Do sole traders over £30,000 need Making Tax Digital from April 2027?

Sole traders whose turnover, plus any rent, was over £30,000 on their 2025 to 2026 tax return start Making Tax Digital for Income Tax on 6 April 2027. Your first quarterly update is then due by 7 August 2027.

The threshold comes from HMRC's eligibility page, last updated 26 March 2026. This article explains HMRC's published rules. It is general information. We do not give tax advice.

Does HMRC use turnover or profit?

Turnover. HMRC's qualifying income page defines qualifying income as "the amount before expenses (also known as turnover)" from self-employment and property.

For trades with high costs, that matters. A builder, a mobile mechanic or a café owner can have modest profit and still have turnover above £30,000. Materials, fuel, stock and van costs do not reduce qualifying income.

What counts towards the £30,000?

Source: HMRC, updated 11 September 2026. Add every self-employed trade and any rent together. Two small businesses can cross the line together when neither does alone.

Which return decides it?

Your 2025 to 2026 Self Assessment return, which is due online by 31 January 2027. If it shows qualifying income over £30,000, you start on 6 April 2027. If it shows £30,000 or less, HMRC checks the next return: over £20,000 on your 2026 to 2027 return brings you in from 6 April 2028.

HMRC says it will write to you. If no letter arrives, HMRC says it is still your responsibility to check.

What are my first deadlines?

From HMRC's quarterly updates page, updated 16 October 2026, for a sole trader starting on 6 April 2027:

Each update covers the year so far and is a summary of your digital records. HMRC says you do not need to make accounting or tax adjustments before sending one. If your accounting period runs from 1 April to 31 March, HMRC says you should use calendar update periods.

What happens if I miss one?

From the 2027 to 2028 tax year, each missed quarterly update or tax return deadline adds one penalty point. HMRC's penalties page says that at 4 points you get a £200 penalty, and another £200 for each later miss. Points below 4 drop off 24 months after the missed deadline.

The easement that applies in 2026 to 2027, with no penalties for missed quarterly updates, covers that tax year only. Sole traders who start in April 2027 earn points from their first update.

Do I need special software?

Yes, you need software that works with Making Tax Digital. HMRC's software page says free products exist "for those with simple tax affairs", with some limits. If you keep records in a spreadsheet, bridging software can connect to it and send your updates. HMRC does not recommend any product.

Can I be exempt?

Some people are exempt automatically, for example if you have no National Insurance number. Others can apply as digitally excluded, if age, a health condition or disability, religious beliefs, or a lack of internet access where you live and work makes software unreasonable. HMRC's exemption page sets out the rules.

Next step

Answer six questions in the MTD check to see your likely start date and your first four deadlines. If you want help, one accountancy firm that files MTD updates can call you.