Stansted, United Kingdom, September 21st, 2026, FinanceWire
Your Ecommerce Accountant has released an analysis of HM Revenue & Customs data finding that approximately 2.9 million UK sole traders and landlords will fall within Making Tax Digital (MTD) for Income Tax by April 2028.
The rollout is already underway, with the first mandatory group entering the system in April 2026. Further groups will enter during 2027 and 2028 as the qualifying-income threshold falls, bringing more sole traders and landlords into digital tax reporting.
HMRC Data Shows MTD Population Will Expand
HM Revenue & Customs data identifies three income groups scheduled to enter MTD as the qualifying-income threshold falls. The first group entered the system in April 2026, followed by additional income bands in 2027 and 2028.
Together, these income bands represent approximately 2.9 million sole traders and landlords. The staged rollout will progressively extend MTD to smaller businesses whose qualifying income reaches the relevant threshold.
Digital Reporting Changes the Tax Process
Your Ecommerce Accountant’s analysis highlights that MTD involves more than submitting an annual tax return online. Mandatory users must maintain digital records and provide quarterly updates through compatible software, followed by the relevant end-of-year reporting process.
The requirement creates a different reporting cycle from conventional Self Assessment. For businesses in the first mandatory group, the first universal quarterly update marked a shift toward reporting financial information during the tax year rather than waiting for annual filing.
For ecommerce sellers, this can be particularly relevant when transactions are spread across multiple marketplaces, storefronts and payment processors. Your Ecommerce Accountant notes that digital sales records alone do not necessarily mean an accounting process is fully aligned with MTD requirements.
Ecommerce Sellers Face a Wider Reporting Change
Your Ecommerce Accountant’s analysis finds that MTD eligibility is not calculated separately for each marketplace. Qualifying income from applicable self-employment and property sources is considered together, meaning sellers using several platforms need to assess their relevant income sources collectively.
Online businesses may therefore need to review how marketplace statements, payment records, expenses and other financial information are collected and reconciled before information is used for MTD reporting.
HMRC implementation data also shows that 350,000 sole traders and landlords had signed up for MTD for Income Tax by July 2026. The figure indicates that implementation is underway, although sign-up numbers should not be treated as a direct measure of readiness or compliance.
The 2.9 million estimate covers sole traders and landlords nationally. HMRC’s business-population figures do not identify how many operate ecommerce businesses, so the figure should not be presented as an ecommerce-specific population estimate.
Methodology: Based on HMRC’s published 2023-24 Income Tax Self Assessment business-population data, Your Ecommerce Accountant analysed the groups scheduled to enter MTD between 2026 and 2028.
When will more sole traders become subject to MTD?
Your Ecommerce Accountant’s analysis shows that the rollout will continue in stages as the qualifying-income threshold falls, bringing additional sole traders and landlords into digital reporting.
How MTD affects ecommerce businesses using multiple platforms
Your Ecommerce Accountant explains that MTD eligibility is based on qualifying income from applicable self-employment and property sources rather than individual marketplaces. Sellers using Shopify, Amazon, Etsy or eBay therefore need to consider their relevant income sources together.
What do businesses need to do under MTD
Your Ecommerce Accountant notes that mandatory users must maintain digital records and provide quarterly updates through compatible software, followed by the relevant end-of-year reporting process. Quarterly updates are not the same as filing four annual tax returns.
About Your Ecommerce Accountant
Your Ecommerce Accountant is a UK accountancy firm specialising in ecommerce sellers, influencers and content creators, with services including VAT, marketplace reconciliation and international sales support.