Making Tax Digital: sole traders and landlords over £30,000 have six months left
From 6 April 2027, around 1.08 million more sole traders and landlords with income over £30,000 must keep digital records and send HMRC quarterly updates.
HM Revenue and Customs (HMRC) is urging sole traders and landlords with income of more than £30,000 to sign up for Making Tax Digital (MTD) for Income Tax now, with six months to go before it becomes compulsory for them on 6 April 2027.
HMRC estimates that around 1,077,000 more people will have to join from April 2027. They will need to keep digital records, use compatible software to send HMRC quarterly updates of their income and expenses, and complete their tax return through that software. MTD has been mandatory for sole traders and landlords with income over £50,000 since 6 April 2026, and the threshold will fall again to £20,000 from April 2028.
What counts towards £30,000
The threshold is based on your turnover, not your profit. HMRC says it includes gross income from self-employment and property before any tax allowances or expenses are taken off. So a landlord with £18,000 of rent and £14,000 of self-employed income would be over the line, even if their profits are much lower.
What this means for you
- Quarterly updates aren't extra tax returns. HMRC describes them as short summaries of your income and expenses.
- You need to be registered for Self Assessment and have sent a tax return in the last two years to sign up.
- Exemptions exist, including for people who are digitally excluded. Check the rules on GOV.UK if you think this applies to you.
- Agents can sign up clients on their behalf.
Ways to save
- Compare software before you commit. HMRC publishes a list of compatible software on GOV.UK. Prices and features vary, so check what you'll pay once any introductory offer ends, and whether a simpler, cheaper product covers your needs.
- Sign up early. HMRC says joining before you have to gives you time to get your details right and get used to the software at your own pace, rather than in a rush next spring.
- Keep records as you go. Logging income and receipts through the year can save time at tax return time and help you spot allowable expenses you might otherwise miss. If you need office software to keep notes alongside your records, Mr Key Shop sells Office licences.
Sources: HM Revenue and Customs
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