HMRC Making Tax Digital £30,000 Threshold and Quarterly Deadlines

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Making Tax Digital (MTD) for Income Tax is changing how self-employed people and landlords report their income to HMRC. If you earn more than £30,000 a year from self-employment or rental property, you may need to start using Making Tax Digital from April 2027. Instead of keeping all your records until the end of the tax year, you will need to keep digital records, send quarterly updates to HMRC and submit your tax return using compatible software.

Understanding the new rules early can help you prepare, choose the right software and avoid problems when the changes affect your business.

What is the HMRC Making Tax Digital 30000 threshold?

The £30,000 threshold is part of the government’s plan to introduce Making Tax Digital for Income Tax in stages. From 6 April 2027, the rules are expected to apply to sole traders and landlords whose qualifying income is more than £30,000, based on their 2025/26 Self Assessment tax return.

Qualifying income means your total gross income from self-employment and property rental before deducting business expenses or tax. If you have income from both sources, HMRC adds the relevant amounts together when checking whether you meet the threshold.

For example, if you earn £22,000 from your self-employed business and £12,000 from rental property, your qualifying income is £34,000. You may therefore need to follow Making Tax Digital from April 2027, provided you meet the other conditions and are not exempt.

It is important to understand that the threshold is based on income, not profit. If your business turnover is £35,000 but your allowable expenses reduce your profit to £18,000, your qualifying income may still be above the threshold.

You can read more about the changes in our guide to whether you need to use Making Tax Digital.

When does MTD apply to people earning more than £30,000?

Making Tax Digital for Income Tax is being introduced in stages, depending on qualifying income reported through Self Assessment.

The current timetable is:

• From 6 April 2026: People with qualifying income above £50,000.
• From 6 April 2027: People with qualifying income above £30,000.
• From 6 April 2028: People with qualifying income above £20,000.

If your qualifying income was above £30,000 in the 2025/26 tax year, you should prepare for the new requirements to apply from April 2027. If your income is below the relevant threshold, you may not be required to join yet, although voluntary participation may be possible.

The rules mainly affect sole traders and landlords who pay Income Tax on their business or property income. They do not automatically apply to limited companies simply because their turnover is above £30,000.

What do I need to do under Making Tax Digital?

If you fall within the rules, you will need to use software that is compatible with Making Tax Digital for Income Tax. You will use it to keep digital records of your business income and expenses and send summaries of those records to HMRC every quarter.

You will also need to submit your annual tax return through compatible software. The quarterly updates do not replace your Self Assessment tax return, and you must still check your figures, make any necessary adjustments and claim the allowances or reliefs that apply to you.

You should start by reviewing how you currently record your income and expenses. If you use paper records or a basic spreadsheet, you may need to change your process or use suitable bridging software where permitted. Choosing the right system early can make the transition much easier.

Our guide explains how to set up Making Tax Digital and what you should do before your start date.

What are the Making Tax Digital quarterly deadlines?

Under Making Tax Digital for Income Tax, you will normally send four quarterly updates during each tax year. If you use the standard tax-year reporting periods, the deadlines are as follows:

Quarterly update	Period covered	Deadline
First update	6 April to 5 July	7 August
Second update	6 April to 5 October	7 November
Third update	6 April to 5 January	7 February
Fourth update	6 April to 5 April	7 May

These standard updates are cumulative, which means each update includes the relevant information from the beginning of the tax year up to the end of that reporting period, rather than only covering the latest three months.

For example, your first update covers the start of the tax year to 5 July, while your second update includes information from the start of the tax year to 5 October.

If your accounting period ends on 31 March, you may be able to choose calendar-quarter reporting periods instead. The submission deadlines remain 7 August, 7 November, 7 February and 7 May, but the periods covered by each update are different.

You can check the official HMRC guidance on quarterly updates to confirm which reporting periods apply to you.

Do quarterly updates mean I have to pay tax four times a year?

No. Sending quarterly updates does not automatically mean you have to pay your Income Tax every three months. The updates give HMRC information about your income and expenses during the year, helping you keep track of your business figures.

You will still need to submit your annual tax return and pay the tax you owe by the usual deadline, normally 31 January after the end of the tax year. For example, tax due for the 2026/27 tax year will normally be payable by 31 January 2028.

However, you should not wait until January to think about your tax bill. Keeping your records up to date throughout the year can help you estimate your tax liability and set aside enough money to pay it when it becomes due.

What happens if I miss a quarterly deadline?

HMRC is introducing a points-based penalty system for late submissions. Under this system, you can receive a penalty point when you miss a relevant submission deadline, and once you reach the applicable threshold, a £200 penalty can be charged.

There is an important transitional arrangement for the first year of Making Tax Digital for Income Tax. HMRC has confirmed that it will not issue penalty points for late quarterly updates during the 2026/27 tax year. However, you must still keep digital records and submit the required updates before you can submit your tax return.

This temporary arrangement does not remove the normal penalties that may apply to late tax returns or late tax payments. It is therefore sensible to establish a routine for recording transactions and submitting updates well before each deadline.

How can I prepare for the £30,000 MTD threshold?

If you expect your qualifying income to exceed £30,000, you should start preparing before April 2027 rather than waiting until the new rules apply.

First, check your gross income from self-employment and property for the relevant tax year, remembering that qualifying income is calculated before expenses. Next, review your current bookkeeping system and find out whether it supports Making Tax Digital for Income Tax. You should also make sure you can keep accurate digital records of your sales, rental income, purchases and other allowable expenses.

If you already work with an accountant or bookkeeper, discuss your start date and how quarterly reporting will fit into your existing service. Getting help with software, bookkeeping and submissions can make the process easier, especially if you have income from more than one source.

Do I need an accountant for Making Tax Digital?

You do not have to employ an accountant simply because you need to use Making Tax Digital. You can manage your own records and quarterly updates if you understand the rules and are comfortable using compatible software.

However, an accountant or bookkeeper can help you choose suitable software, organise your records, check your figures and prepare your submissions. This can be particularly useful if you have both self-employment and rental income or are unsure how the new requirements affect your circumstances.

The most important thing is to prepare in advance, keep your records organised and make sure you understand your responsibilities before your first quarterly deadline arrives.

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