Only include genuinely self-employed sole trader income. Work inside IR35 or through your own limited company is treated differently.
If you work as a genuinely self-employed freelance project manager, contracting directly with clients as a sole trader, Making Tax Digital applies to you the same way it applies to any other self-employed person. Project management contracting has several different structures though, and it's worth being clear which one you're actually working under.
Yes, if your gross genuinely self-employed 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 day-rate or project fees received before expenses, software subscriptions and other costs are deducted afterwards, not before, when checking your threshold.
Freelance project management contracts are arranged in several different ways, and only one of them is reached by MTD for Income Tax:
| Expense Category | Examples |
|---|---|
| Software | Project management tools, time tracking, and reporting software |
| Professional development | PRINCE2, APM, or PMP certification and renewal costs |
| Travel | Mileage or travel to client sites, at the current HMRC rate |
| Use of home / office | Simplified flat rate, or a proportion of costs if you rent office space |
| Insurance | Professional indemnity insurance |
Nadia's inside-IR35 contract is already taxed at source and excluded entirely. Her £54,000 genuinely self-employed income exceeds the £50,000 Phase 1 threshold, so MTD already applies to her.
No. If a contract is inside IR35, tax and National Insurance are deducted at source by the client or agency, and that income is treated as employment income, not sole trader turnover, for MTD purposes.
The same as any genuinely 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.
No, not for MTD purposes. Company profits are taxed under Corporation Tax and dividend rules, which are outside MTD for Income Tax's current scope, only your genuine sole trader income is reached by it.
The engaging client or agency is generally responsible for making this determination and should provide you with a status determination statement. If you're unsure, it's worth confirming directly with them before assuming a contract's status.
Any HMRC-recognised MTD software works. The main practical need is separating genuine sole trader income from any inside-IR35 or umbrella PAYE contracts, which is a simple categorisation task in any standard software.
Our free calculator checks your exact threshold, deadlines, and recommends the easiest software for your record-keeping.
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