29/07/2026
The MTD threshold is not based on profit.
That one sentence catches out more sole traders than anything else about Making Tax Digital.
What actually counts is gross income. Turnover before a single expense comes off. Before materials, before mileage, before software, before use of home. It’s the figure on the self-employment pages of your return.
So the trade turning over £45,000 on £18,000 profit doesn’t feel like a business HMRC is watching. HMRC is looking at the £45,000.
And if you have more than one income stream, they’re added together. £35,000 from the trade plus £20,000 from a rental is £55,000 of qualifying income, even though neither figure crosses the line on its own.
The ones most likely to get blindsided are high-expense businesses. Trades. Anyone buying materials. Anyone running a van. Big turnover, modest profit.
Here’s what actually decides whether this hurts: quarterly reporting is only painful if your bookkeeping is retrospective. Records already up to date, and the update takes minutes. Records six months behind, and you’ve swapped one annual panic for four.
That’s the part we fix.
Comment MTD and we’ll send you the checker. Your turnover, your date, one page.
