A sole trader with £38,000 of sales and £4,000 of rent in 2025/26 has £42,000 of qualifying income, which is over £30,000, so they must use Making Tax Digital from 6 April 2027.
A sole trader who also rents out a flat, looking at their 2025/26 return
| Self-employed sales before expenses, 2025/26 | £38,000.00 |
| Rent received before expenses, 2025/26 | £4,000.00 |
| Qualifying income | £42,000.00 |
| Threshold for starting on 6 April 2027 | £30,000.00 |
£42,000 is over £30,000, so quarterly updates start with the 2027/28 tax year.
The flat is owned outright by them alone, so all the rent counts. All assumptions and rates
Assumptions and rates
- The flat is owned outright by them alone, so all the rent counts.
- Their 2024/25 qualifying income was not over £50,000, so they were not brought in from April 2026.
- They are not exempt.
- Qualifying income is self-employment and property income before expenses
- Over £50,000 (2024/25) from 6 April 2026; over £30,000 (2025/26) from 6 April 2027; over £20,000 (2026/27) from 6 April 2028
What counts as qualifying income?
Your total income from self-employment and property before expenses, which is your turnover and rent received. Profit does not matter: a sole trader with £38,000 of sales and £30,000 of costs still has £38,000 of qualifying income.
A salary, dividends, pensions and your share of a partnership's profit do not count. For property you own jointly, only your share counts.
Which year decides it?
The tax year two years before the start date. HMRC looks at your 2025/26 return, filed by 31 January 2027, to decide whether you start on 6 April 2027. Your 2026/27 return decides April 2028.
What do I send, and when?
Four quarterly updates from software, then a final declaration by 31 January after the year ends. The updates are cumulative: each covers the tax year from 6 April to the end of the latest period, so you can correct earlier figures as you go.
For 2027/28 the updates are due on 7 August 2027 (to 5 July), 7 November 2027 (to 5 October), 7 February 2028 (to 5 January) and 7 May 2028 (to 5 April). The final declaration is due by 31 January 2029.
If you started in April 2026, your next update, for the period to 5 October 2026, is due on 7 November 2026.
Does it change when I pay tax?
No. Quarterly updates report your figures, and the dates for paying stay the same. The balancing payment and payments on account are still due on 31 January and 31 July.
What if my income is under £20,000?
The announced thresholds stop at £20,000, so below that you carry on with the annual Self Assessment return.
Can I be exempt?
Some people are, for example if you are digitally excluded. HMRC's guidance lists the reasons and how to ask for an exemption.
What this doesn’t cover
- Partnerships, which are not yet in Making Tax Digital for Income Tax.
- Limited companies, which file corporation tax returns.
- Making Tax Digital for VAT.
- Penalties for late quarterly updates.
- Which software to use.
Common questions
Turnover. Qualifying income is self-employment and property income before expenses.
No. Employment income, dividends and pensions are left out.
A short email before each deadline that costs money to miss, and when a new guide goes up.