If you only started trading this year, it is hard to know whether Making Tax Digital applies to you yet. The rules are phased by income, and a business that is only a few months old doesn’t fit neatly into that. Here is what I can say with confidence, and where you should check GOV.UK yourself.
Correct as of November 2026, check GOV.UK. Some of the detail is still being finalised.
The April 2027 start date
From 6 April 2027, Making Tax Digital for Income Tax applies to people with qualifying income over £30,000, judged from their 2025-26 Self Assessment return. HMRC reviews the return you submitted in the previous tax year and writes to those in scope, but it stays your responsibility to check. The official page is Find out if and when you need to use Making Tax Digital for Income Tax.
What counts as qualifying income?
It is your total gross income from self-employment and property, before expenses. For a jointly owned property, your share counts. Partnership profit share, employment income, dividends and pensions are not included. If you started trading this year, it is only the gross income from the trade or property that matters, not what is left after costs.
What if you only traded for part of a year?
If you were a sole trader for only part of a tax year, HMRC will annualise your income if it has the information. That means working out what a full year would look like, so a few strong months are not treated as the whole picture. Landlords need to be more hands-on: for property income, you have to annualise it yourself.
What if you are close to a threshold?
This is where I would do a little homework now rather than wait for a letter. Work out your gross income from self-employment and property, annualise it if you have only been going part of a year, and compare it with the threshold for the date that applies to you. If you are close, it is worth knowing which side you are on.
Should you volunteer?
You may be able to. 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. Volunteers need to send any quarterly updates they have missed, and for 2026-27 there are no penalty points for late quarterly updates. For some people, getting into the routine early makes the first compulsory year feel much calmer.
What I can’t tell you
GOV.UK doesn’t spell out how a brand new business is treated, so I won’t guess. If you have only just started, check the guidance and, where you can, speak to your accountant or HMRC. The rules are still being finalised, so this is one to keep an eye on.
Questions I get asked
Do landlords count? Yes, gross property income is part of qualifying income.
Do I have to leave Excel? No, as long as you submit through HMRC compatible bridging software.
Where can I see the rules? On GOV.UK, linked above.
I’m not sure which side of the line I’m on. What now? Add up your gross income and take it from there. I’m happy to talk it through.
Where to go next
If this applies to you, you may find these pages helpful: MTD software for sole traders and MTD software for landlords. To see an MTD ready spreadsheet in action, book a free bookkeeping demo, or get in touch.
Traci