Making Tax Digital from April 2027: the £30,000 band

On 6 April 2027 Making Tax Digital for Income Tax reaches the £30,000 band. The first wave, in April 2026, took landlords and sole traders with qualifying income over £50,000. The second takes everyone over £30,000, and it is decided by a tax return most landlords have not filed yet: the 2025 to 2026 return, due on 31 January 2027.

That gap is the useful part of this article. Between now and next January you can still change what the figure looks like on paper, get your records into a shape that survives quarterly reporting, and pick software without a deadline behind you.

Who is in from April 2027

You are in if your qualifying income was over £30,000 on your 2025 to 2026 Self Assessment return.

Qualifying income is a wider and blunter figure than the profit you are used to thinking about:

• It is property income and self-employment income added together.
• It is counted before expenses, so it is turnover, not profit. A landlord with £34,000 of rent and £18,000 of mortgage interest, letting agent fees and repairs is inside the band, even though the taxable profit is far lower.
• UK property and foreign property both count if you are UK resident.
• Employment income, pensions, dividends and partnership profit shares do not count. A landlord earning £60,000 in a job with £12,000 of rent is not in the band on that rent alone.
• On a jointly owned property, only your share counts. Two people sharing £50,000 of rent equally have £25,000 each, and neither is caught by the £30,000 test on that property alone.

The thresholds fall in three steps, and each one is read from the return filed the previous year.

Source: Check if you need to use Making Tax Digital for Income Tax and Work out your qualifying income on GOV.UK.

If you want the answer for your own figures, our free Making Tax Digital checker gives the April it starts for you and every deadline for that year.

How you will find out, and when

HMRC works it out from the return you file, then writes to the people it affects. For the April 2027 wave that means the letters follow the 31 January 2027 filing deadline, so many landlords will hear in February or March 2027, weeks before the rules apply.

Two things follow from that timing.

The letter is confirmation, not a warning. If you can already see that your 2025 to 2026 turnover will pass £30,000, you have a year of notice that HMRC has not sent yet.

Filing early does not bring the rules forward. The date is fixed at 6 April 2027 whatever day in the window you file. Filing early only means you learn sooner.

What actually changes on 6 April 2027

Three things, and the first is the one landlords underestimate.

1. Records become digital and continuous. Income and costs have to be recorded digitally as they happen, in software that can talk to HMRC. A shoebox of receipts typed up in January stops being allowed, even if the final numbers are right.

2. Four updates a year. Each quarterly update is a running total of the tax year so far for each business you have, so a landlord with property income sends property figures and a sole trader sends theirs. The deadlines do not move:

You can choose calendar update periods instead, running from 1 April to 30 June, 30 September, 31 December and 31 March, with the same four deadlines. Choose before the first update of the year, because the choice is fixed for that year.

3. A final declaration replaces the Self Assessment return. After the four updates you finish the year in the same software, adding anything the updates do not cover and claiming your allowances. For the 2027 to 2028 tax year that is due by 31 January 2029, the date the return would have been due anyway. Tax is still paid on the same dates.

Nothing about what you owe changes. The rate you pay, Section 24→ relief on mortgage interest, the property allowance and the wear and tear rules are all untouched. What changes is how often you report.

The penalties, in plain figures

Late submission runs on points. Each quarterly update or return deadline you miss is one point, and you can only pick up one point per deadline. At 4 points there is a £200 penalty, and another £200 for each later miss.

Points below the threshold expire 24 months after the deadline you missed. Once you have hit 4, they stop expiring on their own: you clear them by submitting on time for 12 months and sending anything still outstanding from the previous 24 months.

Late payment is charged separately, as a percentage of the tax owed with interest on top, and the percentages step up the longer it is outstanding. HMRC sets these out in Penalties for Making Tax Digital for Income Tax.

The practical point: a missed update is not a fine on its own, but it is a point on a card that lasts two years, and four of them is £200 and a clock that no longer resets itself.

What to do between now and April 2027

Work out your own figure now. Add your gross rent to any self-employment turnover for the 2025 to 2026 tax year. If it is anywhere near £30,000, assume you are in. Our checker does the arithmetic and gives you the date.

Get the records digital before it is compulsory. The quarterly update itself takes minutes when the year is already recorded, and a weekend when it is not. This is the part that costs people money in the first year.

Pick the software before January. You sign up through it, so the choice is the step that unblocks the rest. HMRC keeps a list of compatible products, and free options exist for simple affairs.

Consider volunteering a year early. HMRC allows it, and a year of updates that carry no penalty risk is the cheapest rehearsal there is. Our guide on volunteering early sets out when it is worth it.

Check the joint ownership position. If a property is in two names, each owner is tested on their own share, and each has their own obligation. See MTD for jointly owned property.

If a letting agent collects your rent, the duty is still yours. The agent's statement is a record of what happened; the quarterly update is yours to send. See MTD when a letting agent manages the property.

Cases that come up

My properties are in a limited company. You are outside this. Making Tax Digital for Income Tax applies to individuals, and a company files a Corporation Tax return.

I am below £30,000. Then April 2027 is not your date. The £20,000 band follows on 6 April 2028, read from the 2026 to 2027 return.

My income falls back below the threshold later. Check the current GOV.UK guidance before assuming the obligation drops away, and ask HMRC if it is close. The rule that brought you in is read from a single year's return.

I cannot use software. There is an exemption route, for example where you are digitally excluded. Apply to HMRC rather than assuming it applies to you.

Where LetCompliance fits

We keep the rental side of this in one place: rent and costs recorded as they happen, categorised the way the return needs, with the quarterly update built from them and sent to HMRC. It is free for one property, and £14.99 a month covers three.

We are not going to tell you that software makes the deadline go away. What it does is make the four updates a review rather than a reconstruction, which is the difference between ten minutes and a lost Sunday.

If April 2027 is your date and it is still months out, put yourself on the reminder list on our Making Tax Digital page. Two emails: one in February 2027 when HMRC starts writing, one in late March before it starts.