A new poll has revealed that 94 per cent of UK businesses are not ready for HMRC's Making Tax Digital (MTD) initiative, which begins on April 6, 2026. The survey, conducted by accountancy firm Azets, found that over 63 per cent of respondents are completely unprepared, while 31 per cent have only started preparing. Fewer than six per cent reported being ready for the changes.
MTD will require landlords, sole traders, and the self-employed with gross income above £50,000 per year to submit quarterly updates throughout the year, followed by a final declaration, replacing the current annual self-assessment. The threshold will lower to £30,000 in April 2027 and £20,000 in April 2028, affecting an estimated 864,000 individuals initially, rising to 2.9 million within three years.
Fraser Campbell, UK head of Accounts and Business Advisory Services at Azets, described the findings as alarming, noting that MTD represents the most significant tax system overhaul since self-assessment was introduced 29 years ago. He urged businesses to put plans in place to ensure a smooth transition, highlighting the need for digital record-keeping and MTD-compatible software.
The poll also identified key concerns: over 37 per cent of respondents cited understanding what needs to be reported, 25 per cent were unsure about compliance requirements, and more than 21 per cent were worried about choosing the right software. Campbell emphasised that while the changes bring challenges, they also offer advantages such as near real-time insights into business finances.
