MTD Is Expanding Again: What £30,000+ Landlords and Sole Traders Need to Know Before April 2027

I wrote about Making Tax Digital for Income Tax back when the first threshold went live in April 2026. If you're already above £50,000 and filing quarterly updates, that post covers what the quarterly cycle actually involves, and I'd point you there first. This one is for the next group in: anyone whose combined income sits above £30,000.

Here's where things stand, as of September 2026.

The threshold most people haven't clocked yet

From 6 April 2027, MTD for Income Tax extends to sole traders and landlords with qualifying income above £30,000, based on your 2025-26 tax year figures. That's turnover, not profit, self-employment sales and rental income, added together if you have both, before any expenses come off. Seven months' notice, roughly, from where we stand now to when it actually bites.

If you sat comfortably under £50,000 last year and assumed MTD was someone else's problem, it's worth checking that number properly rather than from memory. A lot of people who felt safely outside the first round are squarely inside this one. The MTD threshold checker takes your self-employment and rental figures and tells you which threshold you're against and when it applies.

The mechanics themselves don't change between thresholds: digital records, four quarterly updates, an End of Period Statement, then a Final Declaration by 31 January in place of the old Self Assessment return. I set all of that out properly in the first post, so I won't repeat it here. What I want to flag instead is what's actually different for this second group.

What's genuinely different this time

Three things, and only one of them works in your favour.

The penalty runway is shorter, maybe non-existent. HMRC's published guidance waives penalty points for quarterly updates falling in the 2026-27 tax year specifically, that was the first cohort's soft landing. If you join from April 2027, your first quarterly updates fall in the 2027-28 tax year, after that stated grace year has already ended. HMRC hasn't spelled out what happens to people joining later, one way or the other. I'd rather you plan on no grace period at all and be pleasantly surprised, than assume you get one and find out otherwise from a penalty notice.

The combined-income rule still catches people out, and it will catch this group too. If you're a landlord with a bit of self-employed income on the side, or a sole trader with a rental property, HMRC adds both together to work out where you sit. Treating them as two separate, smaller numbers is the single most common way people misjudge which side of £30,000 they're actually on.

The software and support around this is a year more mature. This is the part that works in your favour. The first cohort went through this with less established guidance and a less mature market of compatible software. By April 2027, both should be genuinely easier to navigate than they were for the people who went first.

What to do with the next seven months

This is exactly the situation Accountability, one strand of the CAPID framework this practice runs on, is built for. Deadlines owned ahead of time, not chased at the last minute. Three things worth doing now, not next spring.

• Start keeping digital records, even informally. You don't need to wait for April 2027 to begin recording income and expenses digitally rather than reconstructing them later. The earlier it's a habit, the less it feels like a change when it becomes mandatory.
• Look at compatible software now. Not installed and forgotten, actually set up and used for a real quarter or two before you have to. A spreadsheet on its own won't satisfy MTD unless it's bridged through recognised software.
• Get your actual number checked, not guessed. If you're anywhere near £30,000 either way, run your figures through the threshold checker, or let an accountant tell you properly where you sit and when you're actually due to join, rather than working it out from a rough sense of last year's turnover.

Seven months feels like plenty of time right up until it isn't. The people who find MTD straightforward are almost always the ones who started before they had to.

None of this changes how much tax you owe or when you pay it. It only changes how and when you report it, four times a year instead of once. Handled early, it's genuinely not much more work than what you're already doing. Handled in a rush next March, it's a different story.

If you want to work out exactly where your own figures sit against this threshold, or get digital records started properly before it's mandatory, book a free discovery call and we'll go through it.

Separately, if you're VAT-registered too, don't mix this up with your VAT deadlines, they run on a completely different calendar and penalty system. I've set out this autumn's VAT quarter dates if that's the one actually due soon.