If you’re a sole trader or landlord with gross income above £30,000, Making Tax Digital for Income Tax is due to apply to you from 6 April 2027.
That may sound like ages away. It isn’t. You’ll need to choose compatible software, get your records into a digital system and understand a new reporting routine. And the first group’s experience is a warning: only around 436,000 of an estimated 864,000 people met their first quarterly update deadline.
HMRC has announced that around 1,077,000 more sole traders and landlords will join the scheme next April. So if you’re in the £30,000 group, don’t assume you can safely leave this until spring.
The £30,000 figure is not your profit
The threshold is based on gross income from self-employment and property before expenses or allowances. It is not your take-home pay, taxable profit or the amount left after you deduct business costs.
And if you have both self-employment and property income, the figures are considered together. For example, a sole trader with £23,000 of gross business income and a landlord with £8,000 of gross property income would have £31,000 in total. That is above the threshold, even if expenses leave much less profit.
HMRC’s 5 October announcement says the £30,000 group must keep digital records and send quarterly updates using compatible software from 6 April 2027. The threshold is then due to fall again: to £20,000 from April 2028.
The first deadline is a warning, not a technicality
The first cohort, sole traders and landlords with qualifying gross income above £50,000, started using MTD for Income Tax in April 2026. Their first quarterly update was due on 7 August.
HMRC reported that more than 436,000 people had successfully submitted by the deadline. That’s about half of the estimated 864,000 first-cohort population. In other words, roughly half had not met the first deadline on time.
There was a temporary cushion: HMRC says late quarterly updates won’t attract penalty points during the 2026/27 tax year. But that soft landing is for the first cohort’s first year. It does not cover the £30,000 group joining in 2027/28, or the £20,000 group joining in 2028/29.
That makes “I’ll sort it out later” a riskier plan than it may appear. The first cohort’s experience shows that signing up and filing an update are not the same as having your records, software and routine ready to go.
The next milestone for that first group is the second quarterly update, due 7 November 2026. It’s a useful reminder that this is a regular reporting cycle, not a one-off digital tax return.
The next group may have less support
ICAEW has highlighted further reasons for concern. Its October analysis says about 63% of the £30,000 cohort are supported by an agent, compared with 75% in the first cohort. Fewer than half currently use tax software.
That doesn’t mean you need an accountant or that the system can’t work for you. It does mean many people will need to learn new software and change how they keep their records, while continuing to run a business or manage rental property.
ICAEW has asked the government to review the first cohort’s experience and delay the £30,000 rollout until that review is complete. It has also called for the late-filing soft landing to be extended to future cohorts. The Autumn Budget is scheduled for 28 October 2026, so it is a near-term opportunity for the government to respond. But as of 23 October, the planned April 2027 start remains in place. Don’t make your preparations depend on a delay that has not been announced.
What MTD means in everyday terms
If you’re in scope, you’ll need to keep digital records of your business and property income and expenses, then use compatible software to send HMRC quarterly updates.
Those updates are not four extra tax returns. They are summaries of your income and expenses sent through software. But they don’t replace your Self Assessment tax return either. You’ll still need to file a tax return, and the usual 31 January 2027 Self Assessment deadline still applies to everyone.
For the £30,000 cohort, the new quarterly reporting requirement begins on 6 April 2027. You don’t have to create MTD digital records before then just because you’ll join the scheme. But leaving the setup until the last minute could mean rushing to choose software, organise records and work out how updates will fit into your routine.
Four steps to take now if you’re around £30,000
1. Check your 2025/26 gross income. Add your gross self-employment and property income for the tax year. Use income before expenses and allowances, not profit. If your income is close to £30,000, check your figures carefully and ask your accountant to confirm how the rules apply to your circumstances.
2. Look at compatible software now. HMRC publishes a list of software compatible with MTD for Income Tax. Compare the options and think about how you’ll record receipts, income and expenses as you go. A spreadsheet or paper folder alone may not meet the digital requirements; check what the software and HMRC rules require for your setup.
3. Start building a digital habit. From 6 April 2027, keep your records digitally using your chosen system. Even before then, you can make a simple plan: how you’ll capture invoices, payments, receipts and rental income, and when you’ll update your records.
4. Speak to your accountant about sign-up timing. To sign up, you must be registered for Self Assessment and have filed a tax return in the last two years. Check that you meet those conditions and agree when and how to sign up. You can read more about HMRC’s sign-up process.
If you’re a sole trader looking for support, see our sole trader accountancy services and Making Tax Digital support. We explain the numbers in plain English and can help you work through practical next steps.
HMRC has set the date. Don’t wait for a letter.
“HMRC is coming for the £30k group” is deliberately punchy. It doesn’t mean HMRC has singled you out or that you’re already late. It means the next stage has been announced, the threshold is defined, and the first cohort has already shown how easy it is to underestimate the preparation involved.
HMRC has published the scale of the next group and urged people to get ready. The smart response is not panic. It’s checking your gross income, choosing a suitable system and getting advice while you still have time.
Want help working out what MTD means for you? Talk to Makes Sense Accountants. We’ll explain your options without the jargon and help you plan ahead. Contact us here.