MTD Thresholds Are Dropping Fast: The £30K and £20K Deadlines Coming Next
Think MTD doesn't affect you because you earn under £50,000? The threshold drops to £30,000 in April 2027 and £20,000 in April 2028. Here's why you should prepare now.
25 April 2026 · 4 min read
It's not just a £50,000 thing
The first wave of Making Tax Digital hit on 6 April 2026. That covers sole traders and landlords with gross income over £50,000. About 864,000 people.
But the thresholds are dropping, and they're dropping fast.
| Threshold | Start date | Estimated people affected |
|---|---|---|
| Over £50,000 | 6 April 2026 (live now) | ~864,000 |
| Over £30,000 | 6 April 2027 | ~1.7 million cumulative |
| Over £20,000 | 6 April 2028 | ~2.9 million cumulative |
If you're earning between £30,000 and £50,000, you've got less than a year. If you're between £20,000 and £50,000, less than two years.
Gross income catches people out
The threshold is based on gross qualifying income. Turnover, not profit.
This matters because a lot of people underestimate their gross income. If you're a freelancer billing £35,000 a year, you might think of yourself as earning £25,000 after expenses. But for MTD purposes, your qualifying income is £35,000. You're in the April 2027 wave.
And remember: self-employment income and property income get combined. A part-time landlord earning £15,000 rent who also does freelance work billing £20,000 has qualifying income of £35,000.
Why waiting until the last minute is risky
The first wave had months of lead time and warnings. Even so, 94% of businesses weren't ready according to one survey. The second and third waves will have less attention and fewer reminders because the novelty will have worn off.
The £30,000 threshold in April 2027 will bring in nearly a million additional people. That's a million people who all need to:
- Choose and set up software
- Register with HMRC for MTD
- Start keeping digital records
- Learn how quarterly filing works
If they all leave it until March 2027, it'll be chaos. Software support teams will be swamped. Accountants will be booked solid. HMRC helplines will be jammed.
What to do if you're in the next wave
Even though MTD doesn't mandate you yet, there's nothing stopping you from getting ready now.
1. Start keeping digital records today. Even a basic spreadsheet. Date, amount, category for every transaction. When MTD kicks in for you, you'll already have the habit.
2. Look at software options. You don't have to commit yet, but browse what's available. Some tools offer free plans. Others have trial periods. Get a feel for what works.
3. Check your gross income. Not your profit. Your gross. If you're anywhere near £30,000 combined self-employment and property income, assume you're in from April 2027.
4. Consider signing up voluntarily. You can opt in to MTD before it's mandatory. Over 100,000 people have already. It gives you a chance to learn the system at your own pace. Read more in our guide to voluntary MTD sign-up.
What about below £20,000?
HMRC hasn't committed to any threshold below £20,000. But the direction of travel is clear: MTD is expanding. It started with VAT-registered businesses. Then income over £50,000. Now it's heading to £20,000.
If you're self-employed or a landlord, there's a decent chance MTD will affect you at some point. The only question is when.
Get ahead of it
Digital record-keeping is useful regardless of MTD. Knowing your financial position quarterly is useful regardless of HMRC. And not scrambling at the last minute is always better than the alternative. The people who handle this best will be the ones who started before they had to.
Want to know exactly what's involved? Start with our guide to what MTD is and the 2026/27 deadlines.