Change is Coming in April 2027: Making Tax Digital for Income Tax

Are You Ready?

Whilst many taxpayers have already been complying with Making Tax Digital for Income Tax (MTD for IT) from April 2026, a further group of sole traders and landlords are due to be mandated into the scheme from 6 April 2027.

If your qualifying income for the 2025/26 tax year exceeds £30,000, you are expected to fall within the scope of Making Tax Digital for Income Tax from April 2027. Qualifying income is the total gross income you receive from all your sole-trade businesses and property rentals, calculated before deducting any expenses. Income from other sources, such as employment, pensions, dividends or your share of partnership profits, is not included.

What does Making Tax Digital for Income Tax involve?

Under Making Tax Digital for Income Tax, affected taxpayers must:

• Keep digital business and property income and expenditure records
• Use HMRC-compatible software
• Submit quarterly updates to HMRC
• Complete an end-of-year final declaration to confirm taxable income

This represents a significant change from the current Self-Assessment system and may require changes to the way you maintain your records.

Why Early Action Matters

If you meet the qualifying criteria, Making Tax Digital for Income Tax is mandatory. Early preparation will make the transition smoother.

If you are likely to be affected from April 2027, now is a good time to:

• Check whether your 2025/26 qualifying income exceeds £30,000.
• Review how you currently maintain your business or property records.
• Consider whether you need to move to MTD for IT compatible software.

Get In Touch

Although April 2027 may seem some way off, acting now can help you avoid last-minute disruption. If you are unsure whether Making Tax Digital for Income Tax applies to you, or would like help with software and record-keeping requirements, please contact your usual Whitings LLP adviser or your local Whitings LLP office.