Just six months from now, on 6 April 2027, Making Tax Digital (MTD) for Income Tax will reach a whole new group of people. If your income (not profit) from self-employment and property adds up to more than £30,000, you’ll need to keep digital records and send HMRC quarterly updates using recognised software.
HMRC published a reminder on 5 October urging everyone affected to sign up early, and we’d say the same. Here’s what it means for you.
Who’s affected?
Anyone who is a sole trader, a landlord, or both, with a combined turnover over £30,000. HMRC estimates around a million more people will be brought in from April 2027, on top of those earning over £50,000 who have been using MTD since April 2026.
The important bit is that HMRC looks at your turnover, not your profit. That means your gross income before any expenses are taken off.
A simple example
Sarah runs her groups and her takings for the year come to £26,000 before expenses like venue hire and stock. She also rents out a flat that brings in £6,000 a year.
Her profit might be well under £30,000, but her combined turnover is £32,000, so Sarah will need to use MTD from April 2027.
If Sarah only had her group income of £26,000, she wouldn’t be in from 2027, but she would be from April 2028, when the threshold drops again to £20,000.
Which year counts?
For the April 2027 start, HMRC will look at the income on your 2025/26 tax return – the one due by 31 January 2027. So it’s worth checking your figures now rather than waiting.
What actually changes?
- You’ll keep digital records of your income and expenses through the year
- Every three months, you’ll send HMRC a short summary of your income and expenses. These aren’t extra tax returns – just quick updates
- You’ll still finish the year with a final return, using the same software
The updates are due on 7 August, 7 November, 7 February and 7 May. The good news is that if your records are kept up to date as you go, there’s no big scramble in January.
What should you do now?
- Check your turnover – add up your gross income from self-employment and property for 2025/26 (You can use the MalgraBooks Reports in your dashboard to check this)
- Sign up early on GOV.UK – you’ll need to be registered for Self Assessment and have sent a tax return in the last two years. Signing up early gives you time to check your details are right and get used to the process before it becomes compulsory
- Choose your software – quarterly updates have to be sent through software recognised by HMRC
How MalgraBooks helps
MalgraBooks is recognised by HMRC for Making Tax Digital, and it’s built around the way you already work. Your Weekly Franchise Accounts, income, expenses and mileage are all recorded as you go, so your quarterly updates are pulled together from records you’re already keeping. No extra spreadsheets, no last-minute panic.
If you’re not with us yet, take a look at our packages page to see which option suits you. And if you’re not sure whether MTD applies to you, just drop us a message and the team will be happy to help.
You can find HMRC’s original announcement on GOV.UK.
