely prevents digital submission.
- Religious Beliefs
Certain religious beliefs that prevent the use of technology may qualify for exemption. Applications are assessed by HMRC on a case-by-case basis with full supporting documentation.
- Insolvency Proceedings
Businesses in the process of becoming insolvent may be exempt while formal insolvency proceedings are underway. This is temporary and subject to HMRC confirmation.
- Trustees & Executors
Personal representatives managing estates of deceased individuals are automatically excluded from MTD. Executors file a final Self Assessment on behalf of the estate instead.
- Limited Company Structures
Moving rental or trading income into a limited company removes it from MTD for Income Tax. The company will fall under Corporation Tax MTD when that launches, but the individual does not.
- Important
Exemptions must be formally applied for and approved by HMRC before you can continue with paper-based filing. Simply not using software is not an exemption — it will lead to penalties. We can guide you through the application process.
Still Not Sure Where You Stand with MTD?
The rules can be surprisingly nuanced especially if you have multiple income streams, a mix of employment and self-employment, or you're thinking about restructuring. Book a free, no-obligation consultation and we'll give you a clear, personalised answer.
- Confirm exactly which MTD rules apply to you.
- Get your specific MTD start date.
- Understand what you need to do — and when.
- Software recommendations for your situation.
- No hard sell, no jargon, no invoice.
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