Am I in scope for Making Tax Digital as a sole trader in 2026?

Quick answer: You're in scope for the first wave of Making Tax Digital for Income Tax (MTD ITSA) if your combined self-employment and property turnover is over £50,000, starting 6 April 2026. Lower thresholds follow in 2027 and 2028. Not sure which side of the line you fall on? Check your status in 60 seconds with the MTD Scope Checker.

If you're self-employed, you've probably heard that Making Tax Digital is changing how you report income to HMRC. The big question almost everyone asks first is simple: does this actually apply to me? This guide answers exactly that, with the real thresholds, the real dates, and a couple of worked examples so you can see where you stand.

What "in scope" actually means

Being "in scope" for Making Tax Digital for Income Tax (MTD ITSA) means HMRC requires you to change how you keep records and report. Instead of one Self Assessment return a year, once you're mandated you must:

• Keep digital records of your business income and expenses,
• Send four quarterly updates to HMRC during the tax year, and
• Submit a final declaration after the year ends to confirm and finalise everything.

That's five submissions a year instead of one. The quarterly update deadlines are 7 August, 7 November, 7 February and 7 May, and the final declaration is due by 31 January after the tax year ends (so for the 2026/27 tax year, that's 31 January 2028).

If you're not in scope yet, nothing changes for you right now — you carry on with normal Self Assessment until a threshold catches up with you in a later year.

The three phased thresholds and their dates

MTD ITSA is being rolled out in stages, based on your qualifying income (more on what that means below). Here's the timetable:

Income of £20,000 or under is not yet mandated — HMRC has signalled it intends to bring this group in eventually, but no date has been set.

One detail trips a lot of people up: the test is strictly "over". If your qualifying income is exactly £50,000, you are not over £50,000, so you don't join the April 2026 wave — you fall into the £30,000 band from April 2027 instead. A single pound either side of that line changes your start date.

Turnover, not profit — and a lookback

Two points decide whether you cross a threshold, and both catch people out.

1. It's turnover, not profit. Qualifying income is your gross income before expenses — your turnover, not what's left after costs. So a sole trader with £58,000 of sales and £15,000 of expenses (a £43,000 profit) is still tested on the £58,000. That figure is over £50,000, so they're in scope from April 2026, even though their profit is well under the threshold.

2. HMRC looks back at your last return. HMRC doesn't predict your future income — it uses your most recent Self Assessment return to decide whether you're mandated. This is a lookback. So your obligation from April 2026 is based on figures you've already filed, which means you can work out where you stand today rather than waiting and hoping.

Qualifying income combines self-employment and property income, added together. It specifically excludes employment salary taxed through PAYE, dividends, savings interest and pension income. If you'd like the full breakdown of what counts, see our qualifying income guide.

Worked example 1: Priya, the freelance designer

Priya is a sole trader graphic designer. Her most recent Self Assessment return shows £62,000 of turnover from her design work. She has no property income.

• Qualifying income: £62,000 (all self-employment).
• £62,000 is over £50,000.
• Priya is in scope from 6 April 2026.

She'll need digital records and quarterly updates from the start of the 2026/27 tax year.

Worked example 2: Tom, the part-time plumber and landlord

Tom does plumbing work on the side and rents out one flat. His latest return shows £28,000 turnover from plumbing and £9,000 rental income.

• Qualifying income: £28,000 + £9,000 = £37,000 (self-employment plus property, added together).
• £37,000 is not over £50,000, so he misses the 2026 wave.
• But £37,000 is over £30,000.
• Tom is in scope from 6 April 2027.

This is why adding both sources together matters — neither figure alone would put Tom in scope, but combined they cross the £30,000 line.

A softer first year

There's a small piece of good news for the first wave. The 2026/27 tax year is a soft-landing year: HMRC won't issue late-submission penalty points on the quarterly updates for the £50,000 cohort. That gives you room to get used to the rhythm of quarterly reporting. Note the limit, though — the final declaration is still penalisable, so don't treat the whole year as consequence-free.

What to do if you're in scope

If the thresholds and examples above suggest you're affected:

1. Confirm it. Run your numbers through the MTD Scope Checker — it applies the exact "over" tests and the turnover rule for you, so you're not guessing.
2. Find your mandation date. Whether it's April 2026, 2027 or 2028 changes how much time you have.
3. Sort out digital record-keeping. You'll need compatible software to keep records and file quarterly updates.
4. Note the deadlines. 7 August, 7 November, 7 February, 7 May for the quarterly updates, and 31 January for the final declaration.

If you're employed as well as self-employed, read our guide on Making Tax Digital when you're employed and self-employed — your salary doesn't count towards the threshold, and that changes things considerably.

Frequently asked questions

Does Making Tax Digital apply to me if I'm just under £50,000? Not for the April 2026 wave. The test is strictly "over £50,000", so income of exactly £50,000 or below doesn't join the first group. If you're over £30,000 you'll be in scope from April 2027, and over £20,000 from April 2028.

Is the threshold based on my profit or my turnover? Turnover — your gross income before you deduct any expenses. Someone with £58,000 of sales and high costs can still be in scope even if their actual profit is modest. See our guide on whether the MTD threshold is gross income or profit.

Does my employed salary count towards the threshold? No. PAYE employment income is excluded, along with dividends, savings interest and pensions. Only self-employment and property income count, added together.

How does HMRC decide if I'm in scope? It looks back at your most recent Self Assessment return rather than predicting future income. That means you can check where you stand today using figures you've already filed.

What actually changes once I'm mandated? You move from one annual return to five submissions a year: digital records, four quarterly updates (due 7 Aug, 7 Nov, 7 Feb, 7 May) and a final declaration by 31 January after the tax year.

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Guidance only, not tax advice. Based on HMRC rules as at June 2026.

Related guides: Making Tax Digital when you're employed and self-employed · Is the MTD threshold gross income or profit? · What counts as qualifying income for MTD?