Turn over more than £30,000? Making Tax Digital starts April 2027
For sole traders and landlords with more than £30,000 turnover in 2025 to 2026: what changes on 6 April 2027, why there is no penalty-free first year, and what to do before then.
What changes on 6 April 2027?
In less than six months, Making Tax Digital reaches the £30,000 group. On 5 October 2026 HMRC said there are "just six months to go" until sole traders and landlords with a turnover of more than £30,000 must use Making Tax Digital (MTD) for Income Tax. What you will do differently: keep digital records, and use compatible software to send HMRC quarterly updates of your income and expenses, then complete your tax return. HMRC says the quarterly updates "are not additional tax returns, but short summaries". How many: "around 1,077,000 more sole traders and landlords", based on HMRC's analysis of 2024 to 2025 Self Assessment returns. What comes next: "The threshold will decrease further to £20,000 from April 2028". Think of it as moving from a shoebox once a year to a quick check-in every three months. The work is the same receipts. The rhythm is new.
Who is in from April 2027 (and who isn't)?
You are in if your qualifying income was over £30,000 in the 2025 to 2026 tax year. That is the return due by 31 January 2027. HMRC's eligibility page says it will check your return and "write to you" if you are over. Here's the catch: it is turnover, not profit. Qualifying income is "your total income from self-employment and property. This is the amount before expenses (also known as turnover)" (gov.uk). Self-employment and rent are added together. HMRC's own example: £25,000 rent plus £27,000 from self-employment makes £52,000. So the mobile beautician, the electrician or the market trader can be in even if what is left after costs is far lower. Not counted: employment (PAYE) income, your share of profit as a partner, dividends, including from your own company, and pensions. Partnerships join later, date not yet set. Limited companies are outside MTD for Income Tax. Some people are exempt, for example if they are "digitally excluded". Already over £50,000 in 2024 to 2025? You have been in since 6 April 2026.
What should you do before April 2027?
Check your turnover now, and plan for penalty points from day one. For this year's first group, gov.uk says: "There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year." The £30,000 group starts in 2027 to 2028. Read against HMRC's penalties page, that means points apply from your first missed update. Each missed deadline is a point. At 4 points you pay a £200 penalty, and £200 for every further miss. Note the standard quarterly deadlines: 7 August, 7 November, 7 February, 7 May.
- ✓Add up your 2025 to 2026 turnover from self-employment and property, before expenses. Over £30,000? You are in.
- ✓Send your 2025 to 2026 return on time (by 31 January 2027 online). gov.uk: you still file the return for the year before you start.
- ✓Choose compatible software and test it on a few weeks of receipts.
- ✓Sign up early. You must be registered for Self Assessment and have sent a return in the last two years. HMRC's Director of Making Tax Digital, Craig Ogilvie: "Signing up now means you can prepare and familiarise yourself with the process before it becomes mandatory next April."
Sole traders and landlords joining Making Tax Digital on 6 April 2027
Source: HMRC press release, 5 October 2026
Common questions
Is the £30,000 threshold turnover or profit?
Turnover. HMRC says turnover "includes gross income from self-employment and property before any tax allowances or expenses are deducted." If you take £35,000 a year and keep £15,000 after costs, the £35,000 counts. Income from self-employment and from renting out property is added together.
Which tax year counts for the £30,000 threshold?
The 2025 to 2026 tax year, the return you send by 31 January 2027. If your qualifying income in that year was over £30,000, you must use Making Tax Digital from 6 April 2027. The 2026 to 2027 year decides the £20,000 step from April 2028. HMRC checks your return each year and writes to you if you are over.
Can I sign up for Making Tax Digital early?
Yes. HMRC is urging people in the £30,000 group to sign up now and practise before it becomes mandatory. To sign up you must be registered for Self Assessment and have sent a tax return in the last two years. You also still need to send the normal return for the year before you start.
What happens if I miss a quarterly update?
From the 2027 to 2028 tax year, each missed quarterly update or return deadline earns a penalty point, according to gov.uk. When you reach 4 points you get a £200 penalty, and another £200 for each further missed deadline. Only the 2026 to 2027 year, for the group that is already in, has no penalties for late updates.
Luca Bonura started selling online at 17 and funded his first business with 4:30am shifts in a bakery. He built his own product brand, watched it fail, and rebuilt as a freelance performance marketer for everyone from small shops to HelloFresh. Seeing how hard growth is even for people inside the industry, he founded Adlarion. He writes The Small Business Digest in plain English: the news he wished he'd had when starting out.
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