MTD for Income Tax: the £30,000 cohort joins in April 2027 — how to get clients ready

The first wave of Making Tax Digital for Income Tax has been live since April 2026, covering sole traders and landlords with qualifying income over £50,000. The second wave is bigger — and it arrives on 6 April 2027, when the threshold drops to £30,000.

HMRC has not confirmed a penalty soft landing for this cohort, so assume the points system applies from day one. Here is how to find the affected clients and get them ready — and why the work starts with the January Self Assessment returns.

New to MTD for Income Tax altogether? Start with our complete MTD guide, which covers the thresholds, quarterly deadlines and penalty rules in full.

Who joins in April 2027

The test is based on gross qualifying income — self-employment plus UK property income, before expenses — shown on the client's 2025/26 tax return. That return is due by 31 January 2027, which means:

• Clients won't know for certain whether they're in scope until their 2025/26 return is prepared.
• Firms that prepare those returns in November–January can identify the 2027 cohort two to three months before mandation. Firms that file everything on 31 January leave themselves nine weeks.

Remember the two traps from the first wave: the threshold is gross income, not profit, and self-employment plus rental income are added together. A trades client turning over £35,000 with slim margins is in scope just as surely as a landlord with £31,000 of rent.

What joining means for these clients

• Digital record-keeping in HMRC-recognised software from day one.
• Quarterly updates due 7 August, 7 November, 7 February and 7 May — the first, covering 6 April to 5 July 2027, is due 7 August 2027.
• A Final Declaration by 31 January 2028 replacing the Self Assessment return for 2027/28.
• Sign-up is separate from MTD for VAT — VAT-registered clients must still register for MTD for Income Tax specifically.

One genuine piece of good news for this cohort: their 2026/27 return (due January 2028) is still a normal Self Assessment return. MTD reporting starts with the 2027/28 tax year for them.

A timeline for your practice

1. November 2026 – January 2027: as each 2025/26 return is prepared, flag clients with qualifying income between £30,000 and £50,000. They are your 2027 cohort.
2. February 2027: write to the whole cohort at once. Explain what changes, what software they'll use, and your fees for quarterly reporting. Clients hearing about MTD for the first time in March will not be ready in April.
3. March 2027: sign clients up for MTD for Income Tax and move them onto digital record-keeping. Anyone already keeping digital records for VAT still needs the separate income tax sign-up.
4. April 2027 onwards: start collecting records quarterly. The first update (due 7 August 2027) is the rehearsal — if your collection process works in the summer, it will work all year.

The clients who need the most help

The £30,000–£50,000 band contains a different kind of client from the first wave: smaller sole traders, part-time landlords, people who have never used accounting software and may never have kept records in any organised form. For these clients the software is the easy part — the habit of sending you records four times a year is the hard part.

That is a process problem, not a tax problem, and it is solvable: a client portal where clients photograph or upload documents as they go, with automated reminders before each quarterly deadline, removes the quarterly chase entirely. It is the workflow we built Kontua around, and it scales from one MTD client to five hundred.

And after 2027?

The threshold drops again to £20,000 on 6 April 2028, based on 2026/27 returns. The playbook above simply repeats — the firms that build a reliable quarterly collection process for the 2027 cohort will onboard the 2028 cohort with almost no extra effort.

The bottom line

April 2027 will bring roughly as many clients into MTD as the first wave did, and many of them are less prepared. Identify them from the January returns, contact them in February, and make quarterly document collection someone else's problem — your software's.