Sole traders and landlords with gross income above £30,000 will be brought into Making Tax Digital for Income Tax from April 2027, according to HMRC. The change extends a system that began on 6 April 2026 for those earning more than £50,000, and the department says over 570,000 people have registered so far, with more than 436,000 having submitted a first quarterly update.

Key points

  • Who is affected — sole traders and landlords with qualifying income above £30,000 from April 2027.
  • What changes — records must be kept digitally and a summary sent to HMRC each quarter, one month after the quarter ends.
  • Income test — the figure is gross turnover from self-employment and property combined, not profit.
  • Later expansion — the threshold drops to £20,000 in April 2028, adding a further 975,000 people.

Instead of one Self Assessment return each year, those in scope will use HMRC-approved software to log income and expenses as they go. The annual return remains, but it comes on top of four quarterly submissions during the year. Because the test is based on turnover rather than profit, some traders with modest earnings may find themselves included.

Softer start for the first group

HMRC has eased the introduction for the 2026/27 tax year: late quarterly updates will not trigger penalty points while the first group finds its feet. The department has not promised the same leniency for those joining in 2027, so early preparation is advised. Support from bookkeepers and accountants is reportedly in growing demand as the deadline nears.

Editor's comment

What it means in practice

If you are self-employed or rent out property, the first step is to work out whether your combined gross income crosses the threshold — and to remember it is turnover, not take-home profit. Setting up compatible software and connecting your bank account now avoids a scramble later.

  • Check your figures — add up self-employment and property income before assuming you are outside the rules.
  • Start early — choosing software and tidying your records months ahead makes the first quarterly update far less painful.
  • Consider help — bookkeepers are booking up as April approaches, so ask sooner rather than later.