Do I Need MTD If I'm in a Partnership?

Written by Tom Ellis · Senior Trades Editor

Last updated: 7 November 2026

Quick Answer

I run my trade as a partnership. Does Making Tax Digital apply to me?

Not for the partnership, at least not yet. Partnerships are exempt from Making Tax Digital for Income Tax for now, and HMRC says it will set out their timeline later. Your share of the partnership's profit doesn't count towards your qualifying income either. But if you alsohave sole-trader work or rental income of your own, that turnover does count. If it's over the threshold, you're in MTD for those sources.

Got other income too? Leave the partnership out and enter your own sole-trader and rental turnover in the free Making Tax Digital checker.

Are partnerships exempt from MTD?

Yes, for now, and automatically. HMRC lists partnerships among the groups that don't have to use Making Tax Digital for Income Tax yet, saying "We'll set out the timeline… at a later date" ( GOV.UK: exemptions). You don't have to apply. The partnership keeps filing as it does today.

Does my partnership profit share count?

No. HMRC's qualifying income is self-employment turnover plus property income, before expenses. A partnership profit share is on the list of things left out, alongside PAYE wages, dividends and pensions (GOV.UK: qualifying income).

What does count is any business you run on your own account as a sole trader, and any rent you receive. For how the thresholds and dates work in general, see the MTD £30,000 threshold guide.

Worked example: a partner with a sideline and a rental

Sam is one of two partners in a roofing business. He also does small repair jobs on his own account and owns a flat he lets out.

Partnership profit share, 2025-26: £45,000. Doesn't count.
Own repair work turnover: £11,000. Counts.
Rent from the flat (he owns it alone): £9,600. Counts.
Qualifying income: £20,600, which is under £30,000, so he is not in from 6 April 2027.

But if his repair work and rent come to over £20,000 again in 2026-27, Sam is in from 6 April 2028for those two sources. He'd keep digital records and send quarterly updates for the repair work and for the flat. The roofing partnership stays outside MTD until HMRC brings partnerships in.

Could I be exempt from MTD altogether?

If your other income is over the threshold, the partnership exemption won't cover it. You are exempt automatically if you have no National Insurance number. You can also apply for a digital exclusion exemption if age, health or disability, a religious objection, or where you live (no internet access) stops you using software. Cost, or not knowing how to use software, isn't accepted on its own.

What to do next

Set the partnership aside and add up your own sole-trader and rental turnover for 2025-26. If you own a property jointly, count only your share.
Over £30,000 means you're in from April 2027 for those sources. If not, estimate 2026-27: over £20,000 means April 2028.
Keep the partnership's money and your own business separate, with their own bank accounts.
Watch GOV.UK for HMRC's partnership timeline.
Start digital records for your own income now. 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

Do partnerships have to use Making Tax Digital for Income Tax?

Not yet. Partnerships are exempt for now. HMRC says it will set out the timeline for partnerships at a later date and has not given one.

Does my partnership profit share count towards the £30,000?

No. A partnership profit share is not part of qualifying income, so it can't bring you into MTD on its own, however large it is.

I'm a partner and I also rent out a flat. Do I need MTD?

Only if your rental income (your share, if you own it jointly) plus any sole-trader turnover is over the threshold: over £30,000 in 2025-26 for April 2027, or over £20,000 in 2026-27 for April 2028. Rent counts before expenses.

Do I need to apply for the partnership exemption?

No. The partnership exemption is automatic. You only need to apply if you're claiming a different exemption, such as digital exclusion.

When will partnerships have to join MTD?

HMRC hasn't said. It has confirmed partnerships will join in future and that it will publish the timeline later, so keep an eye on GOV.UK.

Keep your own income ready for MTD.

Track the jobs and rent that are yours, separate from the partnership, with quarterly figures prepared as you go. The MTD records are free on every plan.

Try Sleepless Tradesman free