From 6 April 2024, individuals with self-employment and/or rental income over £10,000 will be required to register for Making Tax Digital  for income tax (MTD ITSA). HMRC has now confirmed that the combined gross income that you earn in a tax year from self-employment and property income sources is considered when determining whether the £10,000 threshold is met.

 

For UK resident and domiciled people, worldwide sources of such income are taken into account. Whereas for non-UK domiciled people, only their UK sources of rental/self-employment income count towards the threshold. Interestingly, deemed domiciled individuals follow the same treatment as UK domiciled individuals, but income remitted from prior tax years where the remittance basis applied does not count towards the threshold. 

HMRC guidance also confirms that 2022/23 tax returns will be reviewed, and those with qualifying gross income over £10,000 will receive a letter informing them that they meet the requirements for MTD ITSA.

The updated guidance documents can be accessed here. However, it is worth pointing out that early comments on the update have been critical, including pointing out that part of the section on “using MTD for Income Tax” gives instructions which directly contradict the MTD ITSA Regulations! As such, it is likely that a further update will be made in due course.