{
  "title": "Making Tax Digital for Income Tax: how many people it affects and what it costs",
  "description": "The population HMRC expects each mandation wave to bring in (~780,000 from April 2026, ~970,000 from April 2027, ~970,000 from April 2028 — ~2.72 million in total), the average and aggregate compliance cost to business, and the tax gap it is meant to close. Assembled from HMRC’s two MTD Tax Information and Impact Notes because HMRC never states the combined total.",
  "capturedOn": "16 August 2026",
  "method": "Every figure is read from one of HMRC’s two Tax Information and Impact Notes: the extension TIIN (the £50,000 and £30,000 waves) and the reduction TIIN (the £20,000 wave). The only figure HMRC does not itself publish is the cumulative total, which is the sum of its three wave estimates (780,000 + 970,000 + 970,000); it is flagged as derived. No cost or population figure is inferred.",
  "sources": {
    "extension": "https://www.gov.uk/government/publications/extension-of-making-tax-digital-for-income-tax-self-assessment-to-sole-traders-and-landlords/making-tax-digital-for-income-tax-self-assessment-for-sole-traders-and-landlords",
    "extensionPublished": "22 February 2024, updated 2 September 2025",
    "reduction": "https://www.gov.uk/government/publications/making-tax-digital-for-income-tax-self-assessment-reducing-the-mandation-threshold-from-30000-to-20000-from-april-2028/reduction-of-the-mandation-threshold-from-30000-to-20000-from-april-2028",
    "reductionPublished": "24 March 2026"
  },
  "headline": {
    "cumulativeInScope": "2.72 million",
    "cumulativeInScopeExact": 2720000,
    "cumulativeIsDerived": true,
    "averageTransitionalCostGBP": 320,
    "averageAnnualCostGBP": 110,
    "saBusinessTaxGapPercent": 18.5,
    "saBusinessTaxGapGBP": "£5 billion",
    "hmrcOperationalCost": "£0.5 billion",
    "hmrcOperationalCostBy": "the end of March 2028"
  },
  "waves": [
    {
      "wave": "First wave",
      "startsFrom": "6 April 2026",
      "qualifyingIncomeOver": "£50,000",
      "basedOnSelfAssessmentReturn": "2024 to 2025",
      "peopleJoining": 780000,
      "peopleJoiningLabel": "around 780,000",
      "cumulativeInScope": 780000,
      "cumulativeInScopeIsDerived": true,
      "source": "extension"
    },
    {
      "wave": "Second wave",
      "startsFrom": "6 April 2027",
      "qualifyingIncomeOver": "£30,000",
      "basedOnSelfAssessmentReturn": "2025 to 2026",
      "peopleJoining": 970000,
      "peopleJoiningLabel": "a further 970,000",
      "cumulativeInScope": 1750000,
      "cumulativeInScopeIsDerived": true,
      "source": "extension"
    },
    {
      "wave": "Third wave",
      "startsFrom": "6 April 2028",
      "qualifyingIncomeOver": "£20,000",
      "basedOnSelfAssessmentReturn": "2026 to 2027",
      "peopleJoining": 970000,
      "peopleJoiningLabel": "around 970,000 more",
      "cumulativeInScope": 2720000,
      "cumulativeInScopeIsDerived": true,
      "source": "reduction"
    }
  ],
  "costPerBusiness": [
    {
      "cohort": "Over £50,000 (first wave)",
      "averageTransitionalCostGBP": 285,
      "averageAnnualCostGBP": 115,
      "source": "extension"
    },
    {
      "cohort": "£30,000 to £50,000 (second wave)",
      "averageTransitionalCostGBP": 350,
      "averageAnnualCostGBP": 110,
      "source": "extension"
    },
    {
      "cohort": "Average across everyone over £30,000",
      "averageTransitionalCostGBP": 320,
      "averageAnnualCostGBP": 110,
      "source": "extension"
    }
  ],
  "aggregateCostToBusiness": [
    {
      "group": "Everyone over £30,000 (first two waves)",
      "transitionalCost": "£561 million",
      "netContinuingCostIncrease": "£196 million",
      "source": "extension"
    },
    {
      "group": "The £20,000 to £30,000 wave (third wave)",
      "transitionalCost": "£380 million",
      "netContinuingCostIncrease": "£101 million",
      "source": "reduction"
    }
  ],
  "reductionExchequerYield": [
    {
      "taxYear": "2028 to 2029",
      "yield": "+£35 million"
    },
    {
      "taxYear": "2029 to 2030",
      "yield": "+£130 million"
    },
    {
      "taxYear": "2030 to 2031",
      "yield": "+£155 million"
    }
  ],
  "caveats": [
    "The cumulative total of ~2.72 million is not an HMRC-published figure. It is the sum of HMRC's three separate wave estimates (780,000 + 970,000 + 970,000), which appear in two different TIINs. The waves are additive — each brings a new band of income into scope — so the sum is the standing population once the £20,000 threshold takes effect, not a double count.",
    "The two ~970,000 figures are a coincidence, not a repeat: one is the £30,000-£50,000 band (extension TIIN), the other the £20,000-£30,000 band (reduction TIIN). Both are HMRC's own separate estimates.",
    "HMRC publishes a per-business average cost only for the over-£30,000 population. It gives no per-business average for the £20,000 wave — only the £380 million / £101 million aggregates.",
    "Costs are HMRC estimates using its Standard Cost Model, not observed outcomes. A business already keeping digital records or on MTD for VAT may incur far less; a paper-based one, more.",
    "These are estimates published before mandation. HMRC will revise them; the linked TIINs are the live figures if this dataset has aged."
  ],
  "licence": "CC BY 4.0",
  "attribution": "Fableworks HQ — https://fableworkshq.com/mtd-impact/"
}