When Do I Need to Start MTD? Your Deadline by Income
Not sure when MTD for Income Tax applies to you? Find your exact start date by income threshold, with no jargon and no guesswork. Updated for 2025.
April 2026 is closer than your next tax return. If you are a sole trader and you have been half-watching the Making Tax Digital story unfold for years, the question "when do I need to start MTD" probably feels overdue for a straight answer. Here it is, by income band, with no caveats buried in footnotes.
- MTD for Income Tax applies to sole traders earning over £50,000 from April 2026, over £30,000 from April 2027, and over £20,000 from April 2028.
- Your qualifying income is based on gross turnover, not profit, so expenses do not reduce your threshold figure.
- Missing your MTD start date is not a grey area; HMRC's penalty points system begins accumulating from your first missed quarterly submission.
- You do not need to wait until your mandatory start date; voluntary sign-up is open now and early movers avoid a chaotic rush.
- Landlords with property income above the same thresholds are included on the same timetable as sole traders.
The reason this question keeps surfacing on forums and Facebook groups is not ignorance. It is because HMRC has moved the goalposts so many times that even accountants have lost track. The Making Tax Digital Timeline: A Decade of Delays Explained post on this site documents every postponement since 2015. But the delays are over. Legislation is in place. Dates are fixed. Your job now is to find your number and plan accordingly.
- MTD for Income Tax Self Assessment (MTD ITSA)
- HMRC's replacement for the annual Self Assessment tax return for sole traders and landlords. Instead of one return per year, you submit four quarterly updates of income and expenses plus an end-of-period statement and a final declaration. Mandatory start dates are staggered by income level between 2026 and 2028.
The Three MTD Start Dates You Actually Need to Know
HMRC has legislated three distinct entry points, each tied to a gross income threshold. Gross income means total turnover before any expenses are deducted. If you are a self-employed plumber who billed £55,000 last year and spent £12,000 on materials and a van, your qualifying income for MTD purposes is £55,000, not £43,000.
April 2026: Over £50,000
If your self-employment income, property income, or the combined total of both exceeds £50,000 in the 2024/25 tax year, you are legally required to operate under MTD from 6 April 2026. That is the tax year that begins in under twelve months from the time this post was written.
HMRC will use your 2024/25 Self Assessment return to determine eligibility. If that return shows income above £50,000, you receive a notification and your MTD obligations begin in April 2026. There is no opt-out.
April 2027: Over £30,000
Sole traders and landlords with qualifying income between £30,001 and £50,000 in the 2025/26 tax year enter MTD from 6 April 2027. This group is the largest in numerical terms. HMRC's own impact assessment estimated that approximately 700,000 taxpayers fall into this band.
For context: a self-employed electrician earning £38,000 a year sits squarely in this group. Their mandatory start date is April 2027, which means their first quarterly update covers the period 6 April to 5 July 2027, due by 7 August 2027.
April 2028: Over £20,000
This is the most significant expansion. From April 2028, MTD applies to anyone with qualifying income above £20,000. This threshold brings in an estimated further 900,000 people, many of them part-time freelancers, side-hustle traders, and small landlords who currently file a basic Self Assessment return once a year.
A freelance designer earning £22,000 from client work, a sole-trader handyman turning over £25,000, a landlord receiving £21,000 in rent: all of them hit this threshold. HMRC has not yet committed to whether the £20,000 floor will be lowered further in future years, but the direction of travel is clear.
How HMRC Calculates Your Qualifying Income
This is where a lot of sole traders get tripped up, so it is worth being precise.
Your qualifying income is the gross income from your self-employment and any UK property income, added together. It is drawn from your Self Assessment return for the tax year two years before your potential MTD start date. So for the April 2026 cohort, HMRC looks at 2024/25. For the April 2027 cohort, they look at 2025/26.
Three things that do NOT reduce your qualifying income figure:
- Allowable business expenses (materials, fuel, tools, subscriptions)
- The £1,000 trading allowance
- Any losses carried forward from previous years
If you have more than one self-employment source, both are added together. If you also have rental income from a property, that is added too. Employed income from PAYE does not count toward the MTD threshold, which surprises many people who combine employed work with self-employed side income.
What Happens If You Miss Your Start Date
The consequences are not theoretical. The penalty points system that HMRC introduced for MTD is persistent and mechanical. Miss a quarterly submission and you accumulate one penalty point. Reach the threshold (four points for quarterly filers) and a £200 fixed penalty is charged. Points reset only after a period of full compliance.
The MTD Penalty for Late Submission: The Points System Exposed post breaks this down in full, but the short version is: ignoring your start date does not mean nothing happens until you file. The clock starts ticking from your first missed deadline, not from the moment HMRC writes to remind you.
The Argument for Not Waiting Until Your Mandatory Date
Voluntary sign-up for MTD for Income Tax is available now through HMRC's online service. Early adoption carries three practical advantages that are easy to dismiss until you experience the alternative.
You choose your software on your terms. In the months before April 2026, every compatible software provider will be running aggressive marketing campaigns at the 50,000-plus cohort. Prices may rise. Support queues will lengthen. Signing up now means you evaluate MTD-compatible software without a deadline forcing your hand.
You build the habit before it is mandatory. Logging income and expenses quarterly sounds simple, but it is a different rhythm from the annual Self Assessment many sole traders have followed for years. Starting voluntarily gives you one or two quarters to make mistakes that do not carry penalty consequences.
You find the gaps in your records. The most common shock for sole traders entering MTD is discovering that their bookkeeping is more chaotic than they thought. A voluntary first quarter reveals missing receipts, uncategorised transactions, and confusion about which expenses are allowable. Better to find that out in a low-stakes environment.
A Concrete Scenario: Marcus the Electrician
Marcus is a sole trader electrician in the East Midlands. His 2025/26 turnover is £43,500. His expenses, including van costs, tools, and public liability insurance, total around £11,000. His profit is approximately £32,500.
Because his gross income is £43,500, he falls into the April 2027 cohort. His first quarterly update will cover 6 April to 5 July 2027 and must be submitted by 7 August 2027.
If Marcus does nothing until April 2027, he will need to have chosen and signed up to a compatible software product, migrated his existing records into it, and submitted his first quarterly update, all within a few weeks of his mandatory start date. If he misses the 7 August 2027 deadline, he picks up his first penalty point.
If Marcus signs up voluntarily in late 2025 or early 2026, he has six to twelve months to settle into the software before a single deadline matters. The Your MTD First Quarterly Update: What Actually Happens post is a useful primer for what that first submission actually involves.
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What You Actually Need to Do Right Now
Knowing your start date is not the same as being ready for it. The practical checklist is short but non-negotiable.
1. Confirm your qualifying income. Look at your 2023/24 Self Assessment return (or your accountant's records) and identify your gross self-employment and property income combined. That figure tells you which cohort you are in.
2. Choose compatible software. HMRC's list of approved MTD for Income Tax software is available on GOV.UK. If cost is a concern, the Cheapest Making Tax Digital Software: Stop Overpaying post compares the real monthly costs across the main options.
3. Start categorising your income and expenses digitally. MTD requires digital records from the start of your first MTD period. Records kept in notebooks or spreadsheets that are not linked to compatible software do not satisfy the requirement.
4. Consider your accountant relationship. If you use an accountant for Self Assessment, check whether they are set up for MTD and what they will charge for the additional quarterly work. Some accountants are substantially increasing fees to manage MTD submissions on behalf of clients. It may be worth doing it yourself.
If you are currently using a spreadsheet or just a shoe box, the transition to digital records is the biggest practical change, not the quarterly submission itself. HMRC's own research found that sole traders who struggle most with MTD are those who have never used bookkeeping software, not those who are unfamiliar with tax rules.
One Number That Changes Everything
The question "when do I need to start MTD" has a precise answer once you know a single figure: your gross qualifying income from the most recent tax year. Above £50,000 in 2024/25 means April 2026. Above £30,000 in 2025/26 means April 2027. Above £20,000 in 2026/27 means April 2028.
If you opened this post uncertain about your timeline, you now have the framework to find your exact date in under five minutes. The next step is not another article. It is opening your last tax return, finding that income figure, and putting a date in your calendar. That date is the one HMRC will hold you to, regardless of how many times they delayed getting here.
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