If you are a sole trader or a landlord, and your qualifying income is over £30,000, your tax reporting changes on 6 April 2027. From that date you must keep digital records and send HMRC quarterly updates for Making Tax Digital for Income Tax.
HMRC said on 5 October 2026 that around 1,077,000 more sole traders and landlords will join from April 2027. That estimate is based on HMRC analysis of 2024 to 2025 Self Assessment returns. Your own start date is decided by a different year, as explained below. This guide from us at Pivot Cloud sets out who is in, what changes, and a checklist to work through well before April.
Are you in the April 2027 group?
You join on 6 April 2027 if your qualifying income was over £30,000 in the 2025 to 2026 tax year. That is the year that ended on 5 April 2026, and the return for it is due by 31 January 2027.
The wider rollout looks like this:
- Over £50,000 in 2024 to 2025: in from 6 April 2026
- Over £30,000 in 2025 to 2026: in from 6 April 2027
- Over £20,000 in 2026 to 2027: in from 6 April 2028
If you are already in the £50,000 group, you are already on the system. If your qualifying income is £30,000 or less for 2025 to 2026, you are not in the April 2027 group, but watch the £20,000 step in April 2028.
You can check whether you need to use Making Tax Digital for Income Tax on GOV.UK.
Qualifying income means turnover, not profit
This is the point that catches most people out. Qualifying income is your gross income from self-employment and property combined, before expenses and before tax allowances are taken off. It is not your profit, and it is not your taxable income.
Add together your total sales or fees from self-employment and your total rental income from property. Do not add income from a job, a pension, dividends, or a share of profit as a partner in a partnership. Those do not count, even though they may still need to go on your tax return.
Two Richmond examples show why this matters. A freelance designer in Richmond bills £38,000 and spends £12,000 on subcontractors, software and travel. Her profit is £26,000, but her qualifying income is £38,000, so she is in from April 2027. A landlord in Teddington receives £20,000 of rent and earns £14,000 from a small consultancy. Neither stream reaches £30,000 alone, but combined they come to £34,000, so he is in too. If you are close to the line, do the addition properly before assuming you are out.
What actually changes from April 2027
Three things change, and three things do not.
What changes:
- Digital records. You must keep digital records of your income and expenses as you go, in HMRC recognised software, rather than gathering a year of paper at the end.
- Quarterly updates. You send HMRC a short summary of your income and expenses four times a year through that software. These updates are not extra tax returns, and they do not create quarterly tax payment dates.
- A final declaration through software. You still complete a final declaration after the tax year ends, and you complete it through compatible software.
The standard quarterly deadlines are 7 August, 7 November, 7 February and 7 May. For your first year, 2027 to 2028, that means 7 August 2027, 7 November 2027, 7 February 2028 and 7 May 2028.
What does not change:
- Your tax rates. Making Tax Digital changes how you report, not how much tax you pay.
- Your payment dates. You still pay tax on the usual Self Assessment timetable.
- The final declaration itself. Quarterly updates sit alongside the final declaration, they do not replace it.
Penalty points apply from your first year
Here the April 2027 group is in a different position from the first group. For the 2026 to 2027 tax year, HMRC is not applying penalty points for late quarterly updates. That soft landing does not carry forward.
From 2027 to 2028, you receive a penalty point for each missed quarterly update or return deadline. At 4 points you receive a £200 penalty, and further missed deadlines after that can each bring another £200 penalty. A simple diary system and a monthly record keeping habit will keep you well clear of them.
Your preparation checklist
Work through these six steps between now and April 2027. Together they remove the January rush that quarterly reporting is meant to end.
1. Work out your qualifying income for 2025 to 2026
Take your 2025 to 2026 figures and add gross self-employment income to gross property income, before expenses. If you have not yet filed that return, calculate from your records now, and file in good time for the 31 January 2027 deadline. Filing early gives you a longer, calmer run up to April. If you are unsure whether an income stream counts, ask us before you decide.
2. Separate your business money
If business and personal spending still share one bank account, split them now. A separate account for your trade or rental income makes digital records far easier, and makes bank feeds in your software far more useful.
3. Choose software that fits how you work
You need HMRC recognised software that can keep digital records, send quarterly updates and complete your return. GOV.UK publishes a list of compatible products. Some are free for simple affairs, and some charge a subscription.
Think about how you work before you pick. Do you photograph receipts on your phone, or sit down at a desk once a week? Do you want your accountant to have access to the same records? Our Excel or accounting software guide compares the options, and for quarterly reporting, proper software is the practical choice for most people in this group. A spreadsheet alone cannot send a quarterly update to HMRC.
4. Start digital records before April
Do not wait until 6 April 2027 to open the software for the first time. Start recording digitally now, even if you are not yet required to. By April, entering a receipt and checking a category will be a habit, not a new skill learned under deadline pressure. If you use a bank feed, check the categories it suggests.
5. Put every deadline in your diary now
Add the four quarterly deadlines for 2027 to 2028, and the return deadline that follows the year end, to your calendar today, with a reminder a week before each one. If you work with us, we will track them with you, but your own diary is still the safety net.
6. Check exemptions, and decide who files for you
Exemptions exist, including for people who are digitally excluded, but they are not automatic for everyone who finds the change inconvenient. Check the GOV.UK guidance if you think an exemption may apply to you, and take advice before you rely on one.
You can also have an agent sign you up and handle the updates for you. To sign up yourself, you need to be registered for Self Assessment and to have submitted a tax return in the last two years. If you would like us to take this on, tell us early.
If you are self-employed, sort the basics at the same time
Many people in the April 2027 group are sole traders who have grown gradually, from a side income to a real business, without ever reviewing the basics. Registration, record keeping and expenses all sit behind the quarterly updates, and a gap in any of them will show up four times a year instead of once. Our legal considerations for self-employed professionals covers the essentials, and our VAT and MTD page sets out the wider compliance picture.
Start now, and April will feel ordinary
Making Tax Digital for Income Tax is a change in routine, not a change in tax. April 2027 will feel stressful if software choice, record keeping and diary dates are left until March, and ordinary if qualifying income is worked out this autumn, software is picked, and digital recording starts before it has to.
We at Pivot Cloud help sole traders and landlords across Richmond and South West London move to quarterly reporting without the last minute scramble. If you would like us to check whether you are in the April 2027 group, help you choose software, or take on your quarterly updates, book a free initial consultation on 020 8287 1047 or through our contact page.
Disclaimer
This guide provides general information about Making Tax Digital for Income Tax and the April 2027 £30,000 threshold 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. Pivot Cloud Ltd, registered in England and Wales under Company Registration Number 14570549, 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. Pivot Cloud Ltd accepts no liability for any loss or damage arising from reliance on the information presented in this blog.