Making Tax Digital April 2027: Do Sole Traders and Landlords Earning £30,000+ Need to Sign Up?

By Umesh Kumar, founder of TaxToTech · Last updated: November 14, 2026

The Making Tax Digital timeline for Income Tax

Source: GOV.UK: find out if and when you need to use MTD for Income Tax.

Partnerships will join later. HMRC says it will set out that timeline in future.

How “qualifying income” works

HMRC adds together your gross income from:

• Self-employment (sole trader turnover), and
• Property (UK and overseas rental income).

Wages, pensions, dividends and savings interest don’t count towards the threshold.

Examples (2025/26 tax year):

Because HMRC uses your 2025/26 Self Assessment return to decide, the tax return you’re filing by 31 January 2027 is the one that matters. HMRC says it reviews returns and writes to people who are over the threshold. If you don’t get a letter, it’s still your responsibility to check.

What changes day to day

1. Digital records. Record each income and expense item in software (or linked spreadsheets) as you go, not in a shoebox at the end of the year.
2. Quarterly updates. Send HMRC a short summary of income and expenses every quarter. HMRC stresses these are not extra tax returns. Deadlines are 7 August, 7 November, 7 February and 7 May.
3. Year-end tax return. Submit your final return through the software by 31 January after the tax year ends, and pay any tax due by the same date.

For the 2027/28 tax year, your first MTD quarterly update will be due by 7 August 2027.

What a quarterly update actually looks like

People often picture quarterly updates as four mini tax returns. They aren’t. A quarterly update is a summary of income and expenses by category for that period, generated from the records already in your software.

If you’ve kept your records up to date, sending one usually takes a few clicks. There are no tax calculations to agree and no payments attached. Payment dates for Income Tax don’t change: payments on account are still due on 31 January and 31 July, with any balancing payment on 31 January.

The standard quarters for a tax year run:

You can correct mistakes in a later update or in the final return, so a small error in one quarter isn’t a disaster. Separate updates are needed for each income source, such as a self-employment business and a UK property business, but your software normally handles this for you.

Penalties: what happens if you’re late

MTD uses a points-based system for late submissions (GOV.UK penalties guidance):

• Each missed quarterly update or tax return deadline earns one penalty point.
• At 4 points you get a £200 penalty, and another £200 for every further missed deadline.
• Points below the threshold expire after 24 months.

Late payment penalties are separate. For 2027/28 tax, payment more than 15 days late costs 4% of the tax owed at day 15. Another 4% is added at day 30, and after that there’s a 10% yearly rate charged daily. In your first year under the new rules, you get 30 days before penalties start.

How to sign up (step by step)

1. Check you’re registered for Self Assessment and have filed a return in the last two years. Both are needed to sign up.
2. Use HMRC’s checker tool on GOV.UK to confirm whether and when you must join, and whether you might be exempt.
3. Choose HMRC-recognised software. GOV.UK keeps a list of compatible products. Bridging software can connect a spreadsheet if you prefer.
4. Sign up on GOV.UK with your Government Gateway login, or ask your accountant or agent to sign you up.
5. Authorise your software to connect to HMRC.
6. Start recording from 6 April 2027 at the latest. Many people do a trial run before then.

HMRC’s message is that people who sign up early have more time to choose software and get comfortable with it (HMRC, 5 October 2026).

Choosing software: what to look for

AI features such as auto-categorising transactions and reading receipts are becoming standard. See our guides to AI accounting software for small business taxes and choosing AI tax software.

Can you be exempt?

Some people can be exempt, including those who are digitally excluded. That could be because of age, disability, location or another reason that makes using software impractical. Exempt people still file a normal Self Assessment return. You can check exemptions with HMRC’s tool, and HMRC also lets you apply if you think you qualify.

Landlords: two changes on the same day

6 April 2027 is also the day the new property income rates of 24%, 44% and 49% start for individuals in England, Wales and Northern Ireland. Read our explainer on the UK savings and rental income tax rise to plan for both at once.

Practical tips for a smooth start

• Open a separate bank account for business or rental income. It makes categorising far easier.
• Agree a routine. Ten minutes a week of reconciling beats a stressful week every quarter.
• Keep using your accountant. Agents can sign you up and file on your behalf.
• Watch for scams. HMRC will not ask for passwords by text or email. Sign in through GOV.UK directly.

Quick checklist for the next few months

1. Find your 2025/26 gross self-employment and property income and add the two together.
2. File your 2025/26 Self Assessment return on time, by 31 January 2027.
3. Pick HMRC-recognised software that fits how you work, and try it on a few months of records.
4. Sign up for MTD for Income Tax through GOV.UK once you know you’re in scope.
5. Put the quarterly deadlines in your calendar: 7 August, 7 November, 7 February and 7 May.
6. Tell your accountant or agent so they can link your account and plan the extra work.

Making Tax Digital FAQ

Conclusion

If your 2025/26 self-employment and property turnover was over £30,000, Making Tax Digital applies to you from 6 April 2027. That’s true even if your profit was much lower. Sign up early, pick HMRC-recognised software, open a separate account and practise before the first quarterly deadline on 7 August 2027. If you’re unsure whether you’re in or exempt, use HMRC’s checker or ask a qualified accountant.