Making Tax Digital from April 2027: who the £30,000 threshold catches, with examples
From 6 April 2027, sole traders and landlords with qualifying income over £30,000 must use Making Tax Digital for Income Tax: confirmed, but not yet in force for this group. Qualifying income is self-employment and property income before expenses; wages, dividends and pensions do not count.
What happened
HMRC is warning sole traders and landlords with income over £30,000 that Making Tax Digital for Income Tax becomes mandatory for them from 6 April 2027. The requirement is confirmed, but not yet in force for this group. They will need digital records, compatible software and quarterly updates to HMRC. The £50,000 group joined in April 2026, and the threshold drops to £20,000 in April 2028.
From 6 April 2027, Making Tax Digital for Income Tax extends to sole traders and landlords with turnover of more than £30,000.
Status: Confirmed, takes effect later
HM Revenue & Customs (GOV.UK) — Sole traders and landlords earning more than £30,000 urged to act now, 5 October 2026
HMRC estimates around 1,077,000 more sole traders and landlords will need to use it, based on 2024 to 2025 Self Assessment returns.
HM Revenue & Customs (GOV.UK) — Sole traders and landlords earning more than £30,000 urged to act now, 5 October 2026
Those with income over £50,000 have used the service since April 2026. The threshold falls to £20,000 from April 2028.
HM Revenue & Customs (GOV.UK) — Sole traders and landlords earning more than £30,000 urged to act now, 5 October 2026
Qualifying income is total income from self-employment and property before expenses. Employment (PAYE), a partner's share of partnership profit, dividends and pensions do not count.
HM Revenue & Customs (GOV.UK) — Work out your qualifying income for Making Tax Digital for Income Tax, 11 September 2026
HMRC assesses qualifying income from the tax return submitted for the previous tax year.
HM Revenue & Customs (GOV.UK) — Work out your qualifying income for Making Tax Digital for Income Tax, 11 September 2026
Users must keep digital records and send HMRC quarterly updates through compatible software. HMRC says the updates are short summaries, not extra tax returns.
HM Revenue & Customs (GOV.UK) — Sole traders and landlords earning more than £30,000 urged to act now, 5 October 2026
What it means
What counts is gross self-employment and property income added together, before expenses. Wages, dividends and pensions are excluded. So someone with £24,000 of turnover and £8,000 of rent has qualifying income of £32,000 and is in scope from April 2027, while an employee on £60,000 with £14,000 of rent is not. The table works through four cases.
Who is affected
- Sole traders and landlords with gross self-employment and property income over £30,000
- Employees with a side business or rental income, whose wages do not count towards the threshold
Key numbers
Every figure below is a UKCalc calculation from the stated inputs, not a figure published by any source.
A sole trader with £24,000 of turnover and £8,000 of rent has qualifying income of £32,000, so is in scope from April 2027, even though neither income on its own would be.
An employee earning £60,000 who also lets a flat for £14,000 a year has qualifying income of £14,000: wages do not count, so they are out of scope in 2027 and 2028.
What UKCalc calculated
Qualifying income: £24,000 turnover plus £8,000 rent
£32,000
| Example | Qualifying income | From April 2027 (over £30,000) | From April 2028 (over £20,000) |
|---|---|---|---|
| Sole trader, £24,000 turnover + £8,000 rent | £32,000 | in scope | in scope |
| Employee on £60,000 with £14,000 rent | £14,000 | not in scope | not in scope |
| Freelancer, £26,000 turnover | £26,000 | not in scope | in scope |
| Landlord, £36,000 gross rent | £36,000 | in scope | in scope |
- Method
- Qualifying income = gross self-employment turnover + gross property income, before expenses (HMRC guidance).
- Inputs
- Self-employment turnover £24,000 (illustrative)
- Gross rental income £8,000 (illustrative)
- Thresholds: more than £30,000 from 6 April 2027, more than £20,000 from April 2028 (HMRC)
- Assumptions
- Figures are for the tax year HMRC uses to decide (the previous year's return).
- No exemption (for example digital exclusion) applies.
Qualifying income: £60,000 salary plus £14,000 rent
£14,000
- Method
- Employment income is excluded; only the £14,000 rent counts (HMRC guidance).
- Inputs
- Salary £60,000 (illustrative; excluded)
- Gross rental income £14,000 (illustrative)
- Assumptions
- As above.
Assumptions and scope
- Figures are for the tax year HMRC uses to decide (the previous year's return).
- No exemption (for example digital exclusion) applies.
- As above.
Change any of these and the result changes. They are stated so the figure can be checked rather than taken on trust. How UKCalc produces its figures: methodology.
UKCalc's interpretation
The section below is UKCalc's analysis. It is separated from the facts above deliberately: it is arguable, and the facts are not.
The test is gross turnover, not profit, and it adds self-employment and property together. People with two modest income streams are the ones most likely to be caught unaware.
UKCalc's reading of the evidence above, not a statement by any source.
What happens next
HMRC decides who is in scope from the previous year's tax return, and will write to people it expects to qualify; it says people must still check for themselves. Those already using the service send their next quarterly update by 7 November 2026.
Questions this answers
- Who has to use Making Tax Digital from April 2027?
- Does my salary count towards the Making Tax Digital threshold?
- Is the Making Tax Digital threshold based on turnover or profit?
Sources
- HM Revenue & Customs (GOV.UK) — Sole traders and landlords earning more than £30,000 urged to act now · 5 October 2026
- HM Revenue & Customs (GOV.UK) — Work out your qualifying income for Making Tax Digital for Income Tax · 11 September 2026
Statutory figures belong to the body that publishes them. UKCalc compiles and verifies them, and any calculation built on top is UKCalc's own — see the governed rates reference.