The April 2027 MTD phase uses qualifying self-employment and property income over £30,000 for 2025/26. That means the relevant gross income before expenses, not salary or take-home profit. Check exemptions and current HMRC guidance before signing up.
Turnover, not profit
Qualifying income is total income from self-employment and property before expenses (turnover), taken from the Self Assessment return for the look-back year. A sole trader with £34,000 sales and £12,000 profit is still over £30,000 for threshold purposes. Adding PAYE salary or pension income into the total is usually the wrong test. Those sources generally do not count toward MTD qualifying income.
HMRC’s own example style: £25,000 property income + £27,000 self-employment income = £52,000 qualifying income. The same logic applies at the £30,000 line; only the threshold and the look-back year change.
How the phases sit together
- Over £50,000 for 2024 to 2025 → from 6 April 2026
- Over £30,000 for 2025 to 2026 → from 6 April 2027
- Over £20,000 for 2026 to 2027 → from 6 April 2028
If you are already in the £50,000 wave, you do not “wait for 2027.” If you are under £50,000 but heading over £30,000 on the 2025 to 2026 return, April 2027 is your planning horizon.
Preparation checklist before April 2027
- Estimate 2025 to 2026 qualifying income early (gross self-employment + property totals, not net profit).
- Confirm with GOV.UK / HMRC’s checker and use TaxSimba’s MTD checker as a practical prompt.
- Decide DIY software vs an agent before the rush; authorisation and software choice take time.
- Practise cleaner digital habits now (monthly bank exports, labelled expenses, rental statements filed as you go). See digital records.
- Know the quarterly rhythm you will inherit from April 2027: summaries every three months, then a software-based tax return. Overview: quarterly updates.
Who this is not aimed at
People already mandated from April 2026 should follow current-year guides (including deadline and catch-up pieces), not treat 2027 as their start date. Partnership MTD timing is separate. GOV.UK says that timeline will be set later.
If you confirm you are in the April 2027 cohort and want accountant-led support rather than DIY-only software, browse the Making Tax Digital service and MTD information pages. We do not invent thresholds or promise to keep you under £30,000. Thresholds and dates follow current GOV.UK guidance and can be updated by HMRC, so re-check before you rely on any summary.
Use the return that drives April 2027
Illustrative preparation example.
Prepare a 2025/26 schedule containing the relevant trade and property income before expenses, with salary kept separate. Keep it beside the April 2027 eligibility check. A later fall in income needs its own analysis rather than replacing the lookback figures.
Check: Does your preparation use the correct assessment year and income definition?
| Check | Practical action |
|---|---|
| Are the figures from 2025/26? | Use the correct look-back year for the April 2027 wave. |
| Are they gross qualifying sources? | Combine relevant trading and property income before expenses, using your share of joint property. |
| Were you already required to join in 2026? | Check the earlier wave first; the later threshold does not postpone an existing obligation. |
Is exactly £30,000 over the threshold?
The published start rule uses more than £30,000. Confirm the underlying figures rather than rounding a near-threshold total.
Should I wait until the first update is due to prepare?
Prepare records, software access and responsibilities before your start date. The first submission deadline is later, but digital record duties start with the relevant year.
Download a checklist for this guide
- Locate the 2025/26 trading and property figures.
- Record joint-property ownership shares.
- Exclude salary, pensions and dividends from this threshold test.
- Confirm any earlier MTD obligation or exemption.
- Set a pre-April software and record handover date.