Going over £20,000: when MTD for Income Tax starts for you

acrenvo.com/guides/mtd-going-over-20000, last reviewed 31 October 2026

Marcus is fictional. He is a self-employed gardener, and in the 2026 to 2027 tax year his turnover was £18,500. Work has picked up since, and he expects the following year to come in at about £21,500. He has read that Making Tax Digital (MTD) for Income Tax reaches people with income over £20,000 from 6 April 2028. He wants to know whether that date is his, or whether his start date depends on something else.

The answer turns on three things: what HMRC counts as qualifying income, which tax year it looks at for each step, and how it tells you. This guide takes them in that order and then follows Marcus through both of his years.

What HMRC measures

Qualifying income is your total income from self-employment and property, before expenses (also known as turnover), based on the tax return you submitted in the previous tax year. That means your takings before any costs come off. All other sources of income do not count towards your qualifying income. GOV.UK’s examples of income left out are employment (PAYE), your share of profit from a partnership as an individual partner, dividends (including those from your own company), a State Pension and private pensions.

So income from employment (PAYE), meaning pay taxed through Pay As You Earn, sits outside the test altogether, which matters if you have a job as well as a business. The guide to side income alongside a job works through that case. If your first year of trading was shorter than a full year, the guide to starting partway through the year explains how HMRC scales the figure up.

Which tax year decides the 6 April 2028 step

GOV.UK pairs each step with one tax year. For the 6 April 2028 step, it names the 2026 to 2027 tax year: if your qualifying income for that year is over £20,000, you need to use MTD for Income Tax from 6 April 2028. HMRC assesses your qualifying income for a tax year by checking the Self Assessment tax return you submitted in the previous tax year, and you should also check your qualifying income yourself.

The guide to the April 2028 intake covers the people this step does bring in, including when their first quarterly updates fall. Their first year is set out in the MTD deadlines for 2028 to 2029.

If your qualifying income is at or below the line

GOV.UK lists low income as one of its automatic exemptions. You are automatically exempt and do not need to use Making Tax Digital for Income Tax if your qualifying income is £20,000 or less. These exemptions apply permanently and mean you will not need to use Making Tax Digital for Income Tax unless your circumstances change. If you are exempt, you will not have to use Making Tax Digital for Income Tax but you must continue to report your income and gains in a Self Assessment tax return as normal.

You can still sign up before you have to, and the guide to signing up voluntarily explains what that commits you to. One point is open, though. GOV.UK says you can sign up before you need to use the service, but it does not say whether someone whose qualifying income stays at or below the lowest threshold can volunteer. If that is your position, it is worth asking HMRC before you rely on it.

If your income goes over the line in a later year

The check does not happen once and stop. HMRC will review your Self Assessment tax return and check your qualifying income each tax year. If your income is above the relevant threshold HMRC will write to you, confirming that you need to start using Making Tax Digital for Income Tax by the start of the following tax year.

GOV.UK’s timeline names the tested tax years only up to 2026 to 2027, and it has not published a worked example for a later year. Its pattern for the steps it has named is to look at the tax year that starts two years before each start date, and HMRC reads that year’s return during the following year. If the same pattern carries on, a year over the line leads to a start date two years after that year began.

When HMRC writes, and when it does not

If HMRC reviews your return and finds your income is above the relevant threshold, it will write to confirm that you need to use Making Tax Digital for Income Tax by the start of the next tax year. Even if you do not receive a letter, you must still check your qualifying income to find out whether you need to use the service and sign up. Your income for the tested year is what sets the date, so a letter that never arrives does not move it.

If your income falls back below the line once you are using MTD, you do not drop out straight away. Once you start using the service, if your qualifying income drops below the relevant threshold for 3 tax years in a row, you can choose to opt out. The guide to opting out explains how that works.

Getting ready without paying much

The time between now and your own start date is the cheapest time to get organised, because there is no deadline to work to. Keeping your income and costs in a spreadsheet or an app now makes the move to quarterly updates smaller when it comes. The guide to the lowest-cost ways into MTD lists every free plan among the products we compare, and the software selector narrows them to the ones that fit how you work. The Am I in MTD? calculator checks your own figures against every step. Whatever you choose, GOV.UK’s advice is to always check with the software provider to make sure their software will meet your needs.

Questions people ask about going over £20,000