When does Making Tax Digital apply at £30,000?

From 6 April 2027. HMRC tests it against your qualifying income for the 2025/26 tax year — the return due by 31 January 2027. If that income was more than £30,000, you will need to use Making Tax Digital from 6 April 2027.

Is the £30,000 MTD threshold based on profit or turnover?

Turnover. HMRC defines qualifying income as your total income from self-employment and property before expenses. Your costs, including mortgage interest on a rental, do not reduce it.

Does my salary count toward the MTD threshold?

No. Employment income taxed through PAYE does not count as qualifying income. Nor do dividends, including from your own company, your share of partnership profit as an individual partner, the State Pension or private pensions.

Do my rental income and self-employment count separately for MTD?

No — they are added together. Qualifying income is your total from self-employment and property combined, measured per person. So £18,000 of rent plus £14,000 of freelancing is £32,000, which is over the £30,000 threshold.

Will HMRC sign me up for Making Tax Digital automatically?

No. HMRC may write to tell you that Making Tax Digital applies to you, but you or your agent still have to actively sign up. A letter is not the same as being enrolled.

Making Tax Digital · 7 min read · 22 August 2026 · Written by the Filed Tax team

Will Making Tax Digital hit you in April 2027? Your next tax return decides

Making Tax Digital widens on 6 April 2027, dropping from £50,000 to £30,000. The part almost nobody realises: it isn't decided by what you earn next year. It's decided by the tax return you're about to file this January.

The rule: if your qualifying income was more than £30,000 in the 2025/26 tax year, you'll need to use Making Tax Digital from 6 April 2027. That's the return due by 31 January 2027.

The two-year lag that catches people out

Most people assume MTD works like a speed limit — cross the threshold, and it applies. It doesn't. HMRC looks backwards, at a specific past tax year:

From 6 April 2026 — if qualifying income was over £50,000 in 2024/25.
From 6 April 2027 — if it was over £30,000 in 2025/26.
From 6 April 2028 — if it was over £20,000 in 2026/27.

So the figures you put on your 2025/26 return — the one sitting in front of you this winter — are what determine whether your reporting changes about ten weeks after you file it. A quiet year in 2026/27 won't rescue you; a busy year in 2025/26 will catch you.

That's the genuinely useful thing to know now, in August: you can work out today whether April 2027 applies to you, because the tax year it's based on has already finished.

What actually counts toward the £30,000

This is where most of the confusion sits, and it costs people real accuracy. HMRC's definition of qualifying income is precise: it's "your total income from self-employment and property. This is the amount before expenses (also known as turnover)."

Two consequences, both of which surprise people:

1. It's turnover, not profit

Your expenses don't reduce it. Neither does mortgage interest on a rental. A landlord taking £33,000 in rent with £15,000 of interest and costs has an £18,000 profit — and is still over the threshold, because the test is the £33,000.

2. It's added together, per person

Self-employment and property aren't tested separately. They're combined, for you as an individual — not per business, not per property.

What counts

Self-employment turnover — from all your trades
Property income — UK and, if you're UK resident, overseas
Your share of jointly owned property income

What doesn't count

This list is the reassuring half, and it's under-reported:

Employment (PAYE) income — your salary is irrelevant to the threshold, however large
Dividends — including from your own company
Your share of partnership profit as an individual partner
State Pension and private pensions
Income from UK REITs or PAIFs
Qualifying care relief payments
Transition profits from basis period reform
One-off UK land transactions

Three worked examples

Because it's easier to see than to explain.

1. The freelancer who thinks they're under. Turnover £34,000, expenses £9,000, profit £25,000. They look at £25,000 and relax. But the test is turnover — £34,000. In from April 2027.

2. The landlord with a side hustle. Rent £18,000, freelance work £14,000. Each is comfortably under £30,000, so they assume they're fine. But the two are added: £32,000. In from April 2027.

3. The employee with a flat to let. Salary £45,000 through PAYE, rent £11,000. The salary doesn't count at all. Qualifying income is £11,000. Not in — and won't be at £20,000 in 2028 either, unless the rent rises.

If you're near the line, our free 30-second check is a decent first sanity test, and we're happy to work it out with you properly.

Not sure which side of £30,000 you're on?

We'll work it out from your actual figures — and if you're in, we handle the whole thing. From £25 a month.

Get started →

If you are in, what changes?

From 6 April 2027 your reporting shifts from one annual return to five filings a year: four quarterly updates plus a final declaration.

Records kept digitally, in MTD-compatible software, as you go.
Quarterly updates due 7 August, 7 November, 7 February and 7 May.
A final declaration and your tax payment, still due 31 January.

Two reassurances worth repeating, because the coverage gets both wrong: quarterly updates carry no tax payment, and they're cumulative — each covers the year to date, so an early mistake is corrected by the next one. We've set out the full mechanics in what MTD really costs you.

Don't wait to be enrolled. HMRC may write to you, but a letter isn't the same as being signed up — you or your agent have to actively sign up. This is the single most common gap among people already in the first wave, and it'll repeat in 2027.

What to do between now and April 2027

1. Work out your 2025/26 qualifying income now. The tax year has ended, so the number is knowable today — gross self-employment plus gross property, added together.
2. File your 2025/26 return by 31 January 2027. That's what HMRC tests. The dates that matter →
3. If you're over £30,000, get set up before 6 April 2027 — compatible software, digital records, and signed up. Starting the tax year already organised is far easier than retrofitting in August.
4. If you're under, check again next year. The threshold falls to £20,000 from April 2028, tested on your 2026/27 income — the year you're in right now.

Common questions

When does the £30,000 threshold start? 6 April 2027, tested on your 2025/26 qualifying income.

Is it profit or turnover? Turnover — income before expenses. Costs and mortgage interest don't reduce it.

Does my salary count? No. PAYE employment income is excluded entirely, as are dividends and pensions.

Are rent and self-employment counted separately? No — added together, per person.

Will HMRC enrol me? No. You have to sign up yourself, even after they write to you.

One return now, five filings later

We do your 2025/26 return, tell you exactly where you stand for April 2027, and take the quarterly updates off your hands if you're in. £25 a month, or £195 for a one-off return.

See pricing →

Related guides

This guide is general information, not personal tax advice. Figures and dates are for the 2026/27 tax year and can change at each Budget — always confirm the current position on GOV.UK or ask us to check your situation.

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