UK Freelancers and Landlords: MTD Duties Over £50,000

From 6 April 2026, sole traders and landlords with combined qualifying gross income above £50,000 must use Making Tax Digital for Income Tax. Affected taxpayers must keep digital records, use compatible software and send quarterly updates, but those updates are not four separate tax bills.

By the AtheneNet Finance Desk | Published 14 August 2026

The £50,000 test uses gross income, not profit

HM Revenue & Customs uses qualifying income reported through Self Assessment to decide who must join. For the first mandatory year, HMRC generally looks at the gross self-employment and property income reported for the 2024–25 tax year.

Qualifying income is turnover from self-employment plus gross property income before deductible expenses. It is not the profit left after costs, tax allowances or reliefs. Employment wages, pensions and dividends do not count towards this particular threshold.

A person with £32,000 of freelance turnover and £22,000 of gross rental income would therefore have £54,000 of qualifying income, even if expenses reduce the eventual taxable profit substantially.

For jointly owned property, taxpayers should normally include their own share of the gross property income reported on their return, rather than the other owner’s share. Ownership arrangements can affect the reported figure, so HMRC records and the relevant Self Assessment return should be checked.

Digital records and quarterly updates are now required

People within the regime must:

• maintain digital records of income and relevant business expenses;
• use software that works with Making Tax Digital for Income Tax;
• send quarterly summaries for each qualifying business or property business; and
• finalise their figures and submit their annual Self Assessment tax return.

Quarterly updates provide HMRC with summaries of income and expenses recorded during the year. They do not create four separate tax-payment deadlines. Tax calculations, adjustments, relief claims and other taxable income are dealt with through the end-of-year process, with tax paid under the usual Self Assessment timetable.

An accountant does not remove the taxpayer’s obligation

An authorised accountant or tax agent can maintain records and submit updates for a client. However, appointing an agent does not itself exempt the taxpayer. The individual remains responsible for ensuring the required records and submissions are complete and on time.

Using spreadsheets may still be possible, but they must connect appropriately to compatible software. Copying figures manually between separate systems may not meet HMRC’s digital-link requirements.

Exemptions require an individual HMRC decision

People who cannot reasonably use digital tools because of age, disability, remoteness, religious beliefs or another practical barrier may be able to apply for exemption. An exemption is not automatic merely because digital reporting is difficult or an accountant is involved.

Affected readers should now check the income figures on their 2024–25 return, confirm whether HMRC has placed them within the regime, select compatible software and agree responsibilities with any agent. Anyone seeking exemption should contact HMRC rather than assume the rules do not apply.

HMRC maintains detailed Making Tax Digital guidance and a broader Income Tax guidance collection for individuals, agents and software users.

Source: HM Revenue & Customs