MTD for £30,000 Earners: What Changes in April 2027 for the Self-Employed

The rollout so far

Making Tax Digital for Income Tax is arriving in waves by income:

• April 2026: gross income over £50,000 (already live)
• April 2027: gross income over £30,000 — the wave that catches most full-time tradespeople
• April 2028: gross income over £20,000

How to check if it applies to you

The test is gross income — your total turnover from self-employment plus any property income, before expenses — as reported on your 2025–26 tax return. It is not your profit. A tradesperson turning over £40,000 but netting £22,000 after materials and van costs is still in scope from April 2027, because the £30,000 test looks at the £40,000.

That distinction catches people out. Because it is turnover, most full-time tradespeople clear £30,000 comfortably — so if the April 2026 wave passed you by, April 2027 very likely will not.

What actually changes

• You must keep digital records of income and expenses in compatible software.
• You send HMRC a quarterly update of your totals — four a year.
• A final declaration replaces the old annual return, due by 31 January after the tax year.
• Quarterly deadlines are 7 August, 7 November, 7 February and 7 May, each cumulative from 6 April.

How to get ready — the easy way

The mistake is waiting until spring 2027 and then scrambling. The people who will barely notice the change are the ones already keeping digital records now, out of habit. You do not need to become a bookkeeper — you need a tool that captures the data as you work:

• Income that records itself from the invoices you already send
• Receipts captured with a photo, categorised by AI
• Quarterly figures prepared for you, with deadline reminders

Do that and April 2027 is a non-event. Sleepless Tradesman handles all three, and its automatic quarterly submissions mean the figures are ready when the deadline comes. See the accounting features.

Penalties for Missing MTD Deadlines

HMRC is introducing a new points-based penalty regime alongside MTD. Miss a quarterly submission and you receive a penalty point. Accumulate four points in a rolling 12-month period and a £200 financial penalty is charged. After that, each further missed submission costs another £200.

Points expire after 24 months of full compliance. The separate late-payment penalty system still applies to unpaid tax: 2% of unpaid tax after 15 days, 4% after 30 days, and escalating from there. The simplest protection against both is software that has the deadlines built in and sends reminders before each one.

What "Digital Records" Actually Means

HMRC's requirement for "digital records" sounds bureaucratic but in practice it just means your income and expenses must live in software rather than a paper book or memory. Specifically, for each business transaction you must record:

• The date of the transaction
• The amount (gross of VAT if you're not VAT-registered; net if you are)
• A description or category

You don't need to store digital copies of every receipt — though AI receipt scanning makes this effortless — but the transaction itself must be in the software. Invoices created in Sleepless Tradesman already meet this requirement for income. Expense receipts photographed in the app do too.

Special Cases: CIS, Multiple Trades and Property Income

CIS subcontractors: Your gross income is the gross amount before CIS deductions — not the amount paid to you after the contractor deducts tax. A roofer who invoices £45,000 but receives £36,000 after 20% CIS deductions has gross income of £45,000 for MTD purposes.

Multiple income sources: HMRC combines all self-employment income when testing the threshold. Running two trades (e.g. plumbing and gas engineering) means adding both turnovers together. Property income also counts, so a tradesperson who also rents a property may hit the threshold sooner than expected.

Partnerships: Each partner's share of partnership income counts as their own self-employment income for MTD purposes. A partnership itself does not file MTD returns — each partner does, based on their profit share.

Frequently asked questions