MTD April 2027: £30,000 Threshold Guide

Making Tax Digital for Income Tax expands again on 6 April 2027. This time, eligible sole traders and landlords with qualifying income over £30,000 come into scope.

The number that matters is not profit. HMRC looks at gross self-employment turnover plus gross UK property income before expenses, using the figures on your 2025 to 2026 Self Assessment return.

If you are likely to be affected, the best time to change your bookkeeping is before January's tax-return rush — not in the first week of April.

Who enters MTD in April 2027?

According to HMRC's current eligibility guidance, the April 2027 wave applies if all of these are true:

• you are an individual registered for Self Assessment
• you receive self-employment income, UK property income or both
• your qualifying income for 2025 to 2026 was more than £30,000
• you are not exempt from Making Tax Digital for Income Tax

Partnership income received as an individual partner does not count towards qualifying income. The rules for partnerships themselves are on a separate timetable.

HMRC reviews Self Assessment returns and writes to people it believes must join. A missing letter does not remove your responsibility to check.

The £30,000 threshold is turnover, not profit

This is the most important calculation in the 2027 rollout.

Qualifying income is:

gross self-employment income + gross UK property income

It is measured before deducting business expenses, the trading allowance, the property allowance or tax.

The following generally do not count towards the threshold:

• PAYE employment income
• dividends
• savings interest
• pension income
• capital gains
• partnership profit received as an individual partner

Examples

Situation in 2025/26	Qualifying income	April 2027 position
£34,000 freelance turnover and £9,000 expenses	£34,000	In scope
£29,500 sole-trader turnover only	£29,500	Not in this wave
£22,000 trade turnover plus £12,000 gross rent	£34,000	In scope
£28,000 trade turnover plus £20,000 PAYE salary	£28,000	PAYE does not push it over
Exactly £30,000 qualifying income	£30,000	Threshold says more than £30,000

If you have both trading and property income, combine them even when neither source is over £30,000 alone. Read our detailed guide to MTD qualifying income for less common scenarios.

Which tax return HMRC checks

HMRC uses the 2025 to 2026 Self Assessment return to decide whether you should start MTD on 6 April 2027. That return covers income from 6 April 2025 to 5 April 2026 and is due online by 31 January 2027.

Check the gross figures carefully before filing. A business can have modest profit but still exceed the MTD threshold because turnover is measured before expenses.

You still file that 2025 to 2026 return through the existing Self Assessment process. MTD starts for the following tax year; it does not retrospectively change the return you are preparing now.

If you later amend the return and that changes your qualifying income, your MTD start position can also change. Keep evidence for the turnover and property figures used.

What changes from 6 April 2027

Once in MTD for Income Tax, you need compatible software to:

• create and keep digital records of relevant income and expenses
• send quarterly updates for each self-employment and property business
• make corrections and relevant year-end adjustments
• complete and submit the tax return through the MTD workflow

For standard update periods, the deadlines are:

Cumulative period	Deadline
6 April to 5 July 2027	7 August 2027
6 April to 5 October 2027	7 November 2027
6 April 2027 to 5 January 2028	7 February 2028
6 April 2027 to 5 April 2028	7 May 2028

Each update covers cumulative totals from the start of the tax year to the end of that update period. Quarterly updates are summaries, not four complete tax returns, and they do not trigger four tax payments.

A practical preparation timeline

September to November 2026: check the threshold

Estimate the qualifying income shown on your 2025 to 2026 return. Add gross trade turnover and gross UK property income before expenses.

If the result is near £30,000, do not plan around a rough profit figure. Pull the actual records together and ask an accountant if the treatment of an income source is unclear.

Use our MTD eligibility checker for an initial view, but use the completed tax return as the decisive record.

Before 31 January 2027: file accurately

Complete the 2025 to 2026 Self Assessment return and keep a copy. Note the gross self-employment and property income figures.

If the combined total is over £30,000, assume you need a working MTD setup by April unless HMRC confirms an exemption or correction.

January to February 2027: choose software

Do not choose on brand name alone. Check whether the product supports:

• MTD for Income Tax rather than only VAT
• sole-trader and property income relevant to you
• bank feeds, receipt capture or spreadsheet import
• multiple businesses, if needed
• your accountant's access and preferred workflow
• the year-end tax return, not just quarterly submissions
• a price you can sustain after any introductory offer ends

Our MTD software chooser narrows the options. You can also compare free and paid MTD software before committing.

February to March 2027: test the workflow

Use real 2026 to 2027 records to learn the product before the mandatory period begins. Connect a bank feed, import a statement, create an invoice, upload a receipt and test the reconciliation process.

If your accountant will submit updates, agree who handles day-to-day categorisation and how often they will review your records. Software does not fix unclear ownership.

By 5 April 2027: finish setup

Confirm that:

• the correct business and property sources are shown
• your Government Gateway access works
• the software is authorised for MTD for Income Tax
• the accounting period is correct
• your bank connections or imports work
• you know who is responsible for each deadline
• you have recorded the first four quarterly dates

From 6 April, start creating digital records as transactions happen. Do not wait until the August deadline to reconstruct four months of activity.

How to choose the most profitable setup for your time

The cheapest subscription is not automatically the lowest-cost choice. Consider the time needed to maintain it and any accountant fees caused by messy or incomplete records.

An all-in-one product is usually worth considering if you want bank feeds, invoicing, expense capture and submissions in one place. Xero is a strong option for people who work with an accountant or need integrations; check Xero's current trial offer before paying. FreeAgent may suit freelancers who want a UK-focused tax workflow, while Sage and QuickBooks suit different budgets and feature needs.

If your books are simple and you already maintain a disciplined spreadsheet, bridging software may cost less. The trade-off is that you remain responsible for the spreadsheet structure, digital links, categories and year-end route. Our spreadsheet MTD guide explains the limitations.

What if your income falls later?

Crossing the threshold for the test year can bring you into MTD even if current income has dropped. HMRC does not normally let you leave immediately after one lower-income year.

Current guidance includes an income-based opt-out after qualifying income remains below the relevant threshold for three consecutive tax years. Other changes — such as all relevant income sources ceasing or becoming exempt — have separate rules.

Do not stop filing quarterly updates simply because one quiet year puts you below £30,000. Check your HMRC account and follow the formal opt-out or cessation process when eligible.

What if you cannot use digital tools?

HMRC provides exemptions in specific circumstances, including some cases of digital exclusion. The decision is based on whether it is reasonable and practical for you to use digital tools, considering factors such as disability, age, remoteness or religious belief.

Apply rather than assuming you are exempt. If granted, you continue reporting through Self Assessment instead of the MTD workflow.

Your next step

The 2027 wave will affect people with smaller and often simpler businesses than the first £50,000 group. That makes it even more important not to buy more software than you need — but waiting until April creates its own cost.

Check the 2025 to 2026 turnover figures now. If qualifying income is over £30,000, use the next few months to choose software, test it and agree responsibilities with your accountant. Start with the MTD software chooser, then build the record-keeping habit before 6 April 2027.