A question I hear a lot from sole traders and landlords is: “Will I have to sign up for Making Tax Digital myself, or will HMRC tell me?” The short answer is that HMRC decides who is in scope and writes to those people, but it stays your responsibility to check where you stand. Here is how it works, and why some people choose to join early.
Correct as of November 2026, check GOV.UK for the latest rules.
How does HMRC decide who has to join?
HMRC looks at the Self Assessment tax return you submitted in the previous tax year and checks your qualifying income. If it is over the threshold for the start date, you are in scope and HMRC writes to let you know. A letter is not a guarantee that HMRC has got it right, though, and if you are in scope and don’t hear anything, you are still expected to check. The official guidance is on GOV.UK in Find out if and when you need to use Making Tax Digital for Income Tax.
What are the thresholds?
The start dates are phased by income:
- Over £50,000 of qualifying income (from your 2024-25 return): from 6 April 2026.
- Over £30,000 (from your 2025-26 return): from 6 April 2027.
- Over £20,000 (from your 2026-27 return): from 6 April 2028.
Partnerships come later.
What counts as qualifying income?
Qualifying income is your total gross income from self-employment and property, before you take off any expenses. If you own a property jointly, your share counts. Your share of partnership profit, employment income, dividends and pensions are not part of it. Because it is the gross figure that matters, someone with modest profits can still be over a threshold. It is worth working out your own number rather than guessing.
Can you join before HMRC enrols you?
Yes. Voluntary sign-up is open for the current or next tax year if you are registered for Self Assessment and have filed a return in the last two years. One thing to know first: if you volunteer, you need to send any quarterly updates you have missed. Some people like to start early so that the routine is in place well before it is compulsory.
What changes once you are in?
You keep your records digitally and send HMRC an update every quarter, instead of one annual picture. For 2026-27 there are no penalty points for sending a quarterly update late, which gives people a bit of breathing space while they get used to it.
Do you have to leave Excel?
No. Excel is still a perfectly good way to keep your records, as long as you submit through HMRC compatible bridging software. That is exactly what my ACE bookkeeping models are designed around, and I explain more in why you can still use Excel for Making Tax Digital. If you want the specifics for your situation, there are pages for sole traders and landlords, and the Making Tax Digital in Excel page covers the spreadsheet route.
Questions I get asked
Will HMRC tell me if I am in scope? HMRC writes to those it thinks are in scope, but it remains your responsibility to check.
Is my rental income included? Yes, gross property income counts, and if you own jointly it is your share.
Can I wait until HMRC contacts me? You can, if you are not volunteering, but checking your own figure early means no surprises.
Is the rule likely to change? It has changed before, which is why I have added the date above. Always check GOV.UK.
Want to see how it works in practice?
If you would like to see an MTD ready spreadsheet in action, book a free bookkeeping demo and I’ll walk you through it. You can also get in touch with any questions.
Traci