MTD unawareness opens new client opportunities for accountants

MTD unawareness opens new client opportunities for accountants

New research shows nearly a third of sole traders haven’t even heard of Making Tax Digital, with under a year to prepare

Nearly half of the UK’s sole traders feel unprepared for the rollout of Making Tax Digital (MTD) for Income Tax, according to new research by IRIS Software Group. With the April 2026 deadline approaching, the figures reveal a critical awareness gap — and a clear opportunity for accountants to step up.

The study of 1,000 sole traders found that 45% say they’re unprepared for the incoming digital tax reporting rules, while 31% admit they haven’t heard of MTD at all. Only 23% felt they were “very prepared”.

“Our findings suggest that as many as half a million sole traders would welcome a phone call from their accountants to help advise them on the forthcoming MTD requirements,” said Mark Chambers, Managing Director at IRIS Accountancy. “That’s a huge retention opportunity to deepen practices’ relationships with an important client base.”

IRIS estimates around 1.4 million businesses could fall into the unprepared camp, risking non-compliance unless professional help is offered soon. Under MTD for Income Tax Self-Assessment (ITSA), self-employed individuals and landlords earning over £50,000 must submit digital updates quarterly from April 2026, with thresholds dropping to £30,000 in 2027 and £20,000 in 2028.

Although 29% of respondents said they already work with an accountant, some expressed concern that they hadn’t yet received any advice on MTD. 9% of those with low awareness said their accountant hadn’t brought it up, while 7% were confident they’d be advised in due course.

Meanwhile, expectations for HMRC guidance remain high:

  • 76% of those unaware or only partly aware of MTD said they wished they were more informed.
  • 74% said they would welcome more support and direction from HMRC.

“Many sole traders are waiting on insight and material from HMRC, which may not be coming,” Chambers added. “Time poor sole traders could also use a helping hand to get them up to speed… This points to an opportunity for SME accountancy practices to fill the gap, engage their local business communities on MTD readiness, and to supercharge their digital bookkeeping – opening the door to new clients.”

Generational divide on digital adoption

The research also uncovered a clear age gap in awareness and preparedness. 37% of 25–34-year-olds said they were “very prepared”, compared to just 10% of those aged 45–54. Attitudes followed suit:

  • 64% of 25–34-year-olds said MTD would positively impact how they file taxes,
  • vs. 48% of 35–44s and only 30% of 45–54s.

Younger sole traders were also more likely to use third-party software and less likely to rely on paper-based filing, suggesting that technology adoption plays a key role in compliance confidence.

Despite the low awareness, more than half (56%) of sole traders agreed that MTD would help with budgeting and avoiding tax bill surprises, and a majority viewed the reforms as a net positive for costs.

“As an HMRC-recognised software provider for Making Tax Digital, IRIS is well-positioned to support both sole traders and accountants on their journey to compliance,” Chambers said. “With intuitive tools and expert guidance, we’re here to help users not only meet regulatory requirements but also embrace the wider benefits of digital bookkeeping — from improved accuracy to greater efficiency.”

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