Making Tax Digital for Income Tax began in April 2026 for anyone with qualifying income over £50,000. The next line down is £30,000, it takes effect on 6 April 2027, and it is measured on the return covering the tax year that ended in April 2026 — the one sitting in your accountant's queue right now. It is a turnover test, it adds together income you think of as separate, and it catches a great many hygienists, therapists, part-time associates and dentists who own a rental property.
Article · 8 September 2026
The first wave of Making Tax Digital for Income Tax has been live since 6 April 2026. Sole traders and landlords whose qualifying income for 2024/25 came to more than £50,000 are keeping digital records and sending quarterly updates, the first of which was due on 7 August 2026. HMRC has moved on to signing up automatically anyone in that group who has not signed themselves up. For those already inside it, the mechanics are set out in our guide to Making Tax Digital for dentists.
The group that should be paying attention this month is the next one. From 6 April 2027, the threshold drops to £30,000, and the figure HMRC will use to decide who is in comes from the 2025/26 tax return — the return due by 31 January 2027. In other words, the number that decides your obligations for the whole of 2027/28 is being finalised in the next few months, and in most practices nobody has looked at it yet.
HMRC's wording is unambiguous: qualifying income is your total income from self-employment and property, and it is "the amount before expenses (also known as turnover)". Profit does not come into it. Neither do lab fees, indemnity, your GDC retention fee, the mileage between sites, or the accountancy fee.
What counts towards the £30,000:
What does not count:
All four are illustrative, and all four are the shapes we see most often.
Ask an associate what they earn and you will get the figure that reaches their bank account after the practice has taken its share and the lab bills have been settled. That is not turnover, and turnover is what HMRC reads.
Where your agreement gives you a percentage of fees and the practice then deducts lab costs and sundries from your schedule, the amount credited to you before those deductions is your turnover and the deductions are expenses. On a schedule showing £2,900 credited and £310 of lab work taken off, the turnover is £2,900 a month, not £2,590 — a difference of £3,720 across a year, which is more than enough to move somebody from one side of £30,000 to the other. The same applies to the card-processing charges on private work and to any materials the practice recharges to you.
The practical consequence is that the threshold question cannot be answered from memory or from a bank statement. It is answered from the turnover box on the return, which is why the point to settle it is while the 2025/26 figures are being prepared.
From the start of the tax year in which you are mandated, three things change.
HMRC is not charging penalty points for missed quarterly updates in the 2026/27 tax year. That easement is attached to the tax year, not to your personal first year, so it is spent by the time the £30,000 group starts. Anyone mandated from 6 April 2027 is in the penalty regime from their first update, on 7 August 2027.
Late submission works on points: one point per missed deadline, and at four points a £200 penalty. Late payment is separate and sharper. For 2026/27, nothing is charged for the first 15 days; pay between 16 and 30 days late and the charge is 3% of the tax outstanding at day 15; go past 30 days and there is a further 3% of the amount outstanding at day 30, plus 10% a year accruing daily from day 31. Those two 3% charges rise to 4% each for 2027/28. Late payment interest runs alongside from the first day.
The threshold itself is not the difficult part. What catches people is that the decision is made by a figure they never look at, on a return filed long before the obligation bites, and communicated by a letter that arrives after both. If you are self-employed in dentistry and anywhere near £30,000 of turnover — or you have a rental property alongside clinical income — ask us to work the number out while the 2025/26 figures are still on the desk. Hygienists and therapists in particular should read it alongside our page for hygienists and therapists, because the gross-income test lands hardest where the profit margins are smallest.
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Yes, if your turnover is over £30,000. HMRC's test uses qualifying income, which it defines as total income from self-employment and property before expenses. Profit is irrelevant to the test even though it is what you are taxed on. A hygienist invoicing £34,200 and spending £9,100 on GDC fees, indemnity, instruments and travel has qualifying income of £34,200 and profit of £25,100, and it is the first figure that decides the obligation. This hits clinicians with high costs hardest — associates paying lab bills, therapists working across several sites — because the expenses that make the profit modest do nothing to keep you outside the regime.
No. HMRC excludes partnership profit shares from qualifying income, because partnerships are not yet inside Making Tax Digital at all and no start date has been announced for them. A partner whose only income is a profit share, however large, is outside the regime. The trap is that partners rarely have only that. A personal associate agreement at another practice, medico-legal work, teaching, facial aesthetics billed in your own name, or a rental property are each self-employment or property income in your own right, and those are added together against the threshold. Your salaried sessions and dividends stay out.
Company income is outside Making Tax Digital for Income Tax entirely — the company files corporation tax returns, and the salary and dividends you take are excluded from qualifying income. So an incorporated associate with no other income is not caught. The exception is property held personally. If you own the surgery premises in your own name and rent them to the practice, or you have a buy-to-let, that rent is property income measured before mortgage interest and costs. Gross rents over £30,000 in 2025/26 put you inside the regime from April 2027 as a landlord, even though your clinical income is nowhere near it.
You still start on 6 April 2027. The test looks at the return for the measuring year and nothing else, so a one-off spike — a locum-heavy year, a property sold part-way through, extra sessions covering a colleague's maternity leave — pulls you in even though the following year is quieter. Once you are in, you stay in unless HMRC agrees to remove you, and that conversation happens after several years of lower income rather than on a forecast. If your 2025/26 figure is inflated by something genuinely unrepeatable, tell your accountant now so the position is documented before the return is filed.
There is a digital exclusion exemption, and it is a real route rather than a formality. It covers people for whom using compatible software is not reasonably practicable because of age, disability, location — a surgery with no usable broadband, for instance — or religious observance. Applications for the April 2027 group are open now. You apply by phone or in writing to Self Assessment general enquiries, heading the letter as a Making Tax Digital for Income Tax digitally excluded application, and giving your National Insurance number, how you file at present and the grounds. HMRC aims to respond within 28 calendar days, and you carry on with normal Self Assessment records meanwhile.
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