HM Revenue and Customs (HMRC) is encouraging sole traders and landlords with a turnover exceeding £30,000 to sign up for Making Tax Digital (MTD) for Income Tax, ahead of its mandatory implementation on 6 April 2027. This change will require approximately 1,077,000 more individuals to maintain digital records and submit quarterly income and expense updates using compatible software.
Craig Ogilvie, HMRC’s Director of Making Tax Digital, stated that signing up early allows individuals to prepare and familiarise themselves with the process before it becomes mandatory. The turnover threshold includes gross income from self-employment and property before any deductions.
MTD for Income Tax has been mandatory for sole traders and landlords earning over £50,000 since April 2026. The threshold is planned to decrease further to £20,000 from April 2028. To sign up, customers must be registered for Self Assessment and have submitted a tax return within the last two years.