Making Tax Digital Reaches Sole Traders Earning Over £30,000

HMRC said on 5 October that Making Tax Digital for Income Tax will apply to sole traders and landlords with a turnover above £30,000 from 6 April 2027, and it is asking them to sign up now, according to its own announcement. That is six months away. If you work for yourself and your income is near or above that line, this is the date to plan around.

The test is turnover, not profit. HMRC says it means gross income from self-employment and property before any tax allowances or expenses are taken off. A sole trader who turns over £32,000 but keeps far less after costs is still counted. Check the figure on that basis, not the one at the bottom of your return.

What changes in practice: you keep digital records through the year and send HMRC short quarterly updates of income and expenses using HMRC-recognised software, then complete your tax return as before. HMRC says the quarterly updates are not extra tax returns, but summaries. It also says the habit can save hours at return time and avoid the January rush. That is HMRC's view, and how it feels will depend on how tidy your records already are.

The rule has already started for the first group. HMRC says it became mandatory from 6 April 2026 for sole traders and landlords earning more than £50,000, and that around 1,077,000 more people will join from April 2027, an estimate based on its analysis of 2024 to 2025 Self Assessment returns. HMRC also says the threshold falls to £20,000 from April 2028, so someone under £30,000 today may still be caught later.

To sign up, HMRC says you must be registered for Self Assessment and have submitted a tax return in the last two years. There are exemptions, including for people who are digitally excluded, and HMRC lists them on GOV.UK. A list of compatible software is there too, so you can compare options before you commit to one. Signing up early, HMRC says, gives you time to choose software and get your details right in your own time.

This is a tax change, not a website one, and we are not accountants, so check your own position with HMRC or one. Our guides cover the other legal and money questions a trader's website raises, and if you have a question about the website side, get in touch.