Making Tax Digital for Income Tax: what changes in April 2027
The Making Tax Digital threshold drops to £30,000 in April 2027, pulling in a large share of UK sole traders and landlords. Here is who joins, what MTD 2027 actually changes about your records and deadlines, and how to get ready without drama.
In this guide
Who joins and when
Making Tax Digital for Income Tax replaces the single annual Self Assessment return with digital record-keeping and quarterly updates to HMRC. It applies to sole traders and landlords, and it is being phased in by income, not by choice. This guide covers the April 2027 wave; the full MTD for Income Tax service page covers how we handle it for you.
The clock is set by your qualifying income, which is your total gross income from self-employment and property combined, before expenses. Those over £50,000 joined in April 2026. The April 2027 wave is the big one: it pulls in everyone over £30,000, which covers a large share of working sole traders and landlords in the UK. Landlords are caught on gross rents rather than profit, which is why our landlord accountancy service starts every conversation with the threshold check.
The thresholds
The Making Tax Digital threshold works down through three income bands over three years.
| Qualifying income | Joins MTD for Income Tax |
|---|---|
| Over £50,000 | Joined April 2026 |
| Over £30,000 | Joins April 2027 |
| Over £20,000 | Joins April 2028 |
| VAT-registered businesses | Already in MTD for VAT |
Use the checker below to see in ten seconds whether the MTD 2027 change catches you.
Does MTD apply to you?
Am I affected by Making Tax Digital?
MTD means quarterly online submissions for many sole traders and landlords. Two quick questions tell you if it applies.
It’s an old return that decides it. HMRC looks back at your 2024/25 return, the one due on 31 January 2026. If the self-employment and rental income on it came to more than £50,000, you’re in from 6 April 2026 and your first quarterly update is due 7 August 2026. What you earn this year doesn’t change that.
It’s turnover, not profit. HMRC counts income before expenses, and adds self-employment and property together. £32,000 of trade plus £24,000 of rent is £56,000, so it counts even though the profit is far smaller.
What actually changes. Digital records, four quarterly updates a year, then your tax return as usual. The updates are running totals rather than four separate returns, and your payment dates don’t move.
What MTD quarterly updates actually mean
Instead of one return after the year ends, MTD quarterly updates send HMRC a summary of your income and expenses every three months, direct from software. They are cumulative running totals, not four mini tax returns, and there is no tax to pay with each one.
After the fourth quarter you finalise the year in one closing declaration, which replaces the Self Assessment return. The tax payment dates themselves do not change. What changes is the rhythm: your records have to be kept up to date all year, because the next of the Making Tax Digital deadlines is never more than three months away.
The software you’ll need
Spreadsheets and paper records on their own will no longer do the job. You need MTD compatible software that keeps digital records and files the quarterly updates, such as Xero or QuickBooks, both of which we support and can set you up on before the MTD 2027 start date.
For most people the software is the silver lining. Bank feeds pull transactions in automatically, receipts are photographed rather than shoeboxed, and you can see what tax to set aside all year instead of guessing in January.
How to get ready now
First, check your qualifying income against the table above, remembering it is gross income from self-employment and property combined. Second, move your records into MTD-compatible software well before April 2027, so the first quarter is routine rather than a scramble. There is no separate MTD sign up deadline to diarise: HMRC judges you on the tax return filed two years earlier and expects digital records from your start date, so the real deadline is being ready before 6 April 2027.
Third, decide who files the updates. There is no separate MTD sign up deadline to diarise, but there is a hard start date. As your appointed agent, we deal with HMRC for you, and we handle every quarterly submission for clients on our Making Tax Digital service. Unsure how this applies to you? Get in touch.
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