Sole traders and landlords across the UK could face a costly summer of stress, as new research from business management platform Tide reveals that more than 200,000 qualifying business owners aren't ready for the Making Tax Digital switch, with the first filing deadline less than 30 days away.
Tide first flagged the issue in February 2026, when it found sole traders faced a £2.18 billion compliance bill, equivalent to £753 per business.
The new research surveyed 500 sole traders and landlords with annual revenues above the £50,000 qualifying threshold for year one of MTD. It finds that many aren't ready for the change or remain unsure what Making Tax Digital means for them, despite the first filing deadline falling on August 7th.
With the deadline just days away, 22% of owners still don't know it's coming. A quarter (25%) haven't yet signed up with HMRC for Making Tax Digital, a requirement for any qualifying business owner or landlord. Of the estimated 864,000 who qualify for MTD in 2026, that leaves 216,000 yet to sign up and submit their first update.
85% don't know how often they'll need to file
The first quarterly filing deadline looks set to bring a summer of tax stress, and the research shows confusion will continue well beyond August. Making Tax Digital requires business owners to file tax information to HMRC five times a year, comprising four quarterly updates and one final annual submission.
Tide's survey finds that 85% of those joining MTD this year don't know this, and 1 in 3 (31%) instead believe they'll need to file eight times or more. Awareness has barely moved since Tide's February research found 83% of sole traders didn't realise they'd need to file five times a year.
Six days of admin, £1.5 billion in lost revenue
The launch of Making Tax Digital lands during busy summer trading periods, at a time when many business owners had hoped for time off. Nearly half (44%) say they'll be forced to focus time during normal working hours on MTD-related admin, while 1 in 3 (32%) feel they'll have to complete it during time off.
In total, sole traders and landlords foresee the new tax admin requiring six full days of their attention over the next 12 months, a time cost Tide estimates at £1.5 billion in lost revenue across qualifying businesses in the first year of Making Tax Digital.
To help business owners understand the change, Tide is running an awareness campaign across several UK cities, offering free ice cream alongside guidance on switching to MTD.
From Monday 20th July, Tide staff will hand out flavours including 'Self Assess-mint', 'VATnilla' and 'PAYE-stachio', plus a 'Declare your Hundreds and Thousands' topping, while advising on Tide's HMRC-recognised filing tool, which is free for current account holders within the Tide app.
Sign-up rates are lowest in the South East (46% still unregistered), the North West (29%) and London (26%). Tide's ice cream van will visit:
- Manchester, New Cathedral Street, Monday 20th and Tuesday 21st July
- London, Victoria, Thursday 23rd July
- London, Broadgate, Friday 24th July
- Brighton, New Road, Saturday 25th July
"No one wants to be thinking about tax over summer, but we can't escape the fact that Making Tax Digital is here and the first deadline is just days away," said George Schmidt, chief executive for UK and Europe at Tide.
He continued, "The first wave of business owners need to ensure they are signed up with HMRC and file on time, to avoid penalties that accumulate with each missed deadline.
"It is a worry that so many still aren't ready for the switch, but we hope that over the coming days we can raise awareness, spread some joy and importantly, help people to make their first submission, so they can get on with enjoying their summer."
