Nearly 3 million taxpayers set for Making Tax Digital by 2028
Making Tax Digital (MTD) – HMRC’s ambitious digital transformation – will sweep up 2.9 million self-employed individuals and landlords over the next three years, fundamentally reshaping how Britain’s entrepreneurial class manages their tax obligations.
Phased rollout targets higher earners first
The MTD expansion follows a carefully orchestrated income-based timeline. From April 2026, 864,000 individuals earning over £50,000 will pioneer the transition to quarterly digital reporting and record-keeping.
The middle tier – 1,077,000 taxpayers with income between £30,000 and £50,000 – joins in April 2027, whilst the final wave of 975,000 earning £20,000 to £30,000 enters in April 2028. Together, they represent 42% of all self-employment and property income earners within self-assessment.
Business owners dominate the cohort, with 2,353,000 individuals (81%) deriving income from self-employment alone or combined with rental properties. 563,000 pure landlords will generally transition later, with nearly half entering during the final 2028 phase.
Agent representation reveals digital divide
Professional representation emerges as a crucial factor determining readiness. Around 65% of in-scope taxpayers already work with authorised agents, creating a substantial advantage in software adoption.
The contrast is stark: 78% of higher income taxpayers with agents currently use commercial software for submissions, compared to just 21% of unrepresented individuals. This leave approximately 1,018,000 taxpayers without professional support facing a steep learning curve.
Most concerning for HMRC, 83% of unrepresented taxpayers currently avoid software entirely when filing self-assessments, suggesting significant educational and technical support requirements lie ahead.
Implementation challenges loom
The 217,000 unrepresented individuals entering MTD from April 2026 represent HMRC’s immediate challenge, requiring intensive support on quarterly record-keeping and digital submission processes.
With 9.1 million taxpayers remaining outside MTD requirements including over 4 million self-employed or property income earners, HMRC must balance digitalisation ambitions against universal taxpayer support needs.
HMRC and industry bodies encourage voluntary early adoption, allowing taxpayers to familiarise themselves with digital processes before mandatory compliance arrives.
Need help with your digitalisation?
The team at Carston ETL can guide you through the MTD transition and ensure your business is ready for the changes ahead.
