Checked against GOV.UK on 14 August 2026
The second phase of Making Tax Digital brings in sole traders and landlords with qualifying income over £30,000, from 6 April 2027. The income tested is on the tax return for 2025 to 2026 — the return due by 31 January 2027.
The return you file by 31 January 2027 is the one that decides whether you are in from April 2027. That return is filed the ordinary way. If the gross self-employment and property figures on it come to more than £30,000, you must be keeping digital records from 6 April 2027 and your first quarterly update is due 7 August 2027.
| Qualifying income | On the tax return for | You must use MTD from |
|---|---|---|
| Over £50,000 | 2024 to 2025 | 6 April 2026 — already in force |
| Over £30,000 | 2025 to 2026 | 6 April 2027 |
| Over £20,000 | 2026 to 2027 | 6 April 2028 |
| £20,000 or less | — | Automatically exempt, unless your circumstances change |
You can sign up voluntarily before you are required to. HMRC lets you sign up for the current tax year or the next one. If you sign up part-way through a tax year you will need to use compatible software to send any quarterly updates already missed for that year.
While you are volunteering, penalties do not apply to late quarterly updates — but a separate, lower penalty threshold applies to late tax returns for volunteers, with a £200 penalty at 2 points.
HMRC checks the Self Assessment return you submitted in the previous tax year and writes to confirm if you are above the threshold. HMRC's guidance is blunt about the responsibility, though: even if you do not receive a letter, you must still check your qualifying income yourself.
Check which year applies to you →
General information about UK tax rules, not tax advice. Your own circumstances and HMRC's official guidance govern your position. If you are unsure, speak to an accountant or contact HMRC. Tax rules change — if this page is more than a few months old, check the GOV.UK pages linked above. Found an error? Email hello@getaxionlabs.com and we will correct it.