New research from Sage has revealed that a large number of UK sole traders remain unclear about upcoming Making Tax Digital (MTD) for Income Tax changes, with only 30% saying they clearly understand the new rules.
The findings come ahead of the first major MTD deadline on 7 August, raising concerns that more than half a million sole traders across the UK could be unprepared for the transition to digital tax reporting.
According to the research, just 8% of sole traders are currently using accounting software to manage digital tax records, despite the government’s push towards mandatory digital submissions.
What is Making Tax Digital for Income Tax?
HM Revenue and Customs introduced Making Tax Digital as part of a wider initiative to modernise the UK tax system. Under the new rules, qualifying sole traders earning more than £50,000 annually will be required to keep digital records and submit quarterly tax updates using approved software.
Official guidance on the scheme can be found on the UK Government’s Making Tax Digital page.
However, Sage’s latest research highlights a major awareness gap among self-employed workers and tradespeople.
Key findings from the research include:
- 70% of sole traders do not feel confident about the steps required to remain compliant
- Only 37% correctly identified the 7 August MTD deadline
- 18% admitted they are more aware of football transfer deadline day than the incoming tax changes
Gary Neville backs new Sage initiative for tradespeople
To help raise awareness, Sage has partnered with Gary Neville to launch a nationwide “back-of-shirt” sponsorship initiative aimed at UK tradespeople.
The campaign will offer 10,000 free hi-vis workwear kits alongside free access to Sage Sole Trader, the company’s MTD-compatible accounting software.
Tradespeople can apply for the initiative through the official Sage hi-vis campaign page.
The sponsorship package includes:
- High-visibility jackets
- Polo shirts
- Stretch holster trousers suitable for site work
- Access to free MTD-ready accounting software
The campaign is designed to help sole traders better prepare for digital tax reporting requirements before the August deadline arrives.
Gary Neville says sole traders need better support
Speaking about the campaign, 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.”
The research also revealed that many tradespeople remain optimistic about the long-term benefits of digital tax reporting.
According to Sage:
- 61% believe MTD could make tax returns more accurate
- 35% said they would trust digital accounting platforms like Sage most when learning about the new rules
Sage urges businesses to prepare now
Lisa Ewens, Senior Vice President of Product for Small Business and Accountants at Sage, said the biggest challenge for many businesses is simply understanding what action they need to take.
She explained:
“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.”
Sage hopes the campaign will encourage more sole traders to start using digital tools before compliance becomes mandatory.
You can learn more about Sage Sole Trader software through the official Sage UK website.
Why this matters for UK sole traders
The introduction of Making Tax Digital represents one of the biggest changes to self-assessment tax reporting in recent years. Businesses that fail to prepare early may struggle with compliance requirements, digital record keeping, and quarterly submissions once the rules come into effect.
With awareness levels still low, campaigns like Sage’s partnership with Gary Neville aim to make the transition easier for tradespeople already balancing busy workloads and growing admin responsibilities.
