MTD £30,000 Threshold: Are You Ready for April 2027?

Written by James Veal

Making Tax Digital for Income Tax has already gone live for self-employed people and landlords earning over £50,000. We covered this in our guide to HMRC’s automatic MTD sign-up, back in September 2026. But that’s only the first wave. From 6 April 2027, the threshold drops to £30,000, pulling many more sole traders and landlords into quarterly digital reporting. If your income sits anywhere near that mark, start preparing now — not in April 2027.

What’s Changing in April 2027

From the start of the 2027/28 tax year, anyone with gross income over £30,000 from self-employment and/or property must join Making Tax Digital for Income Tax. This is the second of three planned phases:

• April 2026 — income over £50,000 (already live)
• April 2027 — income over £30,000
• April 2028 — income over £20,000 (the current government commitment, though the government hasn’t fully legislated this third phase’s details yet)

Once you’re in, the obligations are identical to the £50,000 cohort already filing — there’s no lighter-touch version for this group.

How the £30,000 Threshold Is Actually Worked Out

The £30,000 threshold uses your gross income — turnover before expenses — from self-employment and property combined, not your profit. If you’re a sole trader with a side rental property, HMRC adds both income streams together to test against the threshold.

HMRC determines whether you need to join from a look-back year. Specifically, your 2025/26 Self Assessment return decides whether you must join from April 2027. That means the figure that matters is what you report for the tax year ending 5 April 2026. For many people, that tax year has already ended or is ending very soon.

What Joining MTD Actually Means

Once you’re within scope, you’ll need to:

• Keep digital records of your business income and expenses using MTD-compatible software
• Submit a quarterly update to HMRC roughly every three months, summarising income and expenses for that period
• Submit a final declaration by 31 January, replacing the old Self Assessment return, to confirm your figures and claim any reliefs or allowances

This replaces the old once-a-year Self Assessment return with an ongoing quarterly rhythm. It’s a significant change in habit if you’re used to gathering everything together once in January. See our running schedule of MTD quarterly deadlines for the exact dates.

Will HMRC Automatically Sign You Up?

Not necessarily in the way you might expect. HMRC’s current automatic sign-up campaign writes to people and enrols them into MTD. Right now, it specifically targets the £50,000 cohort who haven’t yet registered themselves. It doesn’t currently extend to the £30,000 group — that’s a separate, future wave. Don’t assume a letter will land in good time and take care of everything for you. Check your own position against your 2025/26 figures rather than waiting to be told.

What Happens If You Don’t Comply

Missed quarterly updates accrue penalty points under HMRC’s points-based system. Quarterly filers currently need 4 points before triggering a £200 fine, and points expire after 24 months if you stay on top of things. HMRC is also extending this system more widely to Self Assessment taxpayers generally from April 2027 — we’ve covered that in more detail separately.

How to Get Ready Now

• Check your 2025/26 gross income against the £30,000 figure, combining self-employment and property income
• Move to digital bookkeeping well before your mandatory start date. Learning new software in your first live quarter adds unnecessary pressure
• Get into a quarterly rhythm even before you’re required to. Reviewing your figures every three months makes the eventual switch far less disruptive
• Talk to a bookkeeper who already works with MTD-compatible software, so they handle the transition for you instead of you figuring it out from scratch

The good news: HMRC and the accounting industry have already learned plenty from the £50,000 rollout, including which software works, which pitfalls to avoid, and which deadlines catch people out. You won’t have to face this transition blind.

Let PBAS Help You Get Ahead of It

If your income is anywhere near the £30,000 mark, PBAS can help. We’ll assess exactly where you stand, get your bookkeeping onto MTD-compatible software in good time, and make sure your first quarterly update is nothing to worry about.

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Frequently Asked Questions

Do I need to do anything before April 2027 if I’m under £30,000 now but might grow?

Not legally, but it’s worth keeping an eye on your income as the year progresses. Since it’s your 2025/26 gross income that determines your April 2027 start date, a strong year now could bring you into scope earlier than you expect.

Does the £30,000 threshold apply per person or per business?

It applies per person, based on their total gross self-employment and property income across all sources combined — not per individual business or property.

Is the £20,000 threshold for April 2028 definitely happening?

It’s the government’s stated commitment, but the detailed legislation for that phase hasn’t been finalised the way the £50,000 and £30,000 phases have. Worth watching for confirmation nearer the time.

What if my income drops below £30,000 after I’ve joined MTD?

Once you’re in MTD, you generally stay in — HMRC doesn’t automatically remove you if your income later dips below the threshold in a single year. There are exit provisions for sustained drops, but the default is that MTD continues.

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Need Help with This?

PBAS provides affordable bookkeeping and accountancy services for sole traders and small businesses across East Lothian, Edinburgh, Midlothian and throughout Scotland. If you’d like a hand with your accounts, self assessment or any tax matter, get in touch for a free, no-obligation chat.

• HMRC Is Now Automatically Signing People Up for MTD
• MTD Quarterly Deadline Schedule
• MTD for Income Tax — What Sole Traders Need to Do Now

This article provides general guidance only. For specific advice on your circumstances, consult HMRC directly via the GOV.UK guide to Making Tax Digital for Income Tax or speak to a qualified bookkeeper.