{"id":27096,"date":"2026-04-17T15:44:53","date_gmt":"2026-04-17T15:44:53","guid":{"rendered":"https:\/\/www.moorethompson.co.uk\/blogs\/?p=27096"},"modified":"2026-04-17T15:44:55","modified_gmt":"2026-04-17T15:44:55","slug":"if-my-income-drops-will-i-still-need-to-manage-making-tax-digital-obligations","status":"publish","type":"post","link":"https:\/\/www.moorethompson.co.uk\/blogs\/if-my-income-drops-will-i-still-need-to-manage-making-tax-digital-obligations\/","title":{"rendered":"If my income drops, will I still need to manage Making Tax Digital obligations?\u00a0"},"content":{"rendered":"\n

By Craig Reid, Partner<\/em> <\/p>\n\n\n\n

Making Tax Digital (MTD) for Income Tax is now mandatory for sole traders, self-employed individuals and landlords with a qualifying income over \u00a350,000. <\/p>\n\n\n\n\n\n\n\n

However, if you are looking at your current financial situation and have realised that your income has fallen below that amount, you might be tempted to ignore MTD for the time being.  <\/p>\n\n\n\n

This can result in noncompliance if you incorrectly absolve yourself of MTD, so it is worth understanding how and when MTD obligations can be removed.  <\/p>\n\n\n\n

When is someone no longer impacted by MTD?<\/strong> <\/h3>\n\n\n\n

It might be tempting to think that if your income drops or is frozen entirely for a period of time, MTD no longer applies to you.  <\/p>\n\n\n\n

However, the obligations for MTD date back as far as the 2024\/2025 tax year. <\/p>\n\n\n\n

This means that if you had a qualifying income over \u00a350,000 in that year, you will need to carry on following MTD rules from 2026\/27, even if that income is now below the threshold.  <\/p>\n\n\n\n

Maternity leave is cited as the most common reason why a person may be in a position of heavily reduced income but have the expectation of restoring it in the near future.  <\/p>\n\n\n\n

To be fully MTD exempt, you need to demonstrate to HMRC that you will not be receiving a qualifying income going forward.  <\/p>\n\n\n\n

For landlords, this will likely be when property is sold, while sole traders and self-employed individuals will need to show that they no longer do the work they once did.  <\/p>\n\n\n\n

If you are in scope for MTD but are suffering a temporary setback in your income generation, you will need to stay compliant for three years. <\/p>\n\n\n\n

Only if your income falls below the threshold for three consecutive years will you be able to stop following MTD rules. <\/p>\n\n\n\n

This is further complicated by the fact that the thresholds themselves are falling, first to \u00a330,000 for the 2025\/26 tax year, which would start MTD in April 2027 and then to \u00a320,000 for the 2026\/27 tax year, which would start MTD in April 2028.  <\/p>\n\n\n\n

How do I stay MTD compliant?<\/strong> <\/h3>\n\n\n\n

If you are not able to make yourself exempt from MTD, then the new obligations will continue to apply to you.  <\/p>\n\n\n\n

This means adopting digital record keeping, submitting quarterly filings and submitting an annual return. <\/p>\n\n\n\n

It may be frustrating that these rules continue to apply even if your income is nil. <\/p>\n\n\n\n

However, the main aim of MTD is to streamline the tax process and allow for more consistent monitoring of your financial position throughout the year.  <\/p>\n\n\n\n

Our team can help you manage your MTD obligations, regardless of what is going on in your life. <\/p>\n\n\n\n

If you are on maternity leave or your business is struggling, we can help support your engagement with MTD so that you do not find yourself drawing the ire of HMRC. <\/p>\n\n\n\n

Get in touch<\/strong><\/a> to ensure that you are fully MTD compliant, no matter your personal circumstances. <\/strong> <\/p>\n","protected":false},"excerpt":{"rendered":"

By Craig Reid, Partner  Making Tax Digital (MTD) for Income Tax is now mandatory for sole traders, self-employed individuals and landlords with a qualifying income over \u00a350,000. <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,135,31,35,3,1],"tags":[],"class_list":["post-27096","post","type-post","status-publish","format-standard","hentry","category-blog","category-craig-reid","category-hmrc","category-making-tax-digital","category-tax","category-uncategorized"],"yoast_head":"\nIf my income drops, will I still need to manage Making Tax Digital obligations?\u00a0 - Moore Thompson<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.moorethompson.co.uk\/blogs\/if-my-income-drops-will-i-still-need-to-manage-making-tax-digital-obligations\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"If my income drops, will I still need to manage Making Tax Digital obligations?\u00a0\" \/>\n<meta property=\"og:description\" content=\"Making Tax Digital (MTD) for Income Tax is now mandatory for sole traders, self-employed individuals and landlords with a qualifying income over \u00a350,000.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.moorethompson.co.uk\/blogs\/if-my-income-drops-will-i-still-need-to-manage-making-tax-digital-obligations\/\" \/>\n<meta property=\"og:site_name\" content=\"Moore Thompson\" \/>\n<meta property=\"article:published_time\" content=\"2026-04-17T15:44:53+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-04-17T15:44:55+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.moorethompson.co.uk\/blogs\/wp-content\/uploads\/2026\/04\/Craig-Reid-Blog-28.08.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"512\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"If my income drops, will I still need to manage Making Tax Digital obligations?\u00a0\" \/>\n<meta name=\"twitter:description\" content=\"Making Tax Digital (MTD) for Income Tax is now mandatory for sole traders, self-employed individuals and landlords with a qualifying income over \u00a350,000.\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/www.moorethompson.co.uk\/blogs\/wp-content\/uploads\/2026\/04\/Craig-Reid-Blog-28.08.png\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.moorethompson.co.uk\/blogs\/if-my-income-drops-will-i-still-need-to-manage-making-tax-digital-obligations\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.moorethompson.co.uk\/blogs\/if-my-income-drops-will-i-still-need-to-manage-making-tax-digital-obligations\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\/\/www.moorethompson.co.uk\/blogs\/#\/schema\/person\/0d9cc808e7eb5eb75ce773e69c3d97fb\"},\"headline\":\"If my income drops, will I still need to manage Making Tax Digital obligations?\u00a0\",\"datePublished\":\"2026-04-17T15:44:53+00:00\",\"dateModified\":\"2026-04-17T15:44:55+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.moorethompson.co.uk\/blogs\/if-my-income-drops-will-i-still-need-to-manage-making-tax-digital-obligations\/\"},\"wordCount\":556,\"articleSection\":[\"Blog\",\"Craig Reid\",\"HMRC\",\"Making Tax Digital\",\"Tax\",\"Uncategorized\"],\"inLanguage\":\"en-GB\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.moorethompson.co.uk\/blogs\/if-my-income-drops-will-i-still-need-to-manage-making-tax-digital-obligations\/\",\"url\":\"https:\/\/www.moorethompson.co.uk\/blogs\/if-my-income-drops-will-i-still-need-to-manage-making-tax-digital-obligations\/\",\"name\":\"If my income drops, will I still need to manage Making Tax Digital obligations?\u00a0 - 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