Making Tax Digital income threshold to reduce by April 2028
UKPulse Money Desk
HMRC's Making Tax Digital (MTD) system, which began on April 6, requires digital record-keeping and quarterly submissions for those with untaxed gross income above a certain threshold. This threshold is set to decrease over the next two years.
- Making Tax Digital (MTD) requires digital records and quarterly submissions for those with untaxed gross income above a set limit.
- The current MTD threshold for sole traders or property rental income is £50,000.
- The MTD income limit is scheduled to reduce to £30,000 by April 2027 and £20,000 by April 2028.
The Making Tax Digital (MTD) system, introduced by HMRC, commenced on April 6. It mandates that individuals with an untaxed gross income exceeding £50,000 from sole trading or property rental must comply with its requirements.
Compliance involves maintaining digital records and submitting quarterly reports on the 7th of May, August, November, and February. HMRC assesses the previous year's gross income to determine if an individual meets the threshold for the following tax year.
The income limit for MTD is scheduled to decrease. It is set to reduce to £30,000 by April 2027 and further to £20,000 by April 2028. Only untaxed income is considered for these thresholds, excluding pension income.
What this means for you: If your untaxed gross income from sole trading or property rental exceeds the current or future thresholds, you will need to keep digital records and make quarterly submissions.