MTD for Income Tax at £30,000: who must join in April 2027

You must use Making Tax Digital (MTD) for Income Tax from 6 April 2027 if you are a sole trader or landlord and your qualifying income on your 2025-26 tax return is over £30,000. Qualifying income is your self-employment and property turnover before expenses, not your profit. HMRC expects about 1,077,000 more people to join in April 2027.

Who has to join in April 2027?

You join from 6 April 2027 if you are registered for Self Assessment, you have self-employment or property income, and your qualifying income for 2025-26 is over £30,000. HMRC’s press release of 5 October 2026 put the size of this group at about 1,077,000, based on 2024-25 returns.

MTD is being phased in by income level:

Partnerships are not yet included, and no date has been set for them.

What counts as qualifying income?

Qualifying income is your total self-employment and property income before expenses, according to GOV.UK’s qualifying income guidance, updated 11 September 2026. Turnover from every source is added together.

Included:

• turnover from every sole trade
• UK and overseas property income, if you are UK resident
• your share of jointly owned property income
• income from a ceased source, if you still have another continuing source
• VAT, if you use the cash basis and choose to include it

Not included:

• employment income taxed through PAYE
• State Pension and private pensions
• dividends and savings interest
• your share of profit as a partner in a partnership
• transitional profits from basis period reform
• income covered by qualifying care relief

Worked examples

Each example uses 2025-26 figures.

1. Sole trader with a job. Salary of £40,000 and self-employed turnover of £24,000. Qualifying income is £24,000, so they do not join in 2027. They may join in 2028 if 2026-27 turnover is over £20,000.
2. Mixed income. Rental income of £16,000 and trading income of £15,000. Qualifying income is £31,000, so they join in April 2027.
3. Joint landlords. A couple receive £50,000 of rent, split equally. Each has qualifying income of £25,000, so neither joins in 2027.
4. High turnover, low profit. Turnover of £35,000 and profit of £8,000. Qualifying income is £35,000, so they join in April 2027.

Which applies to you?

• If your 2025-26 qualifying income is £30,000 or less, you do not join in April 2027, but check your 2026-27 figure against £20,000.
• If it is over £30,000, sign up before 6 April 2027 and choose software.
• If you already joined in April 2026, nothing changes, but penalty points apply to your quarterly updates from 2027-28.
• If you qualify for an exemption, you keep filing a normal Self Assessment return.
• If you have not filed your 2025-26 return, file it. The return, due by 31 January 2027, is what decides whether you join.

Who is exempt?

Some people are exempt automatically and others must apply. GOV.UK’s exemption guidance lists automatic exemptions including:

• people without a National Insurance number before the start of the tax year
• personal representatives of someone who has died
• trusts filing an SA900
• people with a power of attorney or legally appointed deputy

You can apply for a digital exclusion exemption if age, health, disability, religious beliefs or no internet access at your location make using software unreasonable. HMRC aims to decide within 28 days.

Budget 2026 adds exemptions until further notice for people eligible for qualifying care relief, such as foster carers, non-UK resident entertainers and sportspeople, and people who expect to become non-resident. See MTD changes in Budget 2026.

What happens after you join?

You keep digital records and send HMRC four quarterly updates a year through MTD-compatible software. For 2027-28 the first update is due by 7 August 2027. You then file a tax return by 31 January 2029. See MTD quarterly deadlines.

The Budget 2026 overview of tax legislation confirms no penalty points for late quarterly updates in 2027-28 for this cohort. Updates must still be sent before the return can be filed.

What to do now

1. Check your 2025-26 turnover from every self-employment and property source.
2. File your 2025-26 return early. HMRC reviews returns and writes to people over the threshold, but you are responsible for checking even without a letter.
3. Choose software and start keeping digital records before 6 April 2027.
4. Sign up. Follow how to sign up for MTD for Income Tax, and check whether HMRC has signed you up automatically.

Landlords should also read MTD for landlords.

Frequently asked questions

Is the MTD £30,000 threshold based on turnover or profit?

Turnover. Qualifying income is gross self-employment and property income before expenses and allowances are deducted.

Which tax year decides if I join MTD in April 2027?

2025-26. If your qualifying income on your 2025-26 Self Assessment return is over £30,000, you must join from 6 April 2027.

Does my salary count towards the £30,000?

No. Employment income taxed through PAYE does not count, and neither do pensions, dividends, savings or partnership profit shares.

If my income falls below £30,000 next year, can I leave MTD?

Not straight away. You can choose to opt out only if your qualifying income stays below the threshold for three tax years in a row after you start.

How many people join MTD for Income Tax in April 2027?

HMRC estimates about 1,077,000 more sole traders and landlords, based on its analysis of 2024-25 Self Assessment returns.

When does the MTD threshold drop to £20,000?

From 6 April 2028, for people whose 2026-27 qualifying income is over £20,000.