HMRC says around 1.077 million more sole traders and landlords will have to use Making Tax Digital for Income Tax from 6 April 2027, bringing landlords with qualifying income above £30,000 into the next phase of the reporting regime.
The tax authority issued the reminder on 5 October, six months before the threshold drops from £50,000. It says affected taxpayers must keep digital records, use compatible software and submit quarterly income-and-expense updates as well as their final tax return.
Many landlords will need to test their position now because the £30,000 measure is gross income from property and self-employment before expenses or tax allowances. A landlord whose taxable profit sits below the threshold can still fall within MTD if rental receipts and any trading income exceed it.
£30,000 threshold uses gross property income
MTD for Income Tax became mandatory on 6 April 2026 for landlords and sole traders above the £50,000 threshold. HMRC says the next group can sign up early, allowing time to choose software and check that their digital records and MTD registration details are correct before the obligation begins.
Landlords must already be registered for Self Assessment and have submitted a tax return within the past two years to sign up. The quarterly updates are short summaries rather than extra annual returns, but they must be sent through HMRC-recognised software. HMRC’s September move to register overdue MTD taxpayers showed the department has begun using Self Assessment data more actively as the first cohort settles into the system.
The latest announcement also sets a clear timetable for smaller portfolios. This follows Landlord Knowledge’s report on the first MTD quarterly deadline, which recorded 436,000 sole traders and landlords filing their initial update. The new figure is not a count of landlords alone: it is HMRC’s estimate for additional sole traders and landlords, based on 2024-25 Self Assessment returns.
HMRC flags another expansion in 2028
HMRC says the threshold will fall again to £20,000 from April 2028. That makes 2027 more than a one-off compliance date. Landlords currently below £30,000 should still understand how their records are held, particularly if rent rises, an additional property or self-employment income could take gross receipts over the next threshold.
The timing also overlaps with existing reporting duties for the first MTD group, whose second quarterly update is due by 7 November. Those already in the scheme should not treat the October reminder as applying only to future entrants: late reporting and payment rules continue to apply even where a taxpayer is not yet facing a new threshold.
HMRC’s 5 October MTD announcement stresses that agents can sign up clients through GOV.UK. That may help landlords who use an accountant, but it does not remove the need to establish who is responsible for software, records and submitting each quarterly update.
The practical risk is misreading the test
The immediate risk is not an unexpected tax bill. It is assuming that net rental profit is the MTD test, then discovering too late that gross receipts place the landlord in scope. Portfolios with repairs, mortgage interest or other sizeable costs are most likely to see a wide gap between the two figures.
Landlords who keep records in spreadsheets or paper files can use the six-month window to speak to their agent or accountant, identify compatible software and separate property income from personal spending. That is likely to be easier before a quarterly deadline is close.
What this means for landlords
- Check the right number: add gross rental and self-employment income before expenses, rather than relying on profit shown on a tax calculation.
- Prepare before April: choose compatible software and ensure Self Assessment details are current while there is time to correct errors.
- Agree responsibilities: landlords using an accountant should confirm who will maintain records and send every quarterly update.
- Watch the next threshold: the £20,000 expansion in April 2028 could catch smaller portfolios soon after the 2027 intake.
- Bottom line: the new £30,000 threshold turns MTD planning into an immediate records-and-software task for many landlords.
Editor’s view
HMRC has made the calculation landlords need to perform unusually clear: gross receipts, not profit, decide whether the 2027 threshold applies. The wider rollout leaves little room for a last-minute software decision, especially for landlords who also have self-employment income.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 06 October 2026
Sources: HM Revenue and Customs
Related reading: HMRC to sign up overdue landlords to MTD from September
