Making Tax Digital at £30,000: who has to join on 6 April 2027

The three thresholds

HMRC works out your position from the Self Assessment return for the tax year in the middle column. For the April 2027 group that is the 2025 to 2026 return, due online by 31 January 2027.

How qualifying income is counted

• Add your self-employment income to your UK and foreign property income.
• Use the figures before expenses: turnover and rent received, not profit.
• For jointly owned property, only your share of the income counts.
• Employment income taxed through PAYE, dividends, the State Pension and private pensions do not count.
• Income from a business or property you have stopped still counts if you have another continuing source of self-employment or property income.

GOV.UK's own example: £25,000 of rental income plus £27,000 of self-employment income is £52,000 of qualifying income. In the same way, £20,000 of rent and £12,000 of freelance turnover is £32,000, over the 2027 threshold even if the profit is far lower.

Why you may have had a letter from HMRC

HMRC reviews Self Assessment returns each year and writes to people whose qualifying income is over the threshold, confirming that they need to start. If no letter arrives, HMRC says it is still your responsibility to check. You may be exempt if you are digitally excluded; GOV.UK has a separate page on exemptions, and anyone exempt keeps filing a normal Self Assessment return.

Your first year of deadlines (2027 to 2028)

Each quarterly update is cumulative: it covers everything from 6 April to the end of that period, so corrections flow into the next update.

If you choose calendar quarters (1 April to 30 June and so on), the deadlines are the same dates.

Penalties apply from your first quarter

The no-penalty rule for late quarterly updates covers only the 2026 to 2027 tax year. If you join in April 2027, points apply from your first update.

• One penalty point for each missed quarterly update or tax return deadline, and only one point per deadline even if you have several businesses.
• At 4 points you pay £200, and another £200 for each further missed deadline.
• Below 4 points, each point is removed 24 months after the missed deadline. At 4 points, you clear them by filing on time for 12 months and sending anything outstanding from the previous 24 months.
• Late payment for 2027 to 2028: 4% of the tax owed at day 15, another 4% at day 30, then 10% a year on the balance. In your first year you have 30 days, once, to pay or set up a payment plan before penalties start.

Software: free options exist

You need software that works with Making Tax Digital for Income Tax. HMRC's software finder lists products that have been through its recognition process, and GOV.UK notes that free products are available for people with simple tax affairs, with limits on how they can be used. HMRC does not recommend any product. The finder is linked from https://www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-income-tax

Checklist before 6 April 2027

• Add up your 2025-26 self-employment turnover and your share of rent received.
• File your 2025-26 Self Assessment return by 31 January 2027; HMRC uses it to decide.
• Pick software from HMRC's finder and check it handles property income and, if needed, joint ownership.
• Sign up with the user ID you use for Self Assessment; you can sign up voluntarily before April 2027.
• Keep digital records from 6 April 2027 and put the four quarterly deadlines in your calendar.
• If a letting agent collects your rent, arrange to receive statements every month, not once a year.

Where Letting Ledger fits

Letting Ledger is for landlords whose agent sends PDF statements. It reads them, splits each line between joint owners, keeps the digital records and builds each owner's quarterly figures with the statement lines behind them. It is not yet recognised by HMRC, so for now you or your accountant send the figures through recognised software; we will tell customers the day direct submission goes live.

Questions