Use gross booking income before food, laundry, and cleaning costs are deducted.
If you run a bed and breakfast or guesthouse, providing rooms along with breakfast, cleaning and fresh linen, Making Tax Digital applies to you the same way it applies to any self-employed sole trader. This is worth being clear about, because it's genuinely different from simply letting out a property, which our landlords guide covers.
Yes, if your gross trading income, plus any other self-employment income, exceeds the relevant threshold:
| Tax Year Assessed | Threshold | MTD Start Date |
|---|---|---|
| 2024–25 | Over £50,000 | 6 April 2026. Live since April 2026 |
| 2025–26 | Over £30,000 | 6 April 2027 |
| 2026–27 | Over £20,000 | 6 April 2028 |
Your gross income is your total booking income before expenses, food, laundry, and cleaning costs are all deducted afterwards, not before, when checking your threshold.
If you're unsure whether your setup counts as trading or property income, the level of personal service you provide is the key factor, a full cooked breakfast and daily room servicing looks like a trade; a self-check-in cottage with no services looks like property income.
| Expense Category | Examples |
|---|---|
| Breakfast and food | Ingredients and supplies for guest breakfasts |
| Laundry and linen | Washing, replacement linen, and towels |
| Cleaning | Cleaning products, or a cleaner's wages if you employ one |
| Property running costs | Heating, utilities, and maintenance for guest areas |
| Booking platform fees | Commission paid to Booking.com or similar platforms |
Fiona's £62,000 gross booking income exceeds the £50,000 Phase 1 threshold. Platform commission is claimed separately as an expense, it isn't deducted from the gross figure used for her threshold check.
Not usually. A genuine B&B with services, breakfast, cleaning, fresh linen, is generally treated by HMRC as a trade, reported as trading income, not as UK property income. A self-check-in let with minimal services is more likely to be treated as property income instead.
The same as any self-employed sole trader: over £50,000 gross income in 2024–25 means MTD from April 2026, over £30,000 in 2025–26 means April 2027, over £20,000 in 2026–27 means April 2028.
Your gross booking income, before any commission a booking platform deducts. The commission is then claimed back separately as a business expense.
Yes, food and breakfast supplies, laundry and linen costs, and cleaning products or a cleaner's wages are all standard allowable expenses for a B&B or guesthouse business.
Any HMRC-recognised MTD software works. The main practical need is recording gross booking income and platform fees separately, which most hospitality-focused accounting apps handle well.
Our free calculator checks your exact threshold, deadlines, and recommends the easiest software for your record-keeping.
Run Free MTD Check →