HMRC's estimates by group
| Group | Start | Estimate | Source |
|---|---|---|---|
| Qualifying income over £50,000 | April 2026 | 780,000 | Tax information and impact note, updated 2 September 2025 |
| £30,000 to £50,000 | April 2027 | 970,000 | Same note |
| £20,000 to £30,000 | April 2028 | 970,000 | Policy paper, 24 March 2026 |
Where each figure comes from
HMRC's tax information and impact note for sole traders and landlords, updated 2 September 2025, says it expects around 780,000 people with business or property income over £50,000 to join from April 2026, with a further 970,000 from April 2027.
HMRC's policy paper on reducing the threshold to £20,000, published 24 March 2026, says the change brings approximately 970,000 additional individuals into scope from 6 April 2028. The Spring Statement 2025 technical note of 26 March 2025 gave 900,000 for the same group. The later paper is the one laid with the regulations.
Other published counts
- 5 February 2026
- HMRC's news release was headed 864,000 sole traders and landlords facing the rules from April 2026, and its text said more than 860,000.
- 12 August 2026
- More than 436,000 had sent their first quarterly update and over 570,000 had signed up (HMRC news release).
- June 2023
- The NAO reported HMRC planned to move the records of 740,000 business taxpayers with incomes over £50,000 in 2026 to 2027 and 870,000 between £30,000 and £50,000 in 2027 to 2028.
- 2021 design
- The 2021 impact note put the £10,000 threshold at approximately 4.2 million businesses, individuals and civil society organisations.
HMRC's compliance cost estimates
| Group | Transitional cost | Continuing cost each year |
|---|---|---|
| Over £30,000 in total (impact note) | £561 million, £320 a business on average | £196 million net, £110 a business on average |
| £30,000 to £50,000 | £350 a business on average | £108 million net |
| Over £50,000 | £285 a business on average | £88 million net |
| £20,000 to £30,000 (policy paper) | £380 million | £101 million net |
About the cost figures
The first three rows come from the impact note updated 2 September 2025 and the last from the policy paper of 24 March 2026. For the earlier £10,000 design, the 2021 impact note gave a transitional cost of £1,383 million, £330 a business, and £152 million a year continuing.
The NAO's June 2023 report found HMRC estimated £1.6 billion of additional tax over five years from taxpayers with incomes between £10,000 and £30,000, against costs to them of £1.2 billion, £460 each on average.
Questions
Why do the figures differ between documents?
They were published at different dates and for different purposes. The impact notes estimate who joins each phase, the news releases count people HMRC was writing to or who had signed up, and the NAO figures are HMRC's records migration plans in 2023.
How does HMRC find the people it counts?
HMRC reviews each Self Assessment return and checks qualifying income every tax year, then writes to tell the person they need to start by the beginning of the following tax year (HMRC: find out if and when).
What do the people in the £20,000 group have to do?
HMRC's policy paper of 24 March 2026 says they must keep digital records of income and expenditure, send a quarterly summary of business and property income and expenses, and send their end of year return, all through compatible software.
What do the three estimates add up to?
780,000, 970,000 and 970,000 make 2,720,000 people across the three phases, using the 2025 impact note and the 2026 policy paper. HMRC has not published a single combined figure in the documents cited.
How does this compare with VAT?
HMRC said over 1.5 million businesses had signed up to Making Tax Digital for VAT between April 2019 and September 2021 (HMRC news release, 23 September 2021), and that the April 2022 extension reached 1.1 million businesses under the VAT threshold (extension of Making Tax Digital for VAT).
How many took part in testing?
HMRC said more than 20,000 quarterly updates had been sent through the voluntary testing programme by 5 February 2026 (HMRC news release).
How do I know whether a client is counted?
Work out their qualifying income from the return HMRC checks. See the readiness plan and the guide for agents.
In Accountin
In Accountin, sole traders and landlords set up for Making Tax Digital are listed with their businesses and quarters, so a practice can see which clients are in each group.
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