PREMIUM Feature
Making Tax Digital (MTD) is rapidly emerging as one of the biggest unseen challenges facing UK sole traders. Sage research has found that only 30% have a clear understanding of MTD for Income Tax, with more than half a million potentially unprepared for the first quarterly filing deadline on 7 August.
The software provider has teamed up with Gary Neville on a new hi vis initiative for UK tradespeople, offering 10,000 free workwear kits alongside access to Sage Sole Trader, its free MTD-compatible accounting software.
Making Tax Digital is moving from a background tax issue into a live compliance deadline for sole traders, including many small construction and trade businesses that already face pressure from workload, materials, labour and day-to-day admin.
According to Sage, only 8% of sole traders are currently using accounting software to manage digital tax records, while 70% do not feel confident about the steps needed to stay compliant. The research also found that only 37% correctly identified the 7 August deadline.
The issue is particularly relevant for sole traders earning more than £50,000, who will be required to keep digital records and submit quarterly updates through approved software as part of the Making Tax Digital for Income Tax rules.
Sage said the campaign is designed to cut through with tradespeople who may be more focused on daily site work, project delivery and summer workload than tax reporting changes. The company’s research found that nearly one in five sole traders were more aware of football transfer deadline day than the upcoming MTD reporting deadline.
Sage is giving away 10,000 hi vis workwear kits including hi vis jackets, polo shirts and pullovers designed for site use, as well as access to Sage Sole Trader software ahead of the deadline.
Gary Neville said: “There’s already enough admin pressure on sole traders trying to run a business day to day. A lot of people still don’t realise these tax changes are coming, so this is about helping tradespeople get ready with the right support and tools before the deadline hits.”
Lisa Ewens, SVP Product, Small Business and Accountants at Sage, said: “Many sole traders are still unaware of how significant this change will be. Making Tax Digital is designed to modernise the tax system, but for many businesses the biggest challenge is simply knowing what they need to do next. We wanted to create a campaign that cuts through, helps sole traders understand what is needed from them and takes them to the places where they can get the support.”
The findings suggest the challenge is not only software adoption, but awareness. For construction sole traders, the risk is that tax compliance becomes another deadline competing with site delivery, payment chasing, procurement and customer work.
Sage said almost two thirds of UK tradespeople surveyed believe Making Tax Digital will make their tax returns more accurate, with digital accounting expected to reduce manual errors. More than a third said they would trust digital accounting platforms such as Sage the most in helping them understand the new rules.
For sole traders in the construction sector, the message is simple: check if the rules apply to you, confirm your deadline, and make sure digital record keeping is in place before quarterly reporting becomes mandatory.
Sole traders can claim free hi vis work gear and access Sage Sole Trader software at www.sage.com/hi-vis.