Autumn Budget 2024 extends Making Tax Digital for Income Tax to those with qualifying income over £20,000

The Autumn Budget 2024 announced that Making Tax Digital for Income Tax will be extended to sole traders and landlords with qualifying income over £20,000 by the end of this Parliament¹. The measure widens the existing programme, which already brings larger sole traders and landlords into digital reporting on a staged timetable¹.

Making Tax Digital for Income Tax applies to sole traders and landlords registered for Self Assessment who receive income from self-employment, property, or both, where qualifying income exceeds the relevant threshold for the tax year¹. The start date depends on qualifying income in a given tax year¹:

HMRC says it reviews each Self Assessment tax return and checks qualifying income every tax year, writing to taxpayers whose income is above the relevant threshold to confirm they must start using the service by the start of the following tax year¹. The guidance states that if no letter is received, it remains the taxpayer's responsibility to check whether and when they need to use Making Tax Digital for Income Tax and to be signed up and prepared¹. To sign up, a taxpayer must be registered for Self Assessment and have submitted a tax return in the last two years¹. A Self Assessment tax return is still required for the tax year before starting to use Making Tax Digital for Income Tax¹.

Some taxpayers may be exempt, for example if they are digitally excluded; those who are exempt do not need to use Making Tax Digital for Income Tax but must continue to report income and gains through a Self Assessment tax return¹. Partnerships will also need to use Making Tax Digital for Income Tax in future, with the timeline to be set out at a later date¹. For people who are resident or domiciled outside the UK, the rules apply only to their UK self-employment and property income¹.

Why it matters for households

The extension brings smaller sole traders and landlords into digital record-keeping and quarterly reporting to HMRC, rather than the single annual Self Assessment return. The £20,000 threshold applies to qualifying income for the 2026 to 2027 tax year, with the start date of 6 April 2028¹. Those with qualifying income over £50,000 for 2024 to 2025 were due to start from 6 April 2026, and those over £30,000 for 2025 to 2026 from 6 April 2027¹. Affected households will need to keep digital records and use compatible software, or appoint an agent, and will still file a Self Assessment return for the year before they start¹. Exemptions exist, including for digital exclusion, but exempt taxpayers must keep reporting through Self Assessment¹. Penalty points and late payment penalties apply under the regime, and separate guidance covers Making Tax Digital penalty points and late payment penalties.

What happens next

HMRC reviews Self Assessment returns each year and writes to those above the threshold, confirming they must start using the service by the start of the following tax year¹. The guidance says taxpayers who believe they should be signed up but have not received a letter should use HMRC's online tool to check, speak to their tax agent if they have one, or check with a relative or friend who helps with their tax¹. Those who disagree with HMRC's assessment should contact HMRC¹. The timeline for partnerships has not been reported¹. Further detail on who must join and when is set out in Making Tax Digital for Income Tax: who must join and when, with exemptions covered in Digital exclusion exemption from Making Tax Digital.