From 6 April 2027, Making Tax Digital for Income Tax extends to qualifying sole traders and landlords whose qualifying income was more than £30,000 in 2025/26. This is the second phase of the rollout, after the £50,000 group that began in April 2026.
Key Takeaways
- The £30,000 phase begins on 6 April 2027.
- HMRC will use qualifying income for 2025/26.
- The threshold is tested against gross qualifying income before expenses.
- Relevant property and self-employment sources are combined.
- The threshold reduces again to more than £20,000 from April 2028.
Will the £30,000 Threshold Affect You?
We help sole traders and landlords check qualifying income across every source, confirm which MTD phase applies and put digital records in place before the first quarterly update is due.
Who Must Join MTD from April 2027?
An individual generally needs to use MTD for Income Tax from 6 April 2027 if they are registered for Self Assessment, receive income from self-employment or property, and had qualifying income of more than £30,000 in 2025/26. HMRC's Making Tax Digital for Income Tax guidance sets out the criteria.
How Is the £30,000 Threshold Calculated?
The test is not applied separately to each business and property. It is applied to total qualifying income across all relevant sources.
Example
A taxpayer receives:
- £19,000 in self-employment income; and
- £15,000 in gross rental income.
The combined qualifying income is £34,000, which is above the £30,000 threshold, even though neither source reaches it on its own.
Qualifying income is measured before expenses. A taxpayer whose profit is well below £30,000 can still be inside the April 2027 phase if gross qualifying income is above it.
What About Jointly Owned Property?
Only the taxpayer's own share of the property income normally counts. HMRC gives the example of a jointly owned property producing £50,000 where two siblings receive equal shares. Each individual's qualifying income is £25,000, assuming neither has another qualifying source. You can work through the detail in HMRC's qualifying income guidance.
What Happens in April 2028?
From 6 April 2028, MTD extends to individuals with qualifying income of more than £20,000 in 2026/27. See the Making Tax Digital update notice for the published detail.
Does Anything Else Count Towards the Threshold?
For a UK-resident taxpayer, HMRC's guidance says qualifying income includes both UK and foreign property income. Different considerations can apply to non-UK residents.
Dividends do not form part of qualifying income, and neither does PAYE employment income.
Tax Myth Buster
The £30,000 threshold applies separately to each rental property or business.
Relevant income from all qualifying self-employment and property sources is generally combined before the threshold is applied.
Not Sure Your Income Is Over £30,000?
We can calculate your combined qualifying income from self-employment and property, confirm whether you fall into the April 2027 phase and set up compatible software in good time.
Request a Free QuoteFrequently Asked Questions
Check Your MTD Position
We support sole traders and landlords with:
- MTD Qualifying Income Review
- £30,000 & £20,000 Threshold Checks
- Digital Record Keeping
- Quarterly Updates To HMRC
- Landlord & Property Tax
