Sole traders and landlords earning over £30,000 must prepare for Making Tax Digital

Making Tax Digital (MTD) for Income Tax will become mandatory for sole traders and landlords earning over £30,000 from 6 April 2027. Around 1,077,000 additional people will need to join the service. The £30,000 threshold is based on gross income from self-employment and property before any allowances or expenses are deducted. Those affected must create digital records and use compatible software to send HMRC quarterly updates of income and expenses. HMRC recommends signing up early on GOV.UK to have time to choose suitable software and ensure details are correct from the start. The quarterly updates are short summaries, not additional tax returns. This follows the successful launch for those earning over £50,000 from April 2026. The threshold will drop further to £20,000 from April 2028. To join, people must be registered for Self Assessment and have submitted a tax return in the last two years. Certain exemptions exist, including for those who are digitally excluded. Read the full guidance on GOV.UK for compatible software lists and exemption details.