Making Tax Digital for Income Tax began in April 2026 for sole traders and landlords with income over £50,000 per year. The next group joins on 6 April 2027 and covers anyone with more than £30,000 of self-employment and rental income in 2025/26. That tax year has already ended, so your answer is already fixed. This post shows how to check where you stand, what changes for you if you are in the £30,000 bracket and what to do before April.
Making Tax Digital for Income Tax: who joins in April 2027
If your qualifying income for 2025/26 was over £30,000, you must use Making Tax Digital for Income Tax from 6 April 2027, according to GOV.UK guidance. A third group follows in April 2028, based on 2026/27 income over £20,000. HMRC reviews your 2025/26 return and writes to confirm you need to join. If no letter arrives, checking is still your responsibility. File your Self-Assessment return early and you will find out sooner, which leaves more time to get ready.
Qualifying income is gross, not profit
The test counts money coming in before any expenses, and it adds self-employment and property income together. HMRC’s guidance on qualifying income sets out what counts. Wages, dividends and savings interest are not part of the test. This catches people out. A freelancer with £28,000 of fees and heavy costs may see a much lower profit and assume they are safe. The test ignores that number completely. If you own a property jointly, count your own share of the rent.
Worked example: a photographer with a rental flat
A photographer receives £28,000 in fees during 2025/26, before expenses. She also receives £4,000 in rent from a flat she owns. Her qualifying income is £32,000, so she joins on 6 April 2027. It makes no difference that £11,000 of business costs leave her taxable profit far lower, because the test looks only at money received. Had her fees been £25,000, her total would be £29,000 and she would avoid April 2027. The £20,000 threshold for 2026/27 would still catch her in April 2028.
What changes once you are in
You keep digital records in compatible software and send HMRC a summary every quarter. The deadlines are 7 August, 7 November, 7 February and 7 May, so your first update is due on 7 August 2027. You still file a year-end return. Penalty points apply from the start: one point for each missed deadline, and a £200 penalty at four points. The grace period given to the first group, with no penalties for late updates in 2026/27, does not cover you.
Landlords report rental income separately
Each income source has its own quarterly update, so a landlord with a creative sideline sends two. Record rent and costs property by property from day one, because a missing receipt is harder to trace in a quarterly summary than in an annual return. Our guide for London landlords explains how the April 2027 property income tax rates also affect planning. If you use a letting agent, ask for monthly statements that fit your software, so the figures are ready when each quarter ends.
Choosing software before April
You need software that works with HMRC’s system. It either creates your records or connects to the ones you already keep, so a spreadsheet can stay if you add bridging software. Xero, FreeAgent and QuickBooks are well-known options, so check each against HMRC’s compatibility list before you pay. If you want less to do yourself, your accountant can send the updates for you. Our bookkeeping and accounting service sets up the records, so your first quarter is not your first attempt.
Book a readiness check before April
We offer a short, free-of-jargon Making Tax Digital for Income Tax readiness check. We confirm whether you are in the £30,000 group using your own figures, flag anything that could change your start date, and suggest software that suits how you work. If your income is uneven or you own several properties, do it sooner rather than later. A short conversation now is much cheaper than a scramble in summer 2027. Our accountants for creatives team can book it with you.
Action checklist
- Add up your gross 2025/26 self-employment and rental income.
- File your 2025/26 Self-Assessment return early.
- Choose compatible software before April 2027.
- Diary 7 August 2027 for your first quarterly update.
- Book a readiness check with us.
Frequently asked questions
Do I need Making Tax Digital for Income Tax if my profit is under £30,000?
The test uses gross income before expenses, not profit. If your 2025/26 self-employment and property income was over £30,000, you must join from 6 April 2027 even if your profit is lower.
Does employment income count towards the £30,000?
No, only gross self-employment and property income count. Wages from a day job do not count towards the £30,000, although they still go on your tax return.
Can I be exempt from Making Tax Digital for Income Tax?
Some people can, for example if they are digitally excluded. You must still file a Self Assessment return, and HMRC’s guidance explains who qualifies and how to apply.
What happens if I miss a quarterly update in 2027/28?
You get one penalty point for each missed deadline. At four points HMRC charges £200, and another £200 each time you miss a deadline after that.
About the author
Robert Green is a chartered accountant and co-founder of Green & Peter, specialist accountants for creative businesses and property investors in Whetstone, North London. He helps self-employed clients and landlords get their records ready for the quarterly reporting that Making Tax Digital for Income Tax brings. To book a Making Tax Digital for Income Tax readiness check, call 020 8446 8100 or visit greenandpeter.co.uk/contact-us/.
