From April 2026, if turnover is above £50,000 from self employment and property income combined, taxpayers will need to use MTD-compatible software to keep digital records and send HMRC quarterly updates and also a self assessment tax return at year end.

Lower earners will be pulled into the MTD regime from April 2027 when the threshold drops to £30,000 and subsequently this will be reduced even further in April 2028 to £20,000.

When everyone is dragged into MTD under current plans an estimated two million taxpayers will be in the system, with mandatory quarterly reporting via commercial software. The first phase will see over 860,000 taxpayers in the system.