Making Tax Digital for Income Tax (MTD) rules apply to you if you’re registered for Income Tax Self Assessment and have a qualifying income of more than £10,000. If you meet this criteria, from 6 April 2024 you’ll need to use MTD compatible software to:
- keep records of your business income and expenses in a digital format
- send quarterly updates of your business income and expenses to HMRC
- finalise your business income and submit your final declaration
Sign up voluntarily now
You can sign up now. This will allow us to test and develop the service before 6 April 2024.
You will be able to apply for an exemption if you can show that it’s not reasonable or practical for you to use computers or the internet.
Find out about qualifying income
Your qualifying income is your total income in a tax year from self-employment and property. We assess your qualifying income before you deduct expenses.
You’ll be able to report other income such as that from employment or savings using MTD compatible software. This does not contribute to your qualifying income.
You must sign up for Making Tax Digital for Income Tax and follow the requirements for each relevant income source if:
- you get income from self-employment or property
- this total income is over £10,000
If you get income from more than one source
You must include each source of income. For example, your gross income (income before you deduct expenses) could be:
- £5,000 from rental income
- £7,000 from self-employment income
As your qualifying income in this example is over £10,000, you would need to sign up to Making Tax Digital for Income Tax for both businesses.
If you get income from a jointly owned property
For example, you:
- jointly own a property with your spouse which generates £15,000 in income
- both receive an equal share
- do not have any income from self-employment
In this example your qualifying income is £7,500. You would not need to sign up to Making Tax Digital for Income Tax.
Find out if you are exempt
You are exempt if your qualifying income is £10,000 or less. You can sign up to Making Tax Digital for Income Tax on a voluntary basis but you do not need to.
These groups are not eligible to sign up for Making Tax Digital for Income Tax and do not need to follow the requirements:
- trustees of registered pension schemes
- non-resident companies
Resident or domiciled in the UK
If you are resident and domiciled in the UK you must follow Making Tax Digital rules in relation to your relevant UK and foreign income.
For example, you’ll need to report both sources of income through Making Tax Digital for Income Tax, if:
- you’re self-employed in the UK
- you rent out a property in Spain
- your combined income is over £10,000
Resident or domiciled outside the UK
If you’re domiciled or resident outside the UK you only need to follow Making Tax Digital for Income Tax rules for your UK self-employment and property income.
We’ll ask you to confirm your domicile status when you sign up for Making Tax Digital for Income Tax. You’ll not need to sign up in relation to your relevant foreign income.
If your domicile is in France and you rent out a property there but also run a business in the UK, you are only required to report your UK self-employment income through Making Tax Digital for Income Tax if it exceeds £10,000.