Making Tax Digital for Income Tax starts in April 2026 for those earning over £50,000. But a second wave follows fast. From April 2027, the threshold drops to over £30,000.
If your self-employed or rental income sits between £30,000 and £50,000, MTD is coming for you. Here is what that means and what to do now.
Who Is Caught Next
From 6 April 2027, you must use MTD for Income Tax if your qualifying income is over £30,000 a year. This catches a large group who escape the first wave: smaller freelancers, tradespeople, and landlords with modest portfolios.
If your income is £30,000 or less, nothing changes for now. The threshold drops again to over £20,000 from 6 April 2028, based on your 2026/27 qualifying income. HMRC announced this at the Spring Statement 2025.
What Counts as Qualifying Income
Qualifying income is your gross income from self-employment and from UK and foreign property, added together. GOV.UK confirms that for UK tax residents, foreign property income also counts toward the threshold. Gross means before you deduct expenses.
A few things to note:
- Only self-employment and property income count. Salary from a job does not.
- It is your turnover, not your profit. £35,000 of sales with £10,000 of expenses still counts as £35,000.
- If you have both a trade and rental income, HMRC adds them together.
Many people underestimate this. Check your gross figures, not what is left after expenses.
How to Check If You Are Affected
Look at your 2025/26 tax year figures — the year ending 5 April 2026. Add up your gross self-employment income and your gross rental income.
If the total is over £30,000, you are very likely in scope from April 2027. If you are close to the line, get your records in order anyway. A good year could tip you over.
Not sure? Your Self Assessment tax return for 2025/26 holds the answer. Review it when you file.
What You Need to Do Before April 2027
You have around six months. Use them well.
Keep digital records. From April 2027 you must keep your business records digitally, not on paper or in a spreadsheet alone. Start now and the habit will be second nature.
Get compatible software. You will need MTD-compatible software to send quarterly updates to HMRC. Choose one that fits how you work — many are simple and low cost.
Sign up in good time. Do not leave enrolment to March 2027. Sign up early so any problems surface while there is still time to fix them.
Understand the rhythm. You will send four quarterly updates a year, then a final year-end submission. It is a new routine, but it replaces the old annual scramble with smaller, regular tasks.
What Quarterly Updates Look Like
Each quarter you send HMRC a summary of your income and expenses through your software. The deadlines follow the standard pattern: updates are due one month and seven days after each quarter ends.
These updates are cumulative from 6 April. Each one builds on the last, so your latest update always shows your year-to-date position. Mistakes can be corrected in the next update — there is no need to resend old ones.
How iFiler Can Help
iFiler is HMRC-recognised software for MTD Income Tax quarterly updates. It keeps your digital records in one place and sends your updates to HMRC. It is built for exactly this job — simple quarterly filing without the fuss.
It is free for now, so there is no cost to getting your records digital well before the 2027 deadline.
Final Thought
April 2027 is only about six months away, and it passes quickly. The businesses that start keeping digital records now will barely notice the switch. Those that wait will face a last-minute scramble.
Check your 2025/26 figures today. If you are over £30,000, your MTD journey starts now.
Frequently Asked Questions
Turnover. HMRC looks at your gross income from self-employment and property before expenses are deducted.
No. Only self-employment and property income count, and property income includes both UK and foreign property for UK tax residents. Employment income under PAYE is ignored.
The threshold is over £30,000, so £30,000 exactly keeps you out — for now. But watch your figures each year.
You join MTD earlier, from April 2026. The 2027 change does not alter your position.
You will be breaking the rules. From 2027/28, late quarterly updates earn penalty points, and points lead to financial penalties. Get compliant before the deadline.
Disclaimer:
This guide provides general information about Making Tax Digital for Income Tax as of October 2026. Tax rules and HMRC guidance can change. Always consult with a qualified tax professional about your specific circumstances. That’s what we’re here for. In accordance with our normal practice this reference is given in good faith and in confidence, without legal liability on the part of the author or the company. The author assumes no responsibility or liability for any errors or omissions in the content of this site
The information provided in this blog is for general guidance and educational purposes only and does not constitute financial, tax, accounting or legal advice. iFiler, registered in England under Company Registration Number 15996173, has prepared this content to offer general insights into financial and taxation matters. Although every effort is made to ensure the accuracy and relevance of the information at the time of publication, no guarantee is given regarding completeness, accuracy or suitability for your specific circumstances.
Readers should not act, or refrain from acting, based solely on the information contained in this content. Professional advice tailored to your personal or business situation should always be obtained before taking any financial or tax related decision. iFiler accepts no liability for any loss or damage arising from reliance on the information presented in this blog.
