Six months after its implementation, Making Tax Digital (MTD) for Income Tax is reportedly leading to significant administrative burdens for landlords and sole traders. Research conducted by Tide indicates that these individuals could spend an average of six full days managing MTD administration during the scheme's initial year.
MTD for Income Tax became mandatory in April 2026 for landlords and sole traders whose qualifying income exceeds £50,000. This threshold is set to decrease to more than £30,000 from April 2027, which is expected to bring approximately 1,077,000 additional landlords and sole traders into the scheme.
The data suggests that nearly half (44%) of qualifying sole traders and landlords anticipate MTD admin will reduce their normal working hours. More than one in three (36%) expect this to impact time they would otherwise spend serving clients. Additionally, 38% expect to complete MTD admin in the evenings, 35% at weekends, and 32% during planned time off or holidays.
The average six days lost to MTD administration is estimated to equate to £1,778 in lost income per business in the first year, totalling £1.5 billion across the UK.