With major changes to the way self-employed individuals and landlords report their income just around the corner, new research has revealed a worrying trend: nearly half of UK sole traders feel unprepared for Making Tax Digital (MTD) for Income Tax.
According to a recent study conducted by IRIS Software, almost one in three sole traders have never even heard of MTD — despite it becoming mandatory from April 2026 for sole traders, landlords and other individuals earning over £50,000 annually from self-employment or property.
The threshold will then reduce to £30,000 in 2027, with further reductions potentially being introduced in later phases.
What is MTD for Income Tax?
Making Tax Digital for Income Tax means that sole traders, landlords, and partnerships earning above the income threshold will need to:
- Keep digital records of income and expenses.
- Submit quarterly updates to HMRC using MTD-compatible software.
- File a final declaration annually (resulting in five submissions each year).
This shift is designed to modernise the UK tax system, but many are still unaware of what’s required — or how soon it comes into effect. Non-compliance could lead to penalties under HMRC’s new points-based system.
A Timely Wake-Up Call
Mark Chambers, Managing Director at IRIS Accountancy, commented:
“These findings highlight an important moment of opportunity for the UK’s sole traders. With MTD just around the corner, there’s a real chance for businesses to modernise their financial processes, unlock efficiencies, and gain better visibility of their income and expenses.”
At NiS Accountants, we fully agree. MTD isn’t just about compliance — it’s an opportunity to take control of your finances, eliminate manual errors, and gain clearer insights into your property or business income.
We’re Here to Help — Landlords, Self-Employed & Small Business Owners
Whether you manage a portfolio of rental properties, run a small business, or operate as a sole trader, our team can guide you through the MTD transition smoothly. We provide:
- Personalised advice on the best MTD-compliant accounting software.
- Full setup and support with digital record-keeping and submissions.
- End-to-end handling of your quarterly updates and annual declarations.
- Clarity on how MTD affects joint property ownership or multiple income streams.
Don’t Wait Until 2026 — Act Now
We understand the challenges landlords and sole traders face in staying ahead of regulatory changes. Let us help you get prepared, avoid penalties, and keep your income reporting stress-free.
Book your free consultation today and take the first step towards MTD compliance and financial clarity.
