The future of Making Tax Digital: falling thresholds and what's next

Making Tax Digital is not standing still. The direction of travel is clear: over the next few years, more and more self-employed people and landlords will be brought into digital record keeping as the threshold steadily falls. If you are under it today, it is worth understanding where this is heading.

The short answer: MTD for Income Tax already reaches income over £50,000 from April 2026, drops to £30,000 in April 2027 and £20,000 in April 2028, and the government has said it wants to explore bringing in those earning below £20,000 too.

The direction of travel

When MTD for Income Tax was first announced, only higher earners were affected. Since then the plan has been to widen it in steps:

• April 2026: gross self employment and property income over £50,000.
• April 2027: over £30,000.
• April 2028: over £20,000.

Each step pulls in a large new group of sole traders and landlords. By April 2028, anyone with more than £20,000 of gross income from self employment or property is expected to be keeping digital records and filing quarterly.

What about people earning under £20,000?

This is the part a lot of small earners and side-hustlers ask about. The government has said there are around four million taxpayers with income below £20,000, and it wants to explore how to bring the benefits of digital record keeping to them as part of the wider rollout.

Nothing below £20,000 is mandated yet, and no firm date has been set. But the clear signal is that digital, quarterly tax is the future for the self-employed, not the exception. Planning as if it is coming is the safe bet.

Why the threshold keeps falling

The aim behind MTD is fewer errors and a smaller "tax gap", the difference between tax owed and tax collected. HMRC believes keeping records digitally, as you go, reduces mistakes compared with a once-a-year scramble. That logic applies just as much to smaller businesses, which is why the net keeps widening.

What this means for you

• If you are a growing sole trader or landlord, assume MTD will reach you sooner or later, even if you are under the current thresholds.
• Getting into good habits now, keeping digital records and separating business money, means no painful switch later.
• Choosing software early, rather than in a panic before a deadline, gives you time to get comfortable.

How Beri helps

Beri is built for exactly this shift. It keeps the digital records MTD expects and turns plain-English descriptions into proper bookkeeping, so as the thresholds fall, you are already ready, with nothing new to learn.

Want to stay ahead of the change? Join the Beri waitlist for early access and founder pricing.

Related: MTD for Income Tax: who has to comply and when and Making Tax Digital, explained in plain English.

General information, not tax advice. Future plans and thresholds can change. Check the latest on gov.uk or ask a qualified adviser about your situation.