Questions 3 and 4 of FOI-2025/162436 examine HMRC’s automated processes for calculating qualifying MTD ITSA income and for excluding taxpayers under the cessation rules and related criteria.
The analysis highlights several areas of uncertainty.
Please confirm that qualifying income is calculated from the total of the following fields on the Self Assessment forms: SA103F/S business income, SA105 UK property income, and SA106 foreign property income.
Self-Employment Turnover - either SA103F - Box 15 or SA103S - Box 9 or SA200 box 3.6 [Gross trading or professional receipts]
Self-Employment Other Income - either SA103F - Box 16 or SA103S - Box 10 [Other self-employment income (not turnover, but still taxable)]
UK Property Income - either SA105 Box 20 or SA200 box 6.1 [Total rents and other receipts from UK property]
Other UK Property Income (grant of lease) - SA105 Box 22 [Income from lease premiums and similar items]
Other UK Property Income (reverse premiums) - SA105 Box 23 [Reverse premium receipts (tenant incentives)]
(For 2024/25 only) Furnished Holiday Let (FHL) Income - SA105 Box 5 [Gross receipts from UK FHL properties]
Foreign Property Gross Income - SA106 Box 14 [Gross rental income from overseas properties]
Foreign Property Income (premiums) - SA106 Box 16 [Reverse premium receipts from foreign property]
We can confirm that the qualifying income is calculated from the total of the fields as listed.
Please confirm whether any automated system process identifies cessation markers in SA103, SA200, SA105 or SA106 data for the purpose of excluding taxpayers from MTD onboarding, and if so, which data fields are referenced? If such automated processes exist, please identify any schema or data‑flow documentation describing them.
HMRC operates automated systems that detect cessation markers in Self-Assessment data. These systems are part of the broader MTD ITSA migration and compliance architecture and include Cessation Markers in SA Returns and the MTD Migration Logic. We have outlined the relevant processes and logic below. There are broadly two scenarios:
Scenario 1 - There is an annual check (part of Obligation Rules Management) that looks at the most recent position that HMRC hold for the customer. If the customer completes their tax return advising that they have ceased self-employment, then this will be identified.
Or
Scenario 2 - The steps and data refenced below are for the second scenario, where we migrate to replicate MTD sign up and enable application of penalty points to customers during the first year.
The MTD on-boarding process will identify the correct population by calculating the sum of the customers income from the Self-Assessment Return from the following boxes:
1. Self-Employment Turnover: Box 9 on SA103S / Box 15 on SA103F
2. Self-Employment Other Income: Box 10 on SA103S / Box 16 on SA103F
3. UK Property Income: Box 20 on SA105
4. Other UK Property Income (Grant or Lease): Box 22 on SA105
5. Other UK Property Income (FHL): Box 5 on SA105
6. Foreign Property Gross Income: Box 14 on SA106
7. Foreign Property Income (Premiums): Box 16 on SA106
A final check is made to determine the mandation status before MTD on-boarding:
8. Monitor mandated status upon return amendment (Amended captured return) check any amendments to CY-2 impact mandated threshold test:
9. Check for active income sources (SA103S/SA103F/SA105/SA106) Mandated if active income still present
10. Check total mandatable income vs threshold e.g. 50,000 for 2026/27
11. Lloyd’s Member on latest return (SA103L)
12. Fails control list/eligibility checks
13. Already Onboarded to MTD ITSA
14. Age < 15 years 9 months on 31 Jan before tax year
15. TRN or null identifier (NINO field format)
16. Deceased flag present
17. Final Return Year populated
18. Insolvent status
19. Digitally excluded (signal)
20. MTD exemption granted (signal)
21. Re-determine status if control list rules change before tax year (flexibility to re-determine status if policy changes)
The HMRC response to Question 7 noted that there is no cessation notification on the SA106. A post budget article in AccountingWeb indicates that taxpayers will shoulder the responsibility for deciding which qualifying businesses must be registered for MTD ITSA.
These points raise a question about the audit process described in the answer to Question 4, as HMRC will not know with certainty which qualifying businesses ceased in 2025/26 or the status of any SA106 income.
Additionally, there are small discrepancies between the answers to Questions 3 and 4 regarding which qualifying income fields are used. Some fields highlighted in Q3 do not appear in Q4.
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