MTD for Income Tax from April 2027: The £30,000 Threshold
Table of Contents
If your self-employment or rental income was over £30,000 in the 2025-26 tax year, Making Tax Digital for Income Tax becomes mandatory for you from 6 April 2027. This is the second wave of the MTD rollout, following the £50,000 group that joined from April 2026, and it draws in a considerably larger number of sole traders and landlords. Here's exactly who's affected, why the current tax year matters more than most people realise, and what's worth setting up now rather than in March 2027.
Disclaimer: This article provides general information only and does not constitute tax advice. Consult a qualified accountant or tax adviser about your circumstances.
Who joins MTD from April 2027
HMRC is phasing in Making Tax Digital for Income Tax by qualifying income: broadly, your gross self-employment turnover and gross property income added together, before expenses. If that combined figure was over £30,000 in the 2025-26 tax year (6 April 2025 to 5 April 2026), you're required to start keeping digital records and submitting quarterly updates from 6 April 2027.
This applies to sole traders and landlords registered for Self Assessment, whether your income comes from self-employment, property, or both. If you run a trade and let out a property, the two figures are added together to test against the threshold; we've covered exactly how that combined test works in sole trader and landlord combined income under MTD, and the mechanics of qualifying income more generally in how qualifying income is calculated for MTD.
The £30,000 threshold is the middle of three published waves. The full picture, including the £20,000 threshold that follows in April 2028, is laid out in MTD from April 2028: the £20,000 threshold, and the complete rollout is covered in our Making Tax Digital guide for the self-employed.
Why the 2025-26 tax year already matters
Here's the part that catches people out: the 2025-26 tax year has already finished. It ended on 5 April 2026. Your Self Assessment return for that year is due by 31 January 2027, and HMRC uses the figures on that return to confirm who's mandated from the following April. In practice, that means most people already have a reasonably good idea of where they landed for 2025-26, even before the return is filed. If your turnover and rental income for that year added up to more than £30,000, you should plan on April 2027 applying to you.
Why preparing now beats scrambling in March 2027
It's tempting to treat April 2027 as a distant deadline and leave the details until closer to the time. The April 2026 cohort is a useful cautionary tale for why that's a mistake. HMRC's own figures tell the story: in July 2026 it put the number in scope from that April at more than 864,000. By 12 August 2026 a little over 570,000 had signed up, and just over 436,000 had sent their first quarterly update, which was due on 7 August. That left roughly 428,000 people who hadn't sent it, just four months into the new regime. Before the rollout, a Sage and IPSE survey of 1,000 sole traders (September 2025) found only 30% had heard of MTD and understood what it requires, and only 1 in 10 used cloud accounting software.
The pattern in that data is consistent: people who leave digital record-keeping until the mandate actually starts end up behind almost immediately. The 2026-27 tax year (the one we're in right now) is your run-up period before the April 2027 start date. Use it to build the habit of keeping digital records as you go, rather than trying to reconstruct a year of paper receipts in March 2027 while also learning new software and facing your first submission deadline in the same few weeks.
What to set up now: the digital records habit
You don't need to do anything HMRC-facing yet if you're not already mandated. What's worth doing now is building the habit MTD will require anyway:
- Record income and expenses digitally as they happen, rather than batching receipts up for later. The sooner this becomes routine, the less it will feel like a change when it becomes compulsory.
- Get comfortable with tax-aligned categories (office costs, travel, professional fees, and so on), since your quarterly updates will report totals by category, not itemised receipts. We cover exactly what a quarterly update contains in what goes in a quarterly update.
- Pick a sensible software setup now. HMRC's own guidance supports combining dedicated record-keeping software with separate filing or bridging software, connected by digital links. Even a properly linked spreadsheet remains legal as your records layer. There's no need to find one tool that does everything; there's a well-established pattern of a records app feeding an MTD filing product or your accountant.
- Know the deadlines before you need them. Quarterly updates are cumulative and due on a fixed cycle. See MTD quarterly update deadlines for 2026-27 for the full schedule.
Once you're mandated, missing a deadline isn't the end of the world, but penalties do apply under HMRC's points-based system. We explain how that works in MTD penalty points explained. Building good habits now is the cheapest way to avoid ever finding out how it works in practice.
Not sure whether you'll be affected?
If you're close to the £30,000 line, it's worth checking both how qualifying income is calculated and whether a digital exclusion exemption might apply to your situation (see MTD exemptions: who's out of scope). If you're genuinely unsure where your 2025-26 figures land, your accountant can confirm it well before the January 2027 filing deadline. Our free MTD threshold checker gives a quick first answer from your gross turnover and rental income.
Start the digital records habit today
Whichever wave you fall into, the earlier you're scanning receipts and keeping organised digital records, the less April 2027 (or 2028) will feel like a scramble. Taxr isn't MTD software itself. Think of it as the expense side of your records: you scan a receipt, Taxr's AI reads the vendor, date, total and VAT automatically and suggests a tax-aligned category, and you export clean Excel or PDF summaries whenever you or your accountant need them. A records app alongside filing software is the kind of setup HMRC's guidance describes, as long as the records reach the filing software through a digital link such as a file import, so check that your MTD software can import the Excel file.
You can try Taxr free with 10 scans. After that, Taxr Pro is £2.99 a month or £29.99 a year on the App Store, and £2.89 a month or £28.99 a year on Google Play. It's available on iPhone, iPad and Android, and accountants can use the free portal at portal.taxr.io to review client records.