Seven in ten (71%) sole traders in the East Midlands may be unaware of major changes to how they report their income tax, according to new research by IRIS Software Group.
With new Making Tax Digital (MTD) requirements becoming mandatory from April 2026, many sole traders in the region could be unprepared. MTD for Income Tax Self-Assessment (ITSA) will require those earning over £50,000 to maintain digital records and submit quarterly updates using compatible software. This threshold will drop to £30,000 in 2027 and to £20,000 in 2028.
The study revealed that a quarter (26%) of sole traders in the region had never heard of MTD, and 16% of those who had heard of it were unaware of what the April 2026 changes entail.
Many sole traders in the region admitted they wished they were more informed. The majority raised concerns about a lack of communication from HMRC, while others expected to hear about the changes from their accountants.
Only a quarter (24%) of respondents in the region said they felt “very prepared” for the forthcoming requirements. The findings are part of a study of 1,000 sole traders across the UK from IRIS, with 102 panelled in the East Midlands.
Mark Chambers, managing director at IRIS Accountancy, said: “These findings highlight an important moment of opportunity for sole traders in the East Midlands. With MTD on the horizon, there’s a chance to modernise financial processes, unlock efficiencies, and gain clearer visibility of income and expenses.
“It’s encouraging that some already feel prepared, but many more are yet to realise the benefits that digital tax reporting will bring.
“This also presents an opportunity for accountants. The findings point to hundreds of sole traders across the region waiting for a phone call from their accountants on how they can be better prepared. Accountants also have a key role to play in educating their local business community, which can open the door to new business.”
