Buy-to-let landlords are further ahead than many sole traders in their preparations for Making Tax Digital (MTD), according to new research carried out by Wolters Kluwer Tax & Accounting.
The study reveals there is a clear readiness gap, with four in five landlords (80%) saying they feel prepared for the changes, compared to 64% of sole traders, while another third of sole traders (36%) admit they are not ready.
From April 2026, taxpayers with business or property income above £50,000 will be required to keep digital records and submit quarterly updates to HM Revenue & Customs using approved software. The threshold will then reduce to £30,000 from April 2027, before falling again to £20,000 from April 2028, bringing more landlords and self-employed workers into its net.
Bas Kniphorst, EVP and Managing Director Europe at Wolters Kluwer Tax & Accounting, says: “Making Tax Digital represents a fundamental shift in how individuals manage and report their tax affairs, and this research shows that while landlords are largely on track, many sole traders still feel uncertainty.”
Potential benefits to MTD
Although compliance was the primary driver of preparations, respondents were also asked about any potential benefits the changes might bring. Across all the groups, easier reporting to HMRC was the most commonly cited advantage at 46% of those surveyed. Landlords were more likely than sole traders to see the wider strategic upsides, including improved financial forecasting and data analysis (44% versus 14%) and greater bookkeeping efficiency (40% compared with 32%).
These findings reveal the marked divide between landlords who view MTD as a chance to modernise their financial processes and sole traders who mainly see it as just another administrative burden.
Around two-thirds of landlords (66%) said they were familiar with MTD requirements, while almost half of sole traders said they knew very little about what it involves. Landlords also reported higher confidence in understanding the steps they needed to take to comply.
28% attended webinars or sought guidance
More than a quarter of landlords (28%) said they had attended webinars or had sought guidance, compared with just 8% of sole traders. One in five sole traders said they had taken no steps to prepare at all, even though the changes are only weeks away.
Despite stronger readiness among landlords for Making Tax Digital, the research suggests there is still uncertainty over its implementation. And those concerns were mostly centred around choosing the right software (48%) and its cost (44%), while training sessions or webinars (50%), ongoing adviser support (38%) and clearer official guidance (34%) were also flagged as useful next steps.
Overall, the study revealed how heavily all those affected are relying on professional guidance during the transition process. Across all groups, 77% said they were likely to seek support from an accountant or adviser, rising to 86% among landlords.
