Compliance
Digital Mandation Threshold Drops: What This Means for Sole Traders and Landlords
From April 2028, more UK sole traders and landlords will need digital record-keeping under Making Tax Digital. Here’s how to prepare to avoid penalties.
By NomadicTax Research Team • 5-8 min read • May 4, 2026
## What’s Changing?
The UK government has announced that starting **April 2028**, the threshold for mandatory participation in **Making Tax Digital for Income Tax Self Assessment (MTD-ITSA)** will be **lowered from £30,000 to £20,000** of qualifying income. ([gov.uk](https://www.gov.uk/government/publications/making-tax-digital-for-income-tax-self-assessment-reducing-the-mandation-threshold-from-30000-to-20000-from-april-2028?utm_source=openai))
This applies to individuals who are self-employed or landlords. Those whose qualifying income lies between **£20,000-£30,000** will now be required to keep digital records and submit quarterly updates. Those above £30,000 are already or will be under earlier deadlines. ([gov.uk](https://www.gov.uk/government/publications/making-tax-digital-for-income-tax-self-assessment-reducing-the-mandation-threshold-from-30000-to-20000-from-april-2028?utm_source=openai))
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## Why the Change Matters
* **Greater inclusion** — more people will be using digital tools, potentially reducing errors and increasing HMRC compliance. ([gov.uk](https://www.gov.uk/government/publications/making-tax-digital-for-income-tax-self-assessment-reducing-the-mandation-threshold-from-30000-to-20000-from-april-2028?utm_source=openai))
* **More frequent reporting** — quarterly updates mean income and expenses will need to be tracked more regularly.
* **Digital format required** — paper records won’t suffice; software compliant with HMRC’s rules is necessary.
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## Who’s Affected and When
| Group | Income | Effective Date | Key Obligations |
|-------|--------|----------------|------------------|
| Self-employed / landlords with income **£30,000+** | £30,000+ | April 2026 | Already have or will have MTD-ITSA obligations. |
| Those with **£20,000-£30,000** qualifying income | £20,000-£30,000 | April 2028 | Must adopt digital record-keeping and quarterly submissions. |
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## Steps to Get Ready
1. **Assess your income now** — look at your business or property income
2. **Choose compliant software** — ensure your bookkeeping software supports MTD for Income Tax and quarterly updates
3. **Revise bookkeeping processes** — move to digital methods if not yet done
4. **Check tax calendar and reminders** — note new filing dates, get habitual about monthly/quarterly reviews
5. **Seek help if needed** — HMRC guidance, accountants or tax agents can help avoid costly missteps
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## Practical Example
*Jane is a landlord whose rental income is £24,000 a year. Currently she files annually using paper accounts, under the old threshold. Under the new rule (from April 2028), she must keep digital records (or use qualifying software), submit income and expense updates every quarter, and be prepared for more scrutiny from HMRC.*
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## Key Takeaways
- If your qualifying income is between **£20,000-£30,000**, **don’t wait until 2028**—start adopting digital practices now.
- Use software that automatically formats your records to meet HMRC’s requirements.
- Keep good financial records always—not just for compliance, but because they help you make better business decisions.
**Take-away action**: review your income for the current tax year, pick tax compliant software, test quarterly reporting early, and ensure you're not caught by surprise when the April 2028 deadline arrives.