MTD £50,000 vs £90,000 Thresholds: What Each One Means

Making Tax Digital for Income Tax currently involves two prominent numbers: £50,000 and £90,000. They answer different questions, but it is easy to mistake one for the other.

The £50,000 figure helps decide whether you must use MTD from April 2026. The £90,000 figure helps decide how much detail each business or property source must keep and submit.

The distinction in one table

Figure	What it decides	How it is measured
More than £50,000	Whether MTD is mandatory from 6 April 2026	Combined qualifying income from all sole-trader and property sources
Less than £90,000	Whether a source can use simpler categorisation	Annual turnover for each individual income source

What the £50,000 MTD threshold means

For the 2026/27 tax year, HMRC looks at the qualifying income on your 2024/25 tax return. If the combined gross income from self-employment and property was more than £50,000, MTD for Income Tax is mandatory from 6 April 2026.

Gross means before expenses. It is turnover or rent received, not profit.

Qualifying income is combined across sources. For example:

• £38,000 sole-trader turnover plus £15,000 property income gives £53,000, so the person crosses the threshold.
• £48,000 sole-trader turnover plus £30,000 PAYE income gives £48,000 of qualifying income, so PAYE does not push the person over.
• Exactly £50,000 does not satisfy HMRC's wording of more than £50,000.

Read our full guide to MTD qualifying income for other included and excluded sources.

What the £90,000 limit means

HMRC allows simpler categorisation when the annual turnover of an individual self-employment or UK property source is less than £90,000.

For a qualifying sole trader using that route, quarterly updates can report total income and one consolidated expenses figure instead of a full expense-category split. UK residential property still needs restricted finance costs identified correctly in the records and submission.

If a source reaches £90,000, HMRC says its records must be categorised in full from the start of the tax year before the quarterly update is sent. Exactly £90,000 is therefore not under the limit.

The £90,000 test is applied to each source

This is where the two tests behave differently. The £50,000 MTD test combines qualifying income. The £90,000 simpler-categorisation test looks at each source.

Example 1: two sources, both under £90,000

A consultant has £82,000 turnover and a UK property business has £20,000 rent. Combined qualifying income is £102,000, so MTD applies. Each source is separately under £90,000, so each may use the simpler route if the other conditions are met.

Example 2: one source reaches £90,000

A builder has £92,000 annual turnover. MTD applies and that trade needs full categorisation. Flonancial's current simplified quarterly flow is not suitable for that trade.

Example 3: several smaller businesses

A photographer has £55,000 turnover and a separate catering trade has £45,000 turnover. The combined £100,000 means MTD applies, while each individual source remains under £90,000.

Where Flonancial fits

Flonancial's live quarterly service supports sole-trader and UK-property sources using the under-£90,000 simplified route. It sends cumulative income and consolidated-expense totals for each source separately.

It does not currently support category-split quarterly submissions for a source at or above £90,000. Being free has no pricing turnover condition, but the current submission format has this technical scope limit.

A quick decision check

1. Add gross self-employment and property income to decide whether MTD applies.
2. If the 2024/25 qualifying-income total was more than £50,000, you are in the April 2026 group.
3. Then examine the annual turnover of each business or property source separately.
4. If every source is under £90,000, the simpler route may be available.
5. If any source reaches £90,000, choose software that supports full categorisation for that source.

Check HMRC's official guides to qualifying income and simpler categorisation before choosing your submission route.