Making Tax Digital (MTD) for Income Tax is fast approaching, but awareness and readiness remain worryingly low among sole traders and accountants alike.
From April 2026, sole traders earning over £50,000 will be required to submit quarterly updates to HMRC under MTD. Yet, a recent IRIS Software survey found that 31% of affected sole traders were unaware of the change, and 45% of those who had heard about it admitted they weren’t prepared.
Three-quarters (74%) said they wanted clearer, more proactive communication from HMRC to help them understand the changes and what to do. Among those unaware of MTD, one in 10 were surprised their accountant hadn’t informed them, and just 7% said they trusted their accountant to guide them through the process.
There are around three million sole traders in the UK, meaning up to 1.4 million may be unprepared with less than a year to go. Younger business owners are more optimistic: 37% of 25-34-year-olds said they felt ready, compared to 23% of 35-44-year-olds and 10% of those aged 45-54.
Accountants themselves aren’t all ready, either. A survey at this week’s Accountex event found that one in three accountants felt unprepared for the MTD rollout, with 8% saying they were “very unprepared” and another 8% unsure.
Despite progress in digital adoption, 11% are still using the HMRC portal, which will soon be phased out. It is no wonder that 80% of accountants named MTD their biggest challenge of the year.
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