HOW DO HMRC DECIDE IF I NEED TO DO MAKING TAX DIGITAL?
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Making Tax Digital Turnover Threshold 2024/25 – Which Year Decides If You Must Join?
If you are a sole trader or landlord, the most important question right now is:
Which tax year determines whether you must join Making Tax Digital (MTD) for Income Tax in April 2026?
The answer is clear:
👉 Your 2024/25 tax year income (6 April 2024 to 5 April 2025).
For the April 2026 start date, HMRC will look at your completed 2024/25 Self Assessment return.
Not 2023/24.
Not your current year.
Not an estimate.
The Making Tax Digital £50,000 Threshold
From April 2026, you must join Making Tax Digital for Income Tax if your qualifying income exceeds £50,000 in the 2024/25 tax year.
This threshold is based on gross income before expenses, not profit.
Qualifying income includes:
- Sole trader business turnover
- Property rental income
If you have both, the income is combined.
If You Are a Sole Trader
For sole traders, turnover means your total business income before expenses.
This includes:
- Cash sales
- Invoiced income
- Ecommerce sales
- Card payments
- Bank transfers
If your gross business turnover for 2024/25 exceeds £50,000, you will be required to use HMRC-compatible software and submit quarterly updates from April 2026.
If you want a full practical explanation of how this works in real life — including step-by-step bookkeeping guidance with worked examples — see:
Making Tax Digital 2026 for Sole Traders
This guide explains:
- How to determine if you are mandated
- How to record gross sales correctly
- How digital bookkeeping works in practice
- How quarterly updates are submitted
- How to complete the Final Declaration
It is written specifically for sole traders who want clear, plain-English instructions.
If You Are a Landlord
Landlords are also included in Making Tax Digital for Income Tax.
If your gross rental income exceeds £50,000 in 2024/25, you will fall within MTD from April 2026.
Rental income is assessed before expenses.
If you want a clear explanation of:
- Digital record-keeping for property income
- Quarterly updates for landlords
- How the Final Declaration applies to rental income
See:
Making Tax Digital 2026 for Landlords
This guide provides structured, practical guidance designed specifically for property owners.
If You Are Both a Sole Trader and a Landlord
If you have both business income and rental income, the figures are combined.
You must add:
Gross business turnover
+
Gross rental income
If the combined total exceeds £50,000 in 2024/25, you must join MTD from April 2026.
This combined threshold rule is one of the most common areas of misunderstanding.
Key Summary – 2024/25 MTD Entry Rule
For April 2026:
• The relevant tax year is 2024/25
• The threshold is £50,000
• It is based on gross income
• Sole trader and rental income are combined
Understanding this properly removes much of the confusion around Making Tax Digital.
If you want the complete step-by-step breakdown tailored to your situation, choose the guide that applies to you:
• Making Tax Digital 2026 for Sole Traders
• Making Tax Digital 2026 for Landlords
Both explain the process clearly, with practical bookkeeping examples and structured guidance from registration through to Final Declaration.
