Half of sole traders unprepared for looming tax reporting changes, new IRIS Software Group research shows - Seite 2

Others were more relaxed, with nearly a third (32%) believing they should be more aware but plan on researching it in their own time, and 7% trusting their accountants to advise them at the appropriate time.

With less than a year to go, only 23% of sole traders believed they were very prepared for the requirements.

Mark Chambers, Managing Director at IRIS Accountancy, said: "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.

"It's encouraging to see that nearly a quarter feel ready to meet the requirements, but that leaves a significant portion not experiencing the benefits of digitalised tax reporting that compliance will bring."

Generations divided over digital accounting

Younger sole traders were more likely to feel very prepared for the forthcoming requirements and expressed greater optimism about the changes compared to older respondents. This generational divide may reflect broader attitudes toward digitalisation — with MTD representing just the first step in the government's wider push to modernise and digitise tax and accounting processes in the years ahead.

Nearly two in five (37%) of 25–34-year-olds felt they were very prepared for April 2026, compared to 23% of those aged 35-44, and only 10% of 45–54-year-olds. Following the trend, nearly two thirds (64%) of those aged 25-34 felt the changes would have a positive impact on their approach to filing taxes, compared to 48% of those 35-44 and only 30% of respondents aged 45-54.

Younger generations were the most likely to be using third party software for managing their taxes, and the least likely to be using paper-based filing systems, highlighting the link between technology and compliance.

Overall, more than half (56%) agreed that MTD will support their budgeting and help them to avoid surprises when paying their tax bill, with younger sole traders even more likely to agree. Respondents overall were also more likely to agree than disagree that MTD changes would have a positive impact on their costs.

Mark Chambers continued: "It's particularly promising to see younger sole traders already embracing digital tools. That trend signals real momentum for a wider transition to more efficient, tech-enabled ways of working. The next step is making sure everyone, regardless of age or experience, has access to the knowledge and resources they need to move confidently towards compliance.

"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. 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."

For more information, visit IRIS' MTD hub.

*Based on 3.1 million sole traders operating in the UK

**A poll of 1000 UK sole traders aged 18+ completed independently by Censuswide, commissioned by IRIS, between the 9^th April 2025 and 15^th April 2025.

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