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Guide · Tax and MTD

Making Tax Digital from April 2027: what to do if your turnover is over £30,000

The limit for Making Tax Digital falls in April 2027, and it catches a lot of tradespeople who think of themselves as small. Here's how to tell if you're in, and a plan from now to your first update.

Stephen Evans, editor
Figures checked against GOV.UK and HMRC guidance
Last checked 29 Oct 2026 · Next review Feb 2027

The short answer

Tax year 2026/27

You have to use Making Tax Digital from 6 April 2027 if your turnover from self-employment and property, before expenses, is over £30,000 on your 2025/26 tax return, which is due by 31 January 2027. Before April, sign up and choose software that works with MTD. From 6 April 2027 you keep digital records and send an update every quarter, starting on 7 August 2027, with penalty points for late updates from the first one. Your first tax return through the software is for 2027/28, due 31 January 2029.

April 2027 group
WhoSole traders and landlords with turnover over £30,000
Decided byYour 2025/26 tax return, due 31 January 2027
Start6 April 2027
First update7 August 2027, with penalty points from the start
First MTD tax return2027/28, due 31 January 2029

Am I in for April 2027?

HMRC looks at your 2025/26 tax return. Add up your turnover from self-employment and any rent you receive, before expenses. If the total is over £30,000, you use Making Tax Digital from 6 April 2027.

  • Counts: everything you invoiced for your trade, materials included, and your share of rent from any property you let out.
  • Doesn't count: wages from a job taxed through PAYE, your share of a partnership's profit, pensions and dividends.

For a CIS subcontractor, turnover is the gross pay on your payment and deduction statements, before the deduction comes off. Our main Making Tax Digital guide explains that, and the quarterly updates, in more detail.

If your turnover is £20,000 or less, you're exempt. Between the two, you join a year later, in April 2028, if your 2026/27 turnover is over £20,000.

If you started trading during 2025/26

If you were a sole trader for only part of the year, HMRC scales your turnover up to a full year where it has the figures.

Example. You went self-employed on 6 October 2025 and invoiced £16,500 by 5 April 2026. That's six months, so HMRC doubles it to £33,000. You're in from April 2027, even though you never earned £30,000 in a year.

You can't sign up for MTD until you've sent at least one tax return. If 2025/26 is your first, send it well before 31 January so there's time to sign up before April.

What are the dates?

DateWhat happens
31 January 2027Deadline for your 2025/26 tax return. If its turnover from self-employment and property is over £30,000, you're in.
By 5 April 2027Sign up, choose software that works with MTD and connect it to your HMRC account.
6 April 2027Start keeping digital records of every sale and cost.
7 August 2027First quarterly update, covering 6 April to 5 July. Penalty points apply from this update onwards.
7 November 2027Second quarterly update, covering 6 April to 5 October.
31 January 2028Your 2026/27 tax return, sent the usual way, and the tax for it.
7 February 2028Third quarterly update, covering 6 April to 5 January.
7 May 2028Fourth quarterly update, covering the full year to 5 April.
31 January 2029Your first tax return through MTD software, for 2027/28, and the tax for it.

January 2028 is the month to plan for. Your 2026/27 return goes in the old way while you're already in the middle of your first MTD year. The 2026/27 tax bill is due the same day, along with any payment on account.

What should I do before April 2027?

  1. Send your 2025/26 return early. Check the turnover figure before you send it, because it decides whether you're in. HMRC writes to you if it's over the limit, but if no letter comes it's still on you to check. What HMRC's letters mean.
  2. Check you're not exempt. The main exemption you can apply for is being unable to use software because of age, health, disability, religious belief or no internet access where you live or work. HMRC won't accept being unfamiliar with software, having few records or the cost as reasons.
  3. Choose software. It has to be on HMRC's list for MTD for Income Tax, not only VAT, and cover every income source you have, rent included. Some job management apps send the updates themselves. Compare MTD software.
  4. Sign up on GOV.UK. You'll need the sign-in details you use for self-assessment, your business name as it appears on your invoices, your business address and your trade. You may be asked to prove your identity with your passport or driving licence through a phone app.
  5. Set up your records. A separate bank account linked to the software saves most of the work: payments come in automatically and you match receipts to them. Photograph receipts as you go.
  6. If you have an accountant, agree who sends what. They can sign you up and send updates for you, but the penalty points land on you.

Should I start early, this tax year?

You can sign up now for either the 2026/27 tax year or for 2027/28. Signing up now for 2027/28 gets the paperwork done without changing anything this year. Joining for 2026/27, as a volunteer, has a catch.

Volunteer for 2026/27Sign up for 2027/28
RecordsCatch up from 6 April 2026 and send the updates already dueStart on 6 April 2027
Late quarterly updatesNo penalty points while you volunteerPoints from the first update
Penalty rulesThe new rules apply straight away and you can't go backThe new rules apply from 2027/28
First-year allowance on late paymentUsed up now, so you get 15 days from April 202730 days in 2027/28

For most people, signing up for 2027/28 before April and trying the software on this year's records, without sending them, gets the practice without the catch.

What are the penalties?

You get one penalty point for each missed deadline: each quarterly update and the tax return. At 4 points you pay a £200 penalty, then another £200 each time you miss a deadline after that. While you have fewer than 4, each point drops off after 24 months. Once you reach 4, you clear all your points by sending everything on time for 12 months and catching up anything outstanding.

Paying late is charged separately. For 2027/28, there's no penalty if you pay within 15 days. After that it's 4% of what's still unpaid at day 15, another 4% at day 30, then 10% a year from day 31. In your first year you get 30 days to pay or set up a payment plan before any penalty starts. Interest runs from the due date either way.

From April 2027 the new penalty rules apply to everyone who sends a personal tax return, not only people in MTD. Leaving MTD doesn't take you back to the old ones.

Does MTD change how much tax I pay?

No. It changes how you report, not what you owe. The tax is worked out the same way and the bill is still due on 31 January after the tax year ends, with payments on account as before. The quarterly updates don't come with a bill. What they do is show you the year building up as it happens. Our tax set-aside calculator turns that into a figure to put aside each month.

Common questions

My turnover was just over £30,000 but my profit is much lower. Am I in?

Yes. The limit is on turnover, meaning everything you were paid before taking off expenses, materials included. Profit doesn't come into it.

Will HMRC sign me up automatically?

HMRC started signing up the April 2026 group itself in September 2026, five months after they should have started. It hasn't said whether it will do the same for April 2027. Signing yourself up before April means you start on time and can check your details are right.

Do I still send a normal tax return in January 2028?

Yes. Your 2026/27 return goes in the usual way by 31 January 2028, while you're already sending quarterly updates for 2027/28. Your first return through MTD software is for 2027/28, due 31 January 2029.

Can I leave MTD if my turnover drops?

Once you're in, you can choose to leave if your qualifying income stays under the limit for three tax years in a row. If you correct your 2025/26 return before 6 April 2027 and the new figure is under the limit, you won't need to start at all.

Can my accountant do it for me?

Yes. An accountant can sign you up, keep your records if you want them to, and send the updates. Agree who does what before April, because the deadlines and penalty points are still yours.

Related toolCheck if MTD applies to you in four questionsCompareMTD software for sole traders, compared

Sources

  1. Find out if and when you need to use Making Tax Digital for Income Tax, GOV.UK. Checked 29 Oct 2026
  2. Work out your qualifying income for Making Tax Digital for Income Tax, GOV.UK. Checked 29 Oct 2026
  3. Sign up for Making Tax Digital for Income Tax, GOV.UK. Checked 29 Oct 2026
  4. Penalties for Making Tax Digital for Income Tax, GOV.UK. Checked 29 Oct 2026
  5. Penalties for Making Tax Digital for Income Tax volunteers, GOV.UK. Checked 29 Oct 2026
  6. Find out if you can get an exemption from Making Tax Digital for Income Tax, GOV.UK. Checked 29 Oct 2026
  7. Find software that works with Making Tax Digital for Income Tax, GOV.UK. Checked 29 Oct 2026

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