Making Tax Digital drops to £30,000 turnover from April 2027

Reacting to

Sole traders and landlords earning more than £30,000 urged to act now (HMRC, 5 October 2026)

Six months before a new threshold takes effect, HMRC has set out who it reaches. From 6 April 2027, a sole trader or landlord with turnover over £30,000 has to keep digital records and send quarterly updates under Making Tax Digital for Income Tax. The figure that decides it is already on the return the firm filed for that client last year.

What HMRC announced

HMRC set out the change on 5 October 2026, six months ahead of the £30,000 threshold taking effect.

£30,000

the turnover threshold for Making Tax Digital for Income Tax, combining self-employment and property income, from 6 April 2027.

1,077,000

more sole traders and landlords expected to be brought in, based on HMRC analysis of 2024 to 2025 Self Assessment returns.

£50,000

the threshold already mandatory since 6 April 2026; that group's second quarterly update is due 7 November 2026.

£20,000

the threshold from April 2028, bringing in a further group of sole traders and landlords.

HMRC, Sole traders and landlords earning more than £30,000 urged to act now, 5 October 2026

HMRC's sign-up guidance, last updated 24 August 2026, sets out the figure that is tested: qualifying income is “total income from self-employment and property”, the amount before expenses, “also known as turnover”, based on the return submitted the year before. The self-employment figure and the property figure are added together before the £30,000 line is tested. A client who looks safely under the threshold on either source checked on its own can still be inside it once both are counted.

Where the combined figure already sits

The £30,000 line is the sum of two numbers that already sit in the return a firm has prepared: the turnover on the self-employment pages and the turnover on the property pages. Checking the two income sources separately misses a client with a let property and some self-employed work on the side, each under £30,000 by itself.

To sign up, a client needs to be registered for Self Assessment and to have submitted a tax return in the last two years. An agent can sign a client up through GOV.UK before the requirement becomes mandatory, including a full year early, which gives the client time to choose software and build up digital records before 6 April 2027.

A couple going through paperwork and a laptop together

Craig Ogilvie, HMRC’s Director of Making Tax Digital, 5 October 2026: “Hundreds of thousands of sole traders and landlords are already successfully using Making Tax Digital and now it’s time for the next group to get ready. Signing up now means you can prepare and familiarise yourself with the process before it becomes mandatory next April.”

A worked example

This example uses a made-up client and made-up figures.

A client lets two flats and does some self-employed consultancy work alongside a day job. Property turnover for 2025/26 is £19,000, before expenses. Self-employment turnover for the same year is £14,500. Neither figure alone reaches £30,000.

The landlord with consultancy income

Made-up client and made-up figures

Property turnover£19,000

Self-employment turnover£14,500

Combined qualifying income£33,500

From 6 April 2027 this client has to keep digital records of both income sources and send quarterly updates, because the combined figure crosses £30,000, even though neither source on its own would. Checked one income source at a time, a client list review would not catch this client.

Accountancy work

Adding self-employment and property turnover together across the client list, and getting digital records and compatible software in place before 6 April 2027.

Regulated advice

What the combined figures show about a client’s wider position, such as rental income with no pension provision alongside it, sits with the Equity & General financial planner.

The division between the two is set out in who does what.

Two checks to run this week

Add self-employment and property turnover together for each client. Using the 2025/26 figures already on file, anyone whose combined total reaches £30,000 is in scope from 6 April 2027, even if neither income source alone would put them there.
Offer early sign-up to clients who have time to prepare. HMRC's sign-up service lets a client who expects to need Making Tax Digital for Income Tax from 2027 sign up now, through an agent, so there is a full year to choose software and build up digital records before it becomes mandatory.

What is not yet settled

HMRC's 5 October announcement confirms the £30,000 threshold and the 6 April 2027 date. It does not say whether the automatic sign-up process that began in September 2026, covering anyone in the £50,000 group who had not signed up themselves, will apply in the same way to the £30,000 group joining in 2027. The exemption for customers who are digitally excluded, mentioned in the announcement, has not yet been set out in detail for this group either.

Common questions

Which clients does the £30,000 threshold bring into Making Tax Digital for Income Tax?

From 6 April 2027, a sole trader or landlord whose combined turnover from self-employment and property is over £30,000 has to use Making Tax Digital for Income Tax, HMRC confirmed on 5 October 2026. The figure is qualifying income: total income from self-employment and property, before expenses, based on the tax return submitted the year before. HMRC expects around 1,077,000 more sole traders and landlords to be brought in, on top of the group already using the service since the £50,000 threshold took effect on 6 April 2026. A further threshold drop, to £20,000, follows from April 2028. The qualifying income figure for a given client is already on the tax return the firm has prepared.

Does a client need rental income and self-employment income separately over £30,000, or combined?

Combined. HMRC's sign-up guidance defines qualifying income as total income from self-employment and property added together, before expenses. A client who lets a property for £19,000 a year and does separate self-employed consultancy work for £14,500 has combined qualifying income of £33,500, over the £30,000 line, even though neither income source on its own reaches it. Checking a client’s self-employment turnover and their property turnover as two separate figures can miss this kind of client; the test only catches them once the two are added together. The combined figure comes from the same tax return a firm already prepares each year, so no extra information needs to be gathered before the test can be applied.

What should the firm do before 6 April 2027?

Add self-employment and property turnover together for each sole trader and landlord client, using the figures on the return already filed, to find anyone whose combined total is at or above £30,000. For clients who want longer to prepare, an agent can sign them up to Making Tax Digital for Income Tax through GOV.UK before it becomes mandatory, including a full tax year early, so there is time to choose compatible software and build up digital records. A client needs to be registered for Self Assessment and to have submitted a tax return in the last two years before signing up.

Why does this reach beyond bookkeeping and into financial planning?

The FCA's Financial Lives 2024 survey found that 13% of self-employed adults, and 8.6% of UK adults overall, had taken regulated financial advice in the previous twelve months. Many of the newly in-scope landlords and sole traders are, on those figures, unlikely to have a financial planner. Preparing a client for quarterly digital reporting means setting out their self-employment and property income together, which gives the accountant a reason to look at surplus income or missing protection. What the accountant can raise, and what sits with the Equity & General financial planner, is set out in who does what.

Is anyone exempt from the £30,000 threshold?

HMRC's announcement says there are certain exemptions from Making Tax Digital for Income Tax, including for customers who are digitally excluded, with guidance available on GOV.UK. Beyond that, the exemption position for the £30,000 group has not yet been set out in the same detail as for the £50,000 group already using the service. A client is not required to sign up voluntarily before the mandatory date. Doing so early gives the client a working year with digital records in place before 6 April 2027, ahead of the first mandatory filing deadline.