HMRC has published revised estimates of the number of taxpayers it expects will need to comply with MTD for income tax. This is based on income tax self assessment (ITSA) tax returns for 2023/24 received by HMRC up to 31 March 2025. The numbers are broken down by taxpayer characteristics, including agent representation, and are subject to rounding differences.  

2023/24 was a transitional year in the move from basis periods to the tax year basis. This could have increased trade income reported by some taxpayers for 2023/24. The actual number of taxpayers required to comply with MTD for income tax will depend on the information for the relevant tax year.  

MTD for income tax 

Taxpayers within scope of MTD for income tax will be required to use software to maintain their accounting records and to submit quarterly updates and an end-of-year tax return to HMRC. Only taxpayers with total gross income from self-employment and property in excess of £20,000 must comply with MTD for income tax. The start date is: 

• April 2026, where total gross income is more than £50,000 in 2024/25;
• April 2027, where total gross income is more than £30,000 in 2025/26; and
• April 2028, where total gross income is more than £20,000 in 2026/27. 

Taxpayers outside the scope of MTD for income tax can volunteer to use it.  

Visit ICAEW’s MTD hub to learn more. 

Number of taxpayers 

Of the 7,020,000 taxpayers with income from self-employment or property that were within ITSA for 2023/24, HMRC expects that 2,916,000 (42%) will need to comply with MTD for income tax, of which: 

• 864,000 (30%) will need to comply from April 2026;
• 1,077,000 (37%) from April 2027; and 
• 975,000 (33%) will be brought in from April 2028. 

The figures replace HMRC’s previous estimate of 2,700,000 taxpayers.  

Source of income 

2,353,000 (81%) of the taxpayers expected to be within MTD for income tax are self-employed, including 313,000 who also receive income from property. It is interesting that, of the 563,000 in-scope taxpayers who are landlords and do not have self-employment income, 47% (263,000) will join in April 2028. This suggests that landlords will come within MTD for income tax at a slower pace than the self-employed.   

Agent representation and use of software 

Although many in-scope taxpayers are represented by an agent (1,900,000; 65%), a significant number (1,018,000; 35%) are not. In addition, the majority of unrepresented in-scope taxpayers do not use commercial software to file their tax return (840,000; 83%). Of those that do use software to file a return, it is unclear how many use software to keep their records.  

These figures illustrate the challenges faced by HMRC in making taxpayers aware of the changes and supporting them through the process of using software to keep records and prepare and file returns. This is particularly pressing for the 217,000 unrepresented taxpayers who will need to comply with MTD for income tax from April 2026, now just over seven months away. 

The figures also highlight the challenges ahead for agents. Of those taxpayers who are in scope of MTD for income tax and have an agent, 527,000 (28%) did not submit their 2023/24 ITSA tax return using software.  

Other ITSA taxpayers 

In February 2025, HMRC reported that 12,026,540 tax returns were submitted for 2023/24. This means that approximately 9,110,540 taxpayers (76%) will not be required to use MTD for income tax, of which 4,103,000 have self-employment and/or property income. It is important that the needs of those taxpayers are not overlooked given the focus on MTD for income tax.