Do I Need MTD If I'm Employed and Self-Employed?

Written by Tom Ellis · Senior Trades Editor

Last updated: 7 November 2026

Quick Answer

I have a PAYE job and do trade work on the side. Does Making Tax Digital apply to me?

Only if your self-employment (and any property) turnover is over the threshold. Your PAYE wages don't count towards Making Tax Digital at all. HMRC looks only at turnover before expenses from self-employment and property. So someone on a £40,000 salary with £18,000 of side-work turnover is not in MTD from April 2027, because £18,000 is under £30,000. They will be in from April 2028 if their 2026-27 side-work turnover is over £20,000.

Check your own figures: put your side-work turnover (leave your salary out) into the free Making Tax Digital checker.

Does my salary count towards the £30,000?

No. HMRC calls the figure that decides whether you join "qualifying income". It is your self-employment turnover plus your property income, both taken before expenses. HMRC lists what is left out: PAYE employment income, a partnership profit share, dividends, and State or private pensions (GOV.UK: work out your qualifying income).

Your job carries on exactly as now: tax comes off through PAYE and your employer does nothing different. MTD only ever touches the self-employed side. For the general rules and who joins when, see the MTD £30,000 threshold guide.

Worked example: a £40k job and £18k on the side

Dan is a maintenance electrician employed on £40,000 a year. Evenings and weekends he does private rewires and repairs on his own account.

PAYE salary: £40,000. Doesn't count.
Side-work turnover, 2025-26: £18,000. Counts.
Qualifying income for April 2027: £18,000, which is under £30,000, so he is not in from 6 April 2027.
Side-work turnover, 2026-27: £21,500, which is over £20,000, so he is in from 6 April 2028.

Two things catch people out. First, it is turnover, not profit: if Dan spends £6,000 of that £21,500 on cable and consumer units, the figure is still £21,500. Second, the year that decides April 2028 is 2026-27, the tax year running right now. If his side work stays at or under £20,000, he isn't required to join in April 2028 either. The cohorts are set out on GOV.UK.

If you are in, what does MTD cover?

Only your self-employed work (and any rental income, which gets its own updates). You keep digital records of that income and its expenses, then send HMRC a quarterly update of the running totals by 7 August, 7 November, 7 February and 7 May. No tax is paid with them.

At the year end you file your tax return (previously called the final declaration) through MTD software by 31 January. That is where your job comes back in: HMRC pre-fills your PAYE figures, so wages and side work are taxed together as now. See the MTD deadlines guide for exact dates.

Can having a job get me an exemption?

No. You are exempt automatically if you have no National Insurance number. You can also apply to be treated as digitally excluded if age, health or disability, a religious objection, or where you live (no internet access) means you can't use software. Cost, or not knowing how to use software, isn't accepted on its own (GOV.UK: exemptions).

What to do next

Find your 2025-26 self-employment and property turnover. Leave your salary out. Over £30,000 means you're in from April 2027.
Estimate your 2026-27 side-work turnover. Over £20,000 means you're in from April 2028.
Keep side-work income and expenses separate from your wages and personal spending, ideally on their own bank account or card.
Start digital records now so the switch is a non-event. In Sleepless Tradesman the MTD records (expenses, cash and CIS income, mileage, tax set-aside and quarterly figures) are free on every plan. Your figures are ready to export for you or your accountant to submit. Sending them to HMRC directly from the app is coming once HMRC approves it.

Frequently asked questions

Does my PAYE salary count towards the MTD threshold?

No. HMRC's qualifying income for Making Tax Digital is your self-employment turnover plus your property income, both before expenses. Wages from a job taxed through PAYE are left out completely, however much you earn.

I earn £45,000 from my job and £10,000 from side work. Do I need MTD?

Not on those figures. Only the £10,000 counts, which is under both the £30,000 threshold for April 2027 and the £20,000 threshold for April 2028. If your side-work turnover grows past £20,000 in a tax year, check again.

Is it my side-work profit or turnover that counts?

Turnover. HMRC uses the amount before expenses, so materials, fuel and tools are not taken off first. £21,000 invoiced with £7,000 of materials is £21,000 of qualifying income.

Will my wages go in my quarterly updates?

No. Quarterly updates only cover your self-employment and any property income. Your job stays on PAYE, and HMRC pre-fills your PAYE figures on your year-end tax return.

Is there an exemption for people who are only part-time self-employed?

No. Having a job, or only working for yourself part-time, is not a reason for exemption. The test is purely whether your self-employment and property turnover is over the threshold.

Keep your side-work records straight from today.

Invoices become income, receipts become expenses, and your quarterly figures stay ready. The MTD records are free on every plan.

Try Sleepless Tradesman free