HM Revenue and Customs has confirmed that from April 6, 2027, sole traders and landlords with a turnover of more than £30,000 will be required to use Making Tax Digital (MTD) for Income Tax. Officials are urging those affected to sign up now, before it becomes mandatory, to avoid a last-minute rush.
Six months to prepare
HMRC warned that there are just six months to go until the new rules take effect. Making Tax Digital for Income Tax will extend to sole traders and landlords earning more than £30,000 from that date. Officials said people who sign up early have more time to choose compatible software and prepare in their own time.
Craig Ogilvie, HMRC’s Director of Making Tax Digital, said: “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.”
Who is affected and how to sign up
Officials said business people need to check whether they meet the threshold, as turnover includes gross income from self-employment and property before any tax allowances or expenses are deducted. HMRC said signing up early means customers can make sure their MTD details are correct from the start and have time to choose the software that works best for them. Agents can also sign up their clients via GOV.UK.
From April 6, 2027, around 1,077,000 more sole traders and landlords will need to create digital records and use compatible software to send HMRC quarterly updates of their income and expenses and to complete their tax return, in addition to those already using the service. The quarterly updates are not additional tax returns, but short summaries. HMRC said getting it sorted now means avoiding the last-minute rush every January.
Further threshold reductions ahead
Making Tax Digital was launched for sole traders and landlords earning more than £50,000 in April this year. The threshold will decrease further to £20,000 from April 2028, bringing MTD for Income Tax to an even wider group of sole traders and landlords. Customers can learn more about how Making Tax Digital for Income Tax works by watching HMRC’s customer journey video on YouTube.
