Jessica O'ConnorHundreds of thousands of self-employed tradespeople and builders are set to take on additional administrative requirements under the Government’s Making Tax Digital (MTD) reforms, adding to existing financial pressures, according to research from Tradesman Saver.
The changes will require many sole traders to maintain digital records and submit quarterly tax updates, marking a significant shift in how finances are managed across the sector.
The research found many may be unprepared for the transition.
Around 61% of tradespeople currently manage their accounts themselves, while just 21% said they use an accountant or bookkeeper.
A further 17% said they rely on a partner or spouse to handle their finances.
The reforms come at a time when tradespeople are already facing rising costs.
The data revealed that fuel and transport (45%), household inflation (39%) and energy bills (34%) were among the biggest financial pressures.
Cashflow was also a concern, with one in five (20%) reporting issues caused by late or missed payments.
Additional cost pressures included tools and equipment (29%) and income tax (26%), compounding the financial strain on self-employed workers.
Dean Laming, managing director of Tradesman Saver, said: “Making Tax Digital comes at a time when many tradespeople are already stretched, facing rising costs and ongoing cashflow challenges, and fitting admin into evenings and weekends.
“There are around 700,000 self-employed workers across construction.
“Our data shows that for many, the shift won’t just be a process change, it will mean adding another layer of financial responsibility, increasing the pressure on them in the short-term.
“However, those who adopt the right digital tools early are likely to benefit from greater visibility over invoices, payments and business expenses like insurance, which could ultimately put them in a stronger position.”
