Making Tax Digital for Property and Self‑Employment

What is Making Tax Digital (MTD) and who must comply?

MTD is a UK government initiative requiring certain taxpayers to keep digital records and submit quarterly updates of their income and expenses using HMRC‑compatible software. It applies to individuals with self‑employment and property income taxed under Income Tax Self Assessment when their income exceeds the relevant threshold.

What income threshold triggers MTD for property and self‑employment?

MTD rules apply to individuals whose relevant income exceeds £50,000. These rules cover self‑employment and property income taxed under Income Tax Self Assessment.

Does MTD apply to rental income held inside a limited company?

No. Rental income held inside a limited company is reported and taxed through the Corporation Tax process and is not part of the current MTD for Income Tax requirements. You do not need to sign up for MTD solely because a limited company receives rental income.

What should I do if I personally receive rental income outside a company?

If you personally receive rental income (outside a limited company) and it exceeds MTD thresholds, you must sign up and submit using HMRC‑compatible MTD software. Submissions for personal property income are made through MTD‑compatible software; if not using the provider referenced here, use another compatible product.

How do I prepare and submit my first MTD quarterly update?

1. Capture all rental activity: record all income and expenses for the relevant period (example period shown: 6 April to 5 July).
2. Connect your HMRC account: link your software account so quarterly updates can be sent directly to HMRC.
3. Review and submit: check the quarterly update for accuracy, then submit it to HMRC.

Follow those steps in the order listed to prepare and send your first quarterly update.

Do I need to report anything if I do not own a property yet?

If you do not have any property income to report, there is no property income to include in MTD submissions.

Troubleshooting: common issues and tips

• If you are unsure whether MTD applies, check your eligibility against the £50,000 threshold for property and self‑employment income.
• Ensure your records are digital and stored in HMRC‑compatible software before attempting to submit.
• Confirm your software is correctly connected to your HMRC account so updates can be transmitted.
• Review each quarterly update carefully before submission to avoid errors.

MTD requires eligible individuals to keep digital records and make quarterly submissions via HMRC‑compatible software. It applies to personal self‑employment and property income over £50,000, but not to rental income held inside a limited company, which remains subject to Corporation Tax processes. Follow the prepare → connect → review → submit sequence to complete your MTD quarterly updates.