The MTD Notebook · Getting ready · 10 August 2026

Preparing for MTD in April 2027: the £30,000 wave, and why it's already decided

The second wave of Making Tax Digital for Income Tax starts on 6 April 2027, for sole traders and landlords whose qualifying income is over £30,000. The part almost nobody realises: whether you are in it was settled by the 2025–26 tax return you have already filed. There is nothing to decide — only to prepare. Here is who is in, how to check in two minutes, what “getting ready” actually means, and the one way this wave is treated more harshly than the first. Every figure is checked against GOV.UK and dated.

1. Who joins in April 2027 — and why it is already fixed

MTD for Income Tax is being switched on in three waves, each set by a lower threshold of qualifying income. The April 2027 wave is the £30,000 one.

GOV.UK is explicit about which year decides it: if your qualifying income was over £30,000 for the 2025 to 2026 tax year, you need to use MTD from 6 April 2027. That 2025–26 return was due by 31 January 2027 at the latest — so by the time April 2027 arrives, the figure that puts you in was filed months earlier and cannot change. This is not a threshold you cross during 2027. It is one you either crossed on a return that is already in, or you did not.

What qualifying income is — and the two things people get wrong

Qualifying income is your total income from self-employment plus property, before expenses — the turnover figure, not the profit. GOV.UK describes it as the amount “before expenses (also known as turnover), based on the tax return you submitted in the previous tax year.” Two consequences trip people up:

• It is turnover, not profit. A landlord with £34,000 of rent and £20,000 of mortgage interest and costs has £14,000 of profit — and is still in the April 2027 wave, because £34,000 of rent is over £30,000.
• Employment and investment income does not count. A salary, a pension, dividends and savings interest are all excluded. Only self-employment and property turnover go into the test. Someone earning £60,000 in a job with a £12,000 side trade is not mandated on that basis.

The threshold is “more than” £30,000. Qualifying income of exactly £30,000 does not cross it. On the boundary between having a legal obligation and not, that one word settles it.

2. How to check where you stand, in two minutes

You do not need to wait for a letter. Pull up your 2025–26 Self Assessment return — the one filed by 31 January 2027 — and add together:

• your self-employment turnover (box for total takings/sales, before expenses), and
• your property income (total rents received, before expenses).

If that total is over £30,000, your start date is 6 April 2027. HMRC also publishes a checker that walks through the same test and tells you when you need to start and whether you might be exempt. To sign up when the time comes you must be registered for Self Assessment and have submitted a return in the last two years — which, if you have a 2025–26 return, you have.

If your total is between £20,000 and £30,000, you are not in the April 2027 wave — you are in the April 2028 one, decided by your 2026–27 return. Either way, working it out now tells you exactly how long you have.

3. What “getting ready” actually means

The requirement is narrower than the marketing around it suggests. From your start date you must do two things: keep digital records of your business income and expenses, and send a quarterly update to HMRC four times a year using compatible software. That is it. There is no extra return, and the quarterly updates carry no payment and no tax calculation.

So “getting ready” is mostly about the records, not the filing. The people who find the first quarter painful are the ones who arrive at the deadline with the figures still in a carrier bag; the people who find it a five-minute job are the ones already recording income and expenses digitally, in something that totals itself. If you do nothing else before April 2027, move your bookkeeping into a spreadsheet or app that keeps a running total — the format the quarterly update needs.

4. You can start early — and there is a reason to

You do not have to wait for 6 April 2027. GOV.UK lets you sign up voluntarily for the current tax year or the next one, to get used to it before it is compulsory. For a £30,000-wave business, volunteering for 2026–27 means running a full year of quarterly updates while the stakes are lowest — you learn the rhythm, find out whether your records are in the right shape, and iron out the software before it matters.

There is one thing to know before you volunteer: while the 2026–27 tax year has no penalties for a missed quarterly update, that easement is tied to the tax year the update is for, not to whether you were forced to join. If you volunteer, HMRC notes that the penalty rules that apply to you can differ from a mandated taxpayer’s — so read the next section before deciding, and check your own position on GOV.UK.

5. The catch: no penalty-free first year for this wave

Everyone joining in April 2026 got a genuine soft landing: GOV.UK states plainly that there are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year. A lot of the advice written for the first wave repeats that reassurance. Here is the part that advice does not say, and it matters specifically to the April 2027 wave:

From 2027–28, each missed quarterly update, tax return or final declaration earns one penalty point; reaching the points threshold triggers a £200 penalty, with a further £200 for each later miss. So while the first wave could feel its way through year one with nothing at stake on the quarterly updates, the second wave is in the live penalty regime from its very first update on 7 August 2027.

That is not a reason to panic — a point is not a fine, the threshold takes several misses to reach, and points can be removed by a period of compliance. It is a reason to have your records working before April 2027 rather than learning on the job with points on the line. It is also the strongest practical argument for volunteering a year early: do your learning in 2026–27, where a slip costs nothing.

6. Your first eighteen months, on one calendar

If your 2025–26 income put you over £30,000, this is the run-up and the first year:

Quarterly updates are cumulative — each one restates the tax year to date rather than reporting a single quarter, so a mistake in one is superseded by the next. They carry no payment. Your liability is still worked out once, at the final declaration, and your payments on account on 31 January and 31 July are unchanged. MTD changes the reporting, not the paying.