Making Tax Digital is already here. For many sole traders and landlords, it’s no longer something that’s coming down the track – they’re already getting to grips with digital record keeping and submitting quarterly updates to HMRC. But in 2027, MTD is coming for more of you.

From 6 April 2027, sole traders and landlords with qualifying income (that’s sales, not profit) of more than £30,000 will need to use MTD for Income Tax – meaning that they will be required to report their income and expenses to HMRC each quarter. It’s a significant change to the way your tax affairs are managed, so it really does pay to plan for it now.

What counts as qualifying income?

Qualifying income is your total income from self-employment and/or property rental, before any expenses and tax are taken off.

HMRC will look at your 2025/26 tax return to work out whether you need to join MTD from April 2027. So, if your qualifying income in 2025/26 was £35,000, for example, you’ll be in the 2027 group.

So, what actually changes?

MTD means keeping your income and expenses in compatible digital software and sending HMRC quarterly updates. You’ll still have an annual tax return, but instead of leaving everything until the end of the year, you’ll be checking in with HMRC throughout the year.

Not sure what happens next?

If you think MTD might be on the horizon, now is a good time to get yourself organised. Getting the right software in place and getting used to keeping digital records now could save you a lot of hassle later.

Need a hand getting ready? We can help you work out what you need to do and get everything set up, without the tax jargon or last-minute panic.