Will Making Tax Digital apply to me in 2028?

Making Tax Digital will apply to you from 6 April 2028 if your self-employment and property income before expenses is over £20,000 in the 2026 to 2027 tax year - and that tax year began on 6 April 2026, so it's being measured right now.

If you let out a single property, or do freelance work alongside a job, this is the step most likely to reach you.

This article is about that 2028 threshold: who it catches, how to tell whether you're near it, and what's different for the people joining last. If you want to know what Making Tax Digital actually involves day to day - the quarterly updates, the software, the penalties - our article on whether you have to use Making Tax Digital for Income Tax now covers that in full.

Is the £20,000 threshold definitely law?

Yes. The Income Tax (Digital Obligations) Regulations 2026 were made on 23 March 2026 and came into force on 1 April 2026. Regulation 27 sets the qualifying amount at £50,000 for 2024-25, £30,000 for 2025-26, and £20,000 for 2026-27 "and any subsequent tax year".

So £20,000 isn't a proposal or a consultation figure. It's the threshold in force, and there's no further step down written into the regulations.

Does the £20,000 mean profit or turnover?

Turnover. HMRC defines qualifying income as "your total income from self-employment and property. This is the amount before expenses (also known as turnover)" At £20,000, that catches a lot of people whose profit is small.

A landlord with one flat bringing in £21,000 a year in rent is in scope, whatever the mortgage interest, the service charge, the letting agent's fee and the boiler that failed in February came to. The profit could be a few hundred pounds. The profit isn't the test.

The same applies when you add sources together. If you take £13,000 in rent and £9,000 from some design work on the side, that's £22,000 of qualifying income and you're in, even though neither on its own would have got you there.

Employment income through PAYE, your share of partnership profits, dividends (including from your own company), the State Pension and private pensions don't count. Someone on a £60,000 salary with £12,000 of rent isn't caught by this. Someone with no salary and £21,000 of rent is.

How can I tell if I'm near the line?

HMRC decides using the Self Assessment return for the 2026 to 2027 tax year, which you'll file by 31 January 2028. So the figure that matters is building up now, one rent payment and one invoice at a time.

Two details change the sum. If you own a property jointly, only your share counts - HMRC's own example is a property bringing in £50,000 split equally between two owners, giving each of them £25,000 of qualifying income. And if you've only been trading for part of the year, the figure is scaled up to a full year: HMRC's example doubles six months of trading.

If your income comes from several places, the combined total can be hard to see until you sit down to do your return. If you'd find it useful to have rent and invoice income pulled automatically into one running total as the year goes on, we're happy to set up that automation for you.

If you're close, HMRC's checking tool now asks about the 2026 to 2027 year. HMRC says it will write to people whose income is above the threshold, but also that "If you did not receive a letter, it is still your responsibility to check". It's best not to wait for the post.

What's different for the people joining in 2028?

Mostly nothing: the same quarterly updates, the same software, the same annual return. But one thing is easy to get wrong.

The group that started in April 2026 has a gentle first year. HMRC says "There are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year." That relief is attached to that tax year, not to anyone's first year in the system, so it will have ended long before the 2028 group starts. From your first quarter, a missed update deadline means a penalty point, which works much like points on a driving licence: one on its own costs nothing, but four means a £200 penalty.

There is a first-year concession you will get, on paying the tax rather than filing. HMRC says that "In your first year of new penalties, you have 30 days from the payment due date" to pay in full or contact HMRC to set up a payment plan. After your first year, that drops to 15 days.

The practical point is that you won't get a free practice run. Missing a deadline in your first quarter counts. If you'd like each quarterly deadline to arrive as a reminder a few weeks ahead, with the records you'll need already gathered, we're happy to set up an automation that does that.

Could I be exempt?

Possibly. Some exemptions are automatic and need no application, including having qualifying income of £20,000 or less, having no National Insurance number before the tax year starts, and being a partnership, a trust filing an SA900 return, or the personal representative of someone who has died. HMRC's exemption guidance lists the rest.

The digital exclusion exemption, for people whose age, health, disability, religious beliefs or location mean they can't reasonably use digital tools, has to be applied for. HMRC won't accept on their own that you previously filed on paper, that you're unfamiliar with accounting software, that you have few records, or that signing up costs time or money. If you think this applies to you, or to a relative whose affairs you help with, it's better to start that conversation early than in the spring of 2028.

How many people will this affect?

HMRC has given two figures. When the threshold drop was announced at Spring Statement 2025, the technical note put the group at 900,000 sole traders and landlords. The tax information and impact note published alongside the regulations a year later says "approximately 970,000". The later figure is the one attached to the legislation, and the gap is a reminder that these are estimates rather than counts.

The same note puts the cost at £380 million of one-off transitional cost and £101 million of continuing cost across that group. Divided out, that's roughly £390 each to get set up and £104 each in continuing cost - our arithmetic, not HMRC's, and averages hide a lot. The note also says this group has "lower reliance on agents and lower uptake of software for filing returns" than people above £30,000, which suggests it's the least prepared group brought in so far.

What should I do now?

Not much this month. But three things are worth doing before you file your 2026-27 return.

Know your turnover, not just your profit. If you've never had a reason to look at your income before expenses, look at it now, because that's the number HMRC will test.

If you're near the line, check. Use HMRC's tool rather than waiting for a letter.

Don't buy software yet. You have until April 2028, and paying for a subscription long before you need it doesn't help.

We're an AI and automation business, so the tax itself is a matter for you, your accountant and HMRC. Where we can help is the routine work around it. If you'd like reminders, record gathering and the copying of figures between your bank, invoicing tool and records handled by automation, you can read about what we set up for small businesses, and we're happy to help.

Sources

• The Income Tax (Digital Obligations) Regulations 2026, including regulation 27 - legislation.gov.uk
• Find out if and when you need to use Making Tax Digital for Income Tax - GOV.UK
• Work out your qualifying income for Making Tax Digital for Income Tax - GOV.UK
• Penalties for Making Tax Digital for Income Tax - GOV.UK
• Find out if you can get an exemption from Making Tax Digital for Income Tax - GOV.UK
• Reduction of the mandation threshold from £30,000 to £20,000 from April 2028 - HMRC tax information and impact note
• Technical note: Modernising the tax system through Making Tax Digital - HM Treasury and HMRC

Checked on 1 October 2026. Tax guidance is amended often and thresholds have moved before; if you're reading this close to 2028, check the current position before acting on it.