Making Tax Digital for income over £20,000:
starts 6 April 2028

The third and, for now, last step of Making Tax Digital for Income Tax comes on 6 April 2028. From that date the service applies to sole traders and landlords whose qualifying income was more than £20,000 for the 2026 to 2027 tax year. Unlike the first two steps, the £20,000 threshold is not tied to a single year: the regulations set it for 2026 to 2027 and every tax year after, which makes it the level that Making Tax Digital settles at.

The year that decides who joins in 2028 is the one running now. Income you earn between 6 April 2026 and 5 April 2027 goes on a return due by 31 January 2028, and that return is the one HMRC tests. This page explains the test, what to expect, and what you can do early.

“The qualifying amount for a tax year means (a) £50,000 for the tax year 2024-25; (b) £30,000 for the tax year 2025-26; (c) £20,000 for the tax year 2026-27 and any subsequent tax year.”

How the test works

The rule is the same at every step. Add together your turnover from self-employment and from property, before expenses, as shown on your tax return for the tested year. If the total is more than the threshold, you must use Making Tax Digital from the 6 April after that return is due.

The last row is why £20,000 matters beyond 2028. Someone whose turnover crosses £20,000 for the first time in 2029 to 2030 joins on 6 April 2031. The test keeps running every year.

What counts towards £20,000

Qualifying income is turnover: your self-employment and property income before expenses. GOV.UK's example adds £25,000 of rent and £27,000 of self-employment income to reach £52,000; the same addition applies at the lower threshold. A landlord with one flat let at £1,200 a month has property turnover of £14,400. Add a side business turning over £7,000 and the total is £21,400, which is in.

Employment income, your share of a partnership's profit, dividends, the State Pension and private pensions do not count. Joint property owners count their share. HMRC's October 2026 guidance says turnover is gross income before any tax allowances or expenses are deducted, so the £1,000 trading and property allowances do not reduce it.

The rule is more than £20,000. Exactly £20,000 is outside it, because the regulations exempt anyone whose qualifying income is not more than the qualifying amount.

The threshold at each step of Making Tax Digital for Income Tax

• From 6 April 2026 (2024-25 return)£50,000
• From 6 April 2027 (2025-26 return)£30,000
• From 6 April 2028 (2026-27 return)£20,000

Who this group is

The people who join in April 2028 are, broadly, smaller sole traders and landlords: part-time trades, one or two let properties, and people with a mix of a job and a side business whose business turnover is above £20,000. Because employment income does not count, someone with a salary of £40,000 and a weekend trade turning over £15,000 is not in. Someone whose only income is a trade turning over £22,000 is.

HMRC says it reviews each Self Assessment return and writes to people whose qualifying income is above the threshold, confirming that they need to start by the following tax year. It has not said when those letters go out, and GOV.UK is clear that if you do not get one it is still your responsibility to check.

Your 2026 to 2027 return is the test

For this group, the tested return is the first one filed after Making Tax Digital began. Two consequences follow.

Your records this year decide it. Turnover for 2026 to 2027 is the figure. If you keep your books well this year, you will know by April 2027 whether you are likely to be in, long before the return is due.

The return is due by 31 January 2028. If you are already using Making Tax Digital (because you joined in 2026), your 2026 to 2027 return goes through your software. If you are not, it is an ordinary Self Assessment return. The page on the 31 January 2028 deadline covers the first group's return.

Joining early

You do not have to wait. People below the threshold can volunteer. GOV.UK's guidance for volunteers says that while you are volunteering you will not get penalties for missing quarterly update deadlines; penalty points apply to late tax returns, with a threshold of 2 points rather than 4. A year of volunteering means that by April 2028 the software, the records and the habit are already in place, and the first mandatory update is just another update.

The first year for the £20,000 group

These follow the rule set in the regulations, the same in every tax year. The no-points easement HMRC gave for late quarterly updates covers 2026 to 2027 only, and GOV.UK describes no easement for later groups, so plan on penalty points applying from 7 August 2028: one point per missed deadline and £200 at 4 points.

For landlords

The £20,000 threshold brings in many single-property landlords. Rent counts in full before expenses such as mortgage interest, letting agent fees and repairs, so a landlord whose profit is small can still be in. Joint owners each count their share: a £30,000 rental income shared equally is £15,000 each, below the line unless you have other self-employment or property income. The rental income calculator works out the tax on a let, and the guide to Making Tax Digital for landlords covers property records.

For sole traders and gig workers

Side businesses and platform work are the other large part of this group. Delivery and ride-hailing turnover is often far above profit once fuel and vehicle costs are counted, so check the earnings on your statements, not what you kept. If you have more than one trade, add them together. The MTD requirement checker works out where you stand.

Worked examples at £20,000

Each example uses the 2026 to 2027 return, the one tested for the April 2028 group.

The dog walker at exactly £20,000 is out, because the test is more than the threshold. The couple are each tested on their own share. The driver is in on turnover, not profit.

If your income falls after you join

Joining is not necessarily permanent. GOV.UK says that once you start using the service, if your qualifying income drops below the relevant threshold for three tax years in a row, you can choose to opt out. A single quiet year does not take you out; three in a row lets you choose to leave. If you stop trading or letting altogether, the guidance on changes in your circumstances explains what to do.

Why the tested year is unusual for this group

For the first two groups, the tested year ended before Making Tax Digital began. For this group it does not: 2026 to 2027 is the first year of the service. A landlord or sole trader who is already in the £50,000 group sends quarterly updates for it, while someone below the line keeps records the old way, and both file a return for it by 31 January 2028. The figure that matters for the April 2028 decision is the same in both cases, the year's turnover, so good records this year settle the question early, whichever way they are kept.

Partnerships and everyone else

Making Tax Digital for Income Tax currently covers sole traders and landlords. GOV.UK says that for partnerships, HMRC will set out the timeline at a later date, and your share of a partnership's profit does not count towards your own qualifying income in the meantime. If you are a partner who also has a sole trade or lets property, only that other income is tested.

Some people can be exempt. GOV.UK describes being digitally excluded as it not being reasonable for you to use compatible software, for example because your age, health condition or disability stops you using a computer, tablet or smartphone, or because you cannot get internet access where you live or work. You apply by contacting HMRC, which considers each application case by case and, for people who would start in April 2028, asks for applications from summer 2027 onwards. Having filed on paper before, or being unfamiliar with software, is not enough on its own. Being below the threshold is not an exemption: it simply means the rules do not apply to you yet, and the test runs again on next year's return.

What to do now

1. Keep 2026 to 2027 records carefully. They are the test.
2. Check your likely turnover in spring 2027 with the requirement checker or mtd-check.
3. Look at software that covers your income types in the HMRC software directory, and consider volunteering early.

Every date is on the deadlines hub. The April 2027 page covers the group before this one, and the 7 August 2027 page explains how penalty points work. The glossary explains Making Tax Digital, MTD for Income Tax and turnover.