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London, United Kingdom, October 16, 2025: Although four in five accountants (79%) identify Making Tax Digital (MTD) for income tax self-assessment as their biggest compliance challenge, only 3% have fully prepared their clients for the mandatory changes, according to a new survey from IRIS Software Group, one of the UK’s leading accounting technology providers*.

With just six months to go before the April 2026 deadline, the findings reveal a troubling disconnect between concerns and action. More than a quarter of accountants (29%) admit they have taken no steps to prepare their clients for MTD, although they see it as a much bigger challenge than Companies House reforms (12%) or anti-money laundering requirements (6%).

This gap represents an important consulting opportunity for accountants. These results follow previous IRIS research which revealed that three quarters (76%) of sole traders wanted to be more aware of the impact MTD would have on their business**. One in three (31%) sole traders have never heard of BAT, while almost half (45%) – or around 1.4 million businesses*** – are at risk of non-compliance.

Even among individual traders who are familiar with MTD, significant concerns remain. Almost two thirds (65%) of sole traders believe quarterly updates will be a significant time burden, and three quarters (74%) want more support from HMRC to help them comply.

The study also found that preparedness varies significantly by age, with sole traders aged 25 to 34 almost twice as likely to feel prepared as those aged 45 to 54.

From April 2026, self-employed people, landlords and small businesses with income above £50,000 will be required to keep digital financial records and submit quarterly tax returns using HMRC-recognized software such as IRIS Elements. The threshold will extend to those earning more than £30,000 from 2027.

Eva Mrazikova, Senior Director at IRIS Accountancy, said: “It’s a brewing storm. MTD represents the biggest revolution in the way sole traders and their accountants report their businesses, but confusion still reigns. Many people don’t fully understand what “digital” means in this context or what compliance actually requires.

“The accountants who get ahead will be the ones who make MTD tangible for their clients now – by demonstrating that first download, showing the result and turning uncertainty into habit. Technology has a huge role to play here, not only for compliance, but also to free up time for the strategic conversations that clients increasingly expect. Solutions like IRIS Elements or IRIS Outsourcing enable businesses to manage the quarterly reports more accurately and efficiently, so accountants can focus on building confidence. advisors rather than just form fillers.

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*Survey of 476 participants on the IRIS webinarMTD, compliance and next steps September 9, 2025

**Survey of 1,000 UK employees conducted by Censuswide, on behalf of IRIS Software Group, between May 29 and June 2, 2025.

***Based on 3.1 million sole traders operating in the UK

About IRIS Software Group 

IRIS Software Group is a global provider of mission-critical software and one of the UK’s largest privately owned software companies. IRIS provides software solutions and services to finance, HR and payroll teams, educational institutions and accounting firms that simplify processes and allow professionals to focus on the work they love. By simplifying, automating and providing insight into critical daily tasks for organizations of all shapes and sizes, IRIS ensures its customers can look to the future with certainty and confidence.

IRIS is the largest third-party online filer to the UK government. Ninety-three of the UK’s 100 largest accountancy firms use IRIS software. One in six employees in the UK are paid through IRIS payroll offerings, and globally, six million employees receive their payslips through IRIS software each month. More than 850,000 employees in the UK are managed by IRIS HR solutions. More than 12,000 UK schools and academies use IRIS, and four million parents and carers use IRIS apps to connect with their child’s school; 300 million messages are sent between schools and parents each year, and over £15 million in transactional payments are processed each month. IRIS is a Great Place to Work® certified and recognized as one of the Times 50 Best Employers for Gender Equality in 2023. IRIS is also recognized as a Best Workplace for Wellbeing, a Best Workplace in Technology, and a Best Workplace for Women.

To see how IRIS helps organizations succeed first time, every time, visit www.iris.co.uk or follow IRIS Software Group on LinkedIn, Twitter and Instagram.