Making Tax Digital for online sellers: the £30,000 line from April 2027

1. The short answer

Take the turnover from your 2025/26 Self Assessment return, which covers 6 April 2025 to 5 April 2026. Add any gross UK property income. If the total is more than £30,000, you must use Making Tax Digital for Income Tax from 6 April 2027.

It's a look-back test. It isn't about what you're selling this year, and it isn't a rolling 12 months. HMRC reviews the 2025/26 return you file by 31 January 2027 and uses the numbers on it.

The line keeps dropping. If you're under £30,000 for 2025/26, the year you're trading in now is tested against £20,000. If you were over £50,000 in 2024/25, you should already have started, and you can still sign up.

Source: GOV.UK: Find out if and when you need to use Making Tax Digital for Income Tax

2. What counts towards the £30,000

HMRC calls it qualifying income: your income from self-employment and property, before expenses. For an online seller, that's the turnover figure on the self-employment pages of your return. Turnover means:

• what customers paid you for your sales, after refunds
• across every platform added together: Amazon, eBay, Etsy, Vinted, TikTok Shop and your own Shopify or WooCommerce site
• before marketplace and selling fees, payment processing, ads, postage you paid for, the stock you bought and any other costs

Fees are expenses. They reduce your profit, not your turnover.

Then add any gross UK rental income, before expenses. If you own a property jointly, count your share.

Doesn't count: wages from a job, pensions, dividends (including from your own company) and your share of partnership profits.

Source: GOV.UK: Work out your qualifying income for Making Tax Digital for Income Tax

3. Payouts aren't sales

This is the mistake most sellers make. Platforms take their fees before they pay you, so what lands in your bank is less than your turnover. If you add up your payouts, you'll undercount, sometimes by enough to miss the line.

Sam looks at the bank, sees £26,000 and thinks they're under the line. But the turnover is £33,000, which is over £30,000, so Sam starts Making Tax Digital on 6 April 2027. Even if Sam's profit after buying stock is only £6,000, that doesn't change anything: the test is turnover, not profit.

What to use instead: start from each platform's sales or orders report, not its payouts or deposits report, and take off refunds.

4. Who it doesn't apply to

• Limited companies. A company pays Corporation Tax and files its own return. Making Tax Digital for Income Tax doesn't cover it, and dividends you take from it don't count towards your line.
• Partnerships. They're due to join later. HMRC hasn't set a date yet.
• Anyone not over the line. If your 2025/26 qualifying income was £30,000 or less, you don't have to start in April 2027. Check 2026/27 against £20,000.
• Exemptions. Some people can be exempt, for example if they're digitally excluded. You apply to HMRC for that. If you're exempt, you still file a normal Self Assessment return. See GOV.UK: Apply for an exemption.

5. What actually changes

• Digital records. You keep your income and expenses in software that works with Making Tax Digital, or in a spreadsheet connected to HMRC through bridging software.
• A short update every quarter. You send HMRC the totals for each income and expense category. These are summaries, not tax returns. Each one runs from the start of the tax year, so you can fix earlier mistakes in a later update.
• Your tax return stays. You still file a return by 31 January after the tax year ends, and your payment dates don't change.

Your first year runs from 6 April 2027 to 5 April 2028:

If your books run to 31 March, you can choose calendar quarters (1 April to 30 June, and so on) instead. The due dates are the same.

Penalties: each late update earns a penalty point, and 4 points means a £200 penalty. HMRC isn't giving points for late quarterly updates in 2026/27, but GOV.UK doesn't say that extends to 2027/28. Plan on points applying from your first quarter.

Source: GOV.UK: Send quarterly updates

6. How HMRC finds out

From your return. HMRC reviews your 2025/26 return and writes to you if you're over the line. If no letter arrives, it's still up to you to check.

From the platforms. Since 2024, marketplaces such as Amazon, eBay, Etsy and Vinted send HMRC what each seller earned over the calendar year, along with the fees, commission or taxes they took. They do this by 31 January the following year and must give you a copy. They don't report you if you made fewer than 30 sales and received less than €2,000 (about £1,700).

Those figures won't match your turnover exactly, and that's normal:

• platforms report by calendar year, while your return runs from 6 April to 5 April
• refunds and timing can fall either side of the year end
• sales on your own website usually aren't reported by anyone

What matters is that you can explain the difference from your records. Keep each platform's copy with your records. A report doesn't mean you owe tax. It means HMRC can compare.

Source: GOV.UK: Selling goods or services on a digital platform

7. Getting ready before April 2027

1. Work out your 2025/26 turnover properly, using sales reports with refunds taken off, not payouts. Do it before you file.
2. File your 2025/26 return by 31 January 2027. It's the figure HMRC uses to decide.
3. Choose compatible software. If you sell on more than one platform, check it can bring in each platform's sales, fees and refunds, not just bank deposits. GOV.UK's software finder lists the options.
4. Sign up. HMRC writes to people it identifies, but it won't sign you up. You can volunteer now if you're registered for Self Assessment and have filed a return in the last 2 years. You'll need your business name, address and type of trade, and your Self Assessment sign-in details.
5. Keep digital records from 6 April 2027 and diary the first update for 7 August 2027.

Source: GOV.UK: Sign up your business for Making Tax Digital for Income Tax

8. When to get help

Plenty of sellers can do this themselves with good software. It's worth talking to an accountant if:

• you sell on several platforms and your figures don't reconcile easily
• you sell to customers in the EU
• you're also close to the £90,000 VAT threshold. That's a separate test based on any 12 months in a row, and it often comes up at the same time as Making Tax Digital. Our VAT check works out exactly where you stand.
• you're weighing up a limited company
• there's a year you haven't reported yet

To find a qualified accountant, try ICAEW's directory.