Does Making Tax Digital apply to partnerships? [2026 updates]

Team Nomi

Aug 17, 2026
5 minutes read

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Does Making Tax Digital apply to partnerships? Not currently. Partnerships do not currently need to use Making Tax Digital (MTD) for Income Tax, but HMRC plans to bring partnerships into the system in the future. No mandatory start date has been announced yet.

This can be confusing because MTD for Income Tax is already being introduced for some sole traders and landlords from 6 April 2026. Individual partners also need to understand how their other income may affect their own MTD obligations.

In this blog, we’ll explain whether MTD applies to partnerships, what the rules mean for individual partners, whether LLPs are included, how MTD for VAT is different, and how partnerships can prepare.

Does Making Tax Digital apply to partnerships?

No. Partnerships do not currently need to use MTD for Income Tax.

HMRC has confirmed that partnerships will need to use MTD for Income Tax in the future, but it has not yet announced when this will become mandatory. Partnerships are currently listed as an automatic exemption from MTD for Income Tax.

This means a partnership does not currently have to:

• • Keep its partnership records under MTD for Income Tax.
  • Send quarterly MTD updates for partnership income.
  • Use MTD-compatible software for its partnership income.
  • Submit its partnership tax information through the MTD for Income Tax system.

However, other tax rules may still apply. For example, a VAT-registered partnership may already need to follow MTD for VAT.

Making Tax Digital for Partnerships

Understanding the current rules can help partners prepare for future changes and avoid confusion about whether MTD applies to them.Here are the current positions for partnerships and their individual partners.

This thing is that partnership income and an individual partner’s other income are treated differently under the current MTD rules.

When will MTD apply to partnerships?

HMRC has confirmed that partnerships will need to use MTD for Income Tax in the future. However, there is currently no confirmed mandatory start date for partnerships.

The current MTD rollout dates apply to sole traders and landlords:

These thresholds are based on qualifying income from self-employment and property. They should not be treated as confirmed MTD thresholds for partnerships. HMRC will announce the partnership timetable separately.

Therefore, if you run a partnership, you do not currently need to start MTD for Income Tax simply because your partnership income is above £50,000, £30,000 or £20,000.

How can partnerships prepare for MTD?

Even though partnerships are not currently required to use MTD for Income Tax, preparing early can make a future transition easier.

1. Start keeping digital records: Move away from relying entirely on paper invoices, receipts and spreadsheets. Digital records can make it easier to track partnership income and expenses.
2. Review your accounting software: Check whether your accounting software supports the MTD requirements you already need to follow, particularly if the partnership is VAT registered.
3. Keep partnership and personal income separate: Partners should clearly separate partnership income from their own sole-trader, property or other income.

This makes it easier to understand whether an individual partner could have separate MTD obligations.

4. Check each partner’s tax position: Do not assume that all partners have the same MTD position.

One partner may have other qualifying income while another may only receive partnership income.

5. Monitor HMRC updates: HMRC has not yet announced when partnerships must start using MTD for Income Tax.

Keep checking for official updates so you have enough time to prepare when the timetable is announced.

Conclusion

Making Tax Digital for Income Tax does not currently apply to partnerships. HMRC plans to include partnerships in the future, but there is no confirmed start date yet.

For now, partnerships should focus on their existing tax obligations, including MTD for VAT where applicable. Individual partners should also check whether they have separate self-employment or property income that could bring them into MTD.

As HMRC publishes more details about the partnership rollout, businesses should review their accounting systems and digital record-keeping processes so they are ready for the change.

Note: This blog is for general informational purposes only and does not constitute professional accounting advice. For specific guidance, please consult a qualified accountant.

Frequently Asked Questions

1. Will MTD for Income Tax affect all types of partnerships?
Ans: Yes. However, general partnerships are the likely first group, with LLPs and other complex partnerships following later once the timeline is announced.

2. Will MTD apply if my partnership is not VAT registered?
Ans: Yes, but only when MTD for Income Tax is introduced for partnerships. MTD for VAT applies only to VAT-registered businesses, including partnerships. MTD for Income Tax will eventually apply to qualifying partnerships, regardless of VAT status.

3. What’s the threshold for MTD for partnerships?
Ans: Threshold details for partnerships are expected to mirror the self-employment thresholds (£50,000, decreasing to £30,000 and then potentially £20,000 by future dates), but this has not been definitively confirmed by HMRC yet.

4. Can partnerships volunteer for MTD before it’s compulsory?
Ans: Yes, partnerships can choose to sign up early and start using MTD voluntarily, beneficial for those wanting to get ahead of potential admin and compliance issues.