Question 1

Does Making Tax Digital apply to PAYE income?

Accepted Answer

No. MTD for Income Tax only applies to self-employed and property income. PAYE employment income does not count toward the threshold. A performer earning £30,000 from gigs and £25,000 from a PAYE job would only count the £30,000 self-employed income.

Question 2

Does teaching income count toward the MTD threshold?

Accepted Answer

Yes, if you are self-employed as a teacher. All self-employed income counts toward the MTD threshold — gigs, teaching, session work, and any other freelance earnings. Only PAYE income is excluded.

Question 3

What is the MTD threshold for 2026?

Accepted Answer

The MTD threshold from 6 April 2026 is £50,000 gross self-employed income. This is your total earnings before any expenses are deducted — not your taxable profit. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028.

Question 4

What is the difference between gross income and taxable profit for MTD?

Accepted Answer

Gross income is your total earnings before any deductions. Taxable profit is gross income minus allowable expenses. MTD thresholds are based on gross income, so a performer earning £52,000 gross who claims £18,000 in expenses has a taxable profit of £34,000 — but still falls under MTD from April 2026.

Question 5

I am under the MTD threshold — do I need to do anything now?

Accepted Answer

No immediate action is required for MTD. However, the threshold drops to £30,000 in April 2027 and £20,000 in April 2028. Getting digital records in place now means you will be prepared when your threshold arrives, with a full year of clean data already recorded.

Question 6

Does agency commission reduce my gross income for MTD purposes?

Accepted Answer

No. HMRC counts your full fee before commission is deducted. If an agency pays you £800 and takes £120 commission, your gross income is £800. Commission is an allowable expense that reduces your taxable profit, not your gross income for MTD threshold purposes.

Guidance, insights, and advice

MTD Quarterly Updates Explained: What to Submit, When, and How

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If gig admin is quietly stressing you out, this is for you.

If gig admin is quietly stressing you out, this is for you.

If gig admin is quietly stressing you out, this is for you.