Landlords with income over £30,000 urged to prepare for digital tax
UKPulse Money Desk
Landlords and sole traders with a gross income above £30,000 have six months to prepare for Making Tax Digital for income tax, which becomes compulsory for them on 6 April 2027.
- Making Tax Digital for income tax becomes compulsory for landlords and sole traders with gross income over £30,000 on 6 April 2027.
- Around 1,077,000 additional landlords and sole traders are expected to join the scheme.
- Those joining will need to keep digital records and use compatible software for quarterly income and expense summaries.
HM Revenue and Customs (HMRC) is encouraging landlords and sole traders with a gross income exceeding £30,000 to sign up early for Making Tax Digital (MTD) for income tax. The scheme becomes mandatory for this group on 6 April 2027.
The threshold for MTD includes combined income from property and self-employment before any deductions for expenses or tax allowances. HMRC estimates that approximately 1,077,000 additional landlords and sole traders will join.
Craig Ogilvie, HMRC’s director of Making Tax Digital, stated that signing up early allows individuals to prepare and become familiar with the process before it becomes compulsory. Those joining will be required to maintain digital records and use compatible software to submit quarterly summaries of their income and expenses, as well as complete their annual tax return.
This expansion follows the introduction of MTD for those with income above £50,000 in April 2026. The income threshold is set to decrease further to £20,000 from April 2028.
Why this matters: The expansion of Making Tax Digital will require a significant number of landlords and sole traders to change how they record and report their income and expenses to HMRC.
What this means for you: If you are a landlord or sole trader with a gross income above £30,000, you will need to prepare for Making Tax Digital by 6 April 2027, which includes keeping digital records and using compatible software.