From 6 April 2027, Making Tax Digital for Income Tax will apply to sole traders and landlords with qualifying income over £30,000. That is six months away. If this affects you, now is the time to get ready, rather than leaving it until the new tax year starts.
HMRC estimates that around 1,077,000 more sole traders and landlords will need to join Making Tax Digital (MTD) from April 2027. If you are one of them, the way you keep records and report your income to HMRC will change. Here is what you need to know, and how we can help.
Who needs to join from April 2027
MTD for Income Tax has applied to sole traders and landlords with qualifying income over £50,000 since 6 April 2026. From 6 April 2027, the threshold falls to £30,000. It is due to fall again to £20,000 from April 2028.
Qualifying income is your gross income from self-employment and property combined, before any expenses or allowances are deducted. For example, if you earn £18,000 from self-employment and £14,000 in rent, your qualifying income is £32,000. You would need to join from April 2027, even though neither income source is above £30,000 on its own.
HMRC will look at the figures in your 2025/26 tax return to decide whether you need to join from April 2027. That is another good reason to send us your Self Assessment information early, so we can confirm where you stand.
What changes under Making Tax Digital
Once you are in MTD for Income Tax, you will need to:
- Keep digital records of your self-employment and property income and expenses.
- Use software that works with MTD for Income Tax.
- Send HMRC a summary of your income and expenses every three months.
- Submit your tax return through the same software by 31 January following the end of the tax year.
The quarterly updates are short summaries of your income and expenses. They are not extra tax returns, and they do not change when you pay your tax. Your balancing payment and any payments on account remain due on the usual dates.
Key dates if you join from April 2027
| Requirement | Deadline |
|---|---|
| Start keeping digital records | 6 April 2027 |
| First quarterly update | 7 August 2027 |
| Second quarterly update | 7 November 2027 |
| Third quarterly update | 7 February 2028 |
| Fourth quarterly update | 7 May 2028 |
| 2027/28 tax return through MTD software | 31 January 2029 |
Your 2026/27 tax return, due by 31 January 2028, will still be filed in the usual way.
Already in MTD? Your next update is due on 7 November
If your qualifying income was over £50,000 and you joined MTD in April 2026, your second quarterly update for 2026/27 is due by 7 November 2026. Please make sure your records are up to date and that we have everything we need well before that date.
Why it pays to prepare now
You can sign up for MTD voluntarily before it becomes mandatory, as long as you are registered for Self Assessment and have submitted a tax return in the last two years. Signing up early gives you time to choose software, get used to keeping digital records and send your first updates while there is still room to ask questions.
Leaving it until April means learning a new system while the deadlines are already running. If your records are currently kept on paper or in a basic spreadsheet, the change is likely to take longer than you expect.
Preparing early also gives you a clearer picture of your income and expenses throughout the year. Up-to-date quarterly figures can make it easier to budget for your tax bill, in the same way that filing your tax return early does.
Exemptions
Some people are exempt from MTD for Income Tax, including those who are digitally excluded. That could be because of age, disability, location or another reason that makes using digital tools impractical. You need to apply to HMRC for an exemption. Please speak to us if you think this applies to you.
How we can help
We can confirm whether you need to join, and when. We can also sign you up, recommend suitable software, set up your digital records and prepare and submit your quarterly updates and tax return for you. That means you can keep your focus on running your business or managing your properties.
If your self-employment and property income together is more than £30,000, please contact us now. The sooner we start, the smoother your move to Making Tax Digital will be.