Am I in MTD Wave 1? Check the £50,000 threshold
You're in MTD Wave 1 if your gross self-employment and property income, combined and before expenses, was over £50,000 on your 2024/25 tax return. If so, MTD has applied to you since 6 April 2026.
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MTD Wave 1 is also called Phase 1 in some guidance and software. The threshold and start date are the same either way.
What this means for you
This Making Tax Digital for Income Tax test looks at gross income, turnover and rents before you deduct any expenses, added together across every self-employment and property business you have. Property business is HMRC's term for letting property. It's the combined total that matters, not any single business on its own.
Some income doesn't count towards this test at all. PAYE employment, dividends, savings interest and capital gains are all excluded, so a high salary alongside a small side business won't tip you into Wave 1 by itself.
The mistake people make is checking each business separately
A common trap: an electrician with £30,000 from self-employment and £25,000 from a rental property assumes neither is "the £50,000 one" and relaxes. Combined, that's £55,000, comfortably over the threshold. Add up everything before deciding you're not affected.
Common questions
Does income exactly at £50,000 count?
No. The test is strictly over £50,000. Exactly £50,000 does not put you in Wave 1 on that year alone.
What counts towards the £50,000?
Gross self-employment turnover plus gross property income (your own share if jointly owned), before expenses, combined across all your self-employment and property sources. PAYE employment, dividends, savings interest and capital gains are excluded.
What if my income is usually lower and 2024/25 was unusually high?
The test still applies to the year assessed. Wave 1 is decided on your 2024/25 return regardless of what earlier or later years looked like.
I am close to the threshold but not sure, what should I do?
Use the Start Date Checker. Enter your figures and it applies the combined, before-expenses test for you and shows your exact position.