Making Tax Digital (MTD) for Income Tax. Are you eligible to take part in the MTD Pilot?
UPDATE: HMRC has re-opened the pilot to new participants.
At a glance
- Taxpayers and their agents can sign up and participate in a voluntary Making Tax Digital (MTD) for Income Tax pilot scheme.
- Signing up to the Pilot will mean that you will allow your software to transmit your accounting data to HMRC every three months.
- Only certain taxpayers are currently eligible to participate.
Are you eligible to take part?
Use our MTD pilot: eligibility checker to check whether you can sign up to volunteer under the pilot scheme.
Recent changes
After pausing the pilot in February 2023, HMRC have now confirmed that the MTD pilot will expand from April 2024. A larger but still restricted pool of sole traders and landlords will be able to volunteer.
Making Tax Digital for Income Tax is currently voluntary. It will become Mandatory from 6 April 2026 in phases based on your total annual income from self-employment or property. Taxpayers can either:
- Volunteer to use the service now (for self-employment and property income sources), or
- Continue to send self-assessment tax returns as normal, and sign up to MTD for income tax when it becomes mandatory.
Most sole traders and landlords will be able to volunteer for the MTD pilot from April 2025.
The Government is keeping plans for extending MTD to sole traders and landlords with income below £30,000 under review.
Data has show that in the three years since the pilot scheme began 1015 people have participated, of these, only 218 or approximately 21% are landlords with property income. The numbers have fallen dramatically since the first year, 2018-2019, from 877 to 26 in 2020-2021 and as of January 2022, only nine were participating.
MTD pilot: eligibility checker
| Are your personal details up to date with HMRC? | No → |
You cannot join the MTD pilot as you do not fulfil the current criteria. |
| Yes ↓ | ||
Are you UK resident? |
No → |
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| Yes ↓ | ||
| Do you have a National Insurance number? | No → |
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| Yes ↓ | ||
Are you Registered for Self-Assessment? |
No → |
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| Yes ↓ | ||
Have you submitted at least one Self-Assessment tax return? |
No → |
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| Yes ↓ | ||
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No → |
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| Yes ↓ | ||
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Does your business/both your businesses have a 5 April year-end? Or Does your business or your businesses have an accounting period that runs from 1 April to 31 March? and does your software support this? |
No → |
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| Yes ↓ | ||
Was one or more of the following included within the last tax return?:
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No → |
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| Yes ↓ | ||
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Do you have to report any of the following other types of taxable receipts from:
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Yes → |
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| No ↓ | ||
| Do you claim Married Couple's Allowance and/or Blind Person's Allowance | Yes → |
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| No ↓ | ||
| Do you have any income tax charges, e.g. HICBC, pension charges? |
Yes → |
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| No ↓ | ||
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Do you have a payment arrangement in place? |
Yes → |
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| No ↓ | ||
| Are you in a partnership? | Yes → |
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| No ↓ | ||
| Are you currently, or going to be, insolvent or bankrupt? | Yes → |
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| No ↓ | ||
| Are you a MP, Minister of religion, Lloyds underwriter, foster carer or in a shared lives scheme? | Yes → |
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| No ↓ | ||
| Are you subject to a compliance enquiry? | Yes → |
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| No ↓ | ||
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Are you using ‘averaging’ or other arrangements because your profits vary between years — for example, because you’re a farmer, writer or artist |
Yes → |
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| No ↓ | ||
Are you signing up on behalf of someone else (unless you’re an agent) — this includes but is not limited to if you’re:
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Yes → |
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| No ↓ | ||
Are you using, or going to start using functional compatible software that will allow you to report quarterly to HMRC? |
No → |
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| Yes↓ | ||
Is the taxable turnover from your business/businesses above £30,000? |
No → |
Your business may not be big enough to be mandated into MTD. MTD will apply to your first accounting period that starts on or after 6 April 2026, if the taxable turnover from your self-employed business or income from property is above £50,000, or 6 April 2027, if your taxable turnover from your self-employed business or income from property is above £30,000. If you know that your income is less than £30,000, and is unlikely to exceed that level then MTD is voluntary for you. You can sign up to the Pilot if you wish to. |
| Yes↓ | ||
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You have met the basic qualifying conditions to be able to join the MTD for Income Tax pilot. See the next tab. |
MTD: At a glance
What does MTD for Income Tax mean?
Under Making Tax Digital for Income Tax (MTD), self-employed and property landlords are required to use software in order to keep digital records, report quarterly to HMRC and submit an annual tax return.
Unless exempt, It will be mandatory for sole traders and landlords to sign up for MTD:
- From 6 April 2026 (delayed from April 2024) for sole traders and landlords who earn income of more than £50,000 (previously £10,000).
- From 6 April 2027 for sole traders and landlords who earn income of more than £30,000.
- No date has yet been given for partnerships to join.
- Taxpayers have a potential minimum of five interactions with HMRC per year.
- Taxpayers are required to use functional compatible software: your accounting data will be used to access your business income.
- You will not need to provide further information unless, of course, you need to try and correct errors.
- There will be a final tax return (called a year-end declaration) at the year-end, which will include any claims and elections.
Sole traders and landlords will be exempt from MTD, if they are:
- A trustee, including a charitable trustee or a trustee of non-registered pension schemes,
- Person that does not have a National Insurance number,
- Personal representative of someone who has died,
- Lloyd’s member, in relation to your underwriting business, or
- Non-resident company
- You apply for an exemption and can show that it’s not reasonable or practical for you to use computers or the internet.
For full details MTD Toolkit for Accountants
HMRC's MTD Pilot
This is a test pilot and it may well be that aspects of the service will change.
You must use commercial software: HMRC will not provide any free software. For information about the software available please see Compare software for Making Tax Digital for Income Tax.
After pausing the pilot in February 2023, HMRC have now confirmed that the MTD testing pilot will expand from 22 April 2024. A larger but still restricted pool of self-employed tax payers and landlords will be able to volunteer.
Making Tax Digital for Income Tax is currently voluntary. Eligible taxpayers who wish to participate in MTD for 2024/25 should sign up for the MTD pilot between April and June 2024.
Before signing up you should
- Check that you are eligible (Use our tool, see tab MTD pilot: eligibility checker).
- Choose the Software that you want to use.
- Sign up to MTD with HMRC.
- Authorise your compatible software, by entering your Government Gateway ID and password.
If you are using an agent, they must be Authorised to act on your behalf. Once authorised, your agent can sign up your business, use software to create, store digital records, edit and send data to HMRC.
The Pilot is not recommended for
- Taxpayers with a poor understanding of IT.
- Taxpayers with a poor understanding of bookkeeping.
- Those who do not have a reliable broadband connection.
- Those who will not be available at least on a quarterly basis to send in data.
- VAT registered traders.
- Traders and landlords with a low income.
Ask your adviser if you decide to take part in this pilot and wish to delegate to them.
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