UK Tax Digital Rollout Reaches 2.9 Million Traders by 2028

The expansion follows a clear timeline tied to gross income. The first cohort, consisting of 864,000 individuals with income exceeding £50,000, entered the system on April 6, 2026. This group will be followed by approximately 1.077 million taxpayers in the £30,000 to £50,000 bracket in April 2027, and a final group of 975,000 earning between £20,000 and £30,000 by April 2028. These figures, derived from HMRC’s 2023-24 business-population data, encompass a broad spectrum of sole traders, including those operating across major ecommerce platforms like Shopify, Amazon, Etsy, and eBay.

Eligibility for the scheme is determined by total qualifying gross income from self-employment and property rather than the specific marketplace used. For online sellers juggling multiple income streams and payment processors, this requires a consolidated view of their finances. Beyond simple submission, the regime mandates the maintenance of digital records and the filing of quarterly updates via compatible software. While HMRC has opted to waive penalty points for late quarterly updates during the 2026-27 tax year, the requirement remains compulsory.

Historical data suggests a varied baseline for compliance. Among the initial £50,000-plus group, 63% utilized commercial software for their 2023-24 Self Assessment returns, though this does not equate to immediate MTD readiness. The administrative burden is significant; HMRC estimates a £196 million annual cost for the population falling above the £30,000 threshold. For many, the transition necessitates not just new software, but a shift in bookkeeping practices to accommodate the shift from annual reporting to a continuous, digital-first tax environment.