More than half of SMEs not prepared for first MTD deadline

A new survey shows that just over half of small businesses are not ready for the first Making Tax Digital for Income Tax submission deadline.

What Is Making Tax Digital?

Making Tax Digital (MTD) means that, eventually, all businesses, sole traders and landlords will need to keep digital records using MTD compatible, submitting their figures every quarter.

The most recent change, MTD for Income Tax Self-Assessment (ITSA), came into force on the 6th of April 2026 and only affects sole traders and landlords once they reach certain thresholds.

You will be affected from:

• 6th April 2026, if you have an annual business or property income of more than £50,000
• April 2027, if you have an annual business or property income of more than £30,000
• April 2028, if you have an annual business or property income of more than £20,000

First Deadline Less Than a Month Away

The first quarterly update is due on the 7^th of August; however, research from Lloyds Banking Group found that 55% (around 475,000) of small businesses are yet to complete preparations for this first phase.

The survey also found that among those already preparing for the first submission, 40% said the move to digital tax management had helped them become more organised, while 28% said it had reduced last-minute tax stress.

Ramki Sankaranarayan, Head of Business Banking at Lloyds, commented, “Making Tax Digital represents one of the biggest administrative changes many sole traders will have experienced for years.

“Our research suggests that while businesses recognise the benefits of digital record keeping, many are still working through what they need to do before the first submission deadline.”

For more information on MTD, take a look at our What Do I Need to Know about Making Tax Digital? page.

For more information, please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.