Almost Half of Self-Employed Brits Don’t Understand Making Tax Digital Requirements

With the Making Tax Digital (MTD) for Income Tax deadline looming for many self-employed Brits, new data shows a shocking lack of awareness around what it means.

New research among those in self-employment found that almost half (42%) don’t understand what is required of them for Making Tax Digital, while over a third (37%) don’t understand the threshold.

MTD becomes mandatory on 6 April 2026 for self-employed individuals and landlords with incomes over £50,000, requiring digital record-keeping and quarterly updates. Deadlines for quarterly submissions are 7 August, 7 November, 7 February, and 7 May. The threshold drops to £30,000 in April 2027, and to £20,000 in April 2028.

A core requirement for MTD is having HMRC-compliant accounting or ‘bridging software’ to report quarterly income and expense summaries under the new rules. However, over a third (35%) of self-employed Brits don’t have this software and don’t have any plans to get it.

Mike Parkes, technical director at Coconut, record-keeping software approved for Making Tax Digital, which commissioned the research, said:

“With quarterly reporting becoming the norm and each Making Tax Digital deadline coming round quicker than you think, now’s the time to get your business set up properly. At its core, MTD is HMRC’s push to move tax reporting fully online. If you’re still juggling spreadsheets, paper receipts and invoices, this is the moment to change that. MTD requires digital income and expense records, a clear audit trail and software that links directly to HMRC.

“MTD isn’t going anywhere, but that doesn’t mean it has to take over your life. With the right setup, clear processes and a bit of forward planning, quarterly reporting becomes just another small task, not a looming threat.”

To find out how much you understand Making Tax Digital, take Coconut’s MTD Quiz here:  https://www.getcoconut.com/making-tax-digital-quiz