Addressing the final sticking points in MTD

With Making Tax Digital just days away, accountants discuss the final issues they’re overcoming.

Making Tax Digital for Income Tax (MTD for IT) launches on 6 April 2026 for sole traders and landlords with qualifying income of £50,000 and over. Qualifying income is gross income from self-employment and property before any tax allowances or expenses are deducted.

They will need to:

• keep digital records,
• use MTD-compatible software and
• submit quarterly summaries of their income and expenses to HMRC.

As we enter the final stretch in the run-up to MTD, we asked accountants about last-minute sticking points, areas of uncertainty, and their reflections on the journey to this point.

There are still some technical hitches with my online accounts

Karen Chugg FMAAT AATQB, owner, Phoenix Bookkeeping

I’ve had trouble accessing clients on HMRC, although it says that my Agent Services Account is connected to my Online Services Account, no clients are showing, so I am going to have to contact HMRC to sort it out.  Hopefully, I won’t spend hours on the phone trying to get through. 

The worst thing is that there is no list of clients, and you have to enter the UTR number to find a client. This is very time consuming and is also making me wonder if letters will start to come through with no client name on, like they do with MTD VAT, so you have to look the number up. Accountants would love HMRC to put all clients in a list in the ASA.

The biggest problem with clients will be getting them to authorise me as a lot of them don’t have the Government Gateway or don’t know their log in. I remind them that they managed to find it and use it to make SEISS claims during Covid.

I think overall it will be fine once we’ve got the first batch filed, but it’s getting to that point. For the next tranche of £30K qualifying income, we anticipate signing them up a lot earlier so that we are ready for April 2027.

I was at an AAT branch meeting recently and somebody pointed out how great MTD will be for us, as we will have all the info we need by the fifth filing and HMRC will populate a lot of the other items required. So, by the time all clients are on it, the January madness should go away.

Once clients are fully set up on the system and we’re into the fifth filing, everything should be easier – including January madness.

We need clarity on mixed income sources

Bev Flanagan MAAT, Owner, Bev Flanagan Financial Ltd

Overall, the run-up to MTD has been reasonably well managed, although there are still questions and uncertainties among both practitioners and clients. It’s confirmed that there won’t be any late filing penalties during the first year, but HMRC haven’t laid out exactly how long the grace period is or what the reminder process will be. So, there’s still some uncertainty about how late you can be before action is taken. Most of us are just waiting to see how it plays out in practice.

There’s also the question of whether income such as dividends, interest, and foreign income needs to be reported through the same process or separately. HMRC’s guidance hasn’t been 100% clear, so some practitioners are still trying to work out the best approach for those with mixed income sources.

Unsurprisingly, there has been some resistance from clients when it comes to increased fees. MTD means more frequent submissions, more bookkeeping and, in many cases, the introduction of new software. However, when the changes are communicated clearly and clients understand that the service being provided is fundamentally different from a once-a-year tax return, most recognise the value of the additional support.

MTD is encouraging accountants to move away from the traditional once a year approach to tax reporting and towards a more regular, collaborative relationship with clients. While this requires adjustments to internal workflows and processes, it also creates opportunities for more proactive conversations and advisory support. MTD isn’t just a compliance change, it’s a mindset shift too. The firms that embrace it will build better systems, stronger client relationships and far more valuable practices in the long run.

MTD will create a more regular and collaborative relationship with clients that will result in better systems.

The main issue now is how to price services

Craig Dyer MAAT AATQB, Owner, C A Dyer Accounts & Bookkeeping

At our practice, only a very small number of self-employed individuals or landlords will be affected by the first wave of MTD. They are informed and ready to go, with plans in place to hit the ground running. However, I’ve spoken to others who are not as informed as they should be, especially those who’ve not had an accountant or bookkeeper to support them in the past. They rely far more on information directly from HMRC.

The level of support has been good. HMRC has run a number of webinars, training opportunities, and pilots. When you combine this with direct support from software providers and information and training sessions from professional bodies like AAT, members have access to a lot of support to help them through this transition period, and guide their clients. The main concern I hear from AAT members is how to price the change in provision and extra work, especially with price-sensitive clients. 

To practitioners not facing the change until next year, I’d say go out there and read as much as you can, listen to podcasts and attend webinars. Also, the AAT community really comes together at times like this and many of the awesome members help and support each other with signposting to great resources or a bit of advice.

I’m generally happy with the level of support, especially from AAT and its member community.

Not everyone’s sure of how detailed quarterly submissions must be

Nick Robinson, Managing Director, Yorkshire Accountancy Ltd

The support and communication around MTD has improved compared with earlier stages of the rollout. However, there is still some uncertainty among small business owners about what will be required in practice, particularly around quarterly updates and how detailed those submissions need to be.

One implication for accountants is that the workflow becomes more consistent throughout the year rather than heavily focused around the January deadline. In the long run that should benefit both accountants and clients, as it encourages more regular financial visibility rather than retrospective reporting.

My main advice to other accountants yet to be affected by MTD would be to start conversations with clients early and keep the message simple. Focus less on the legislation and more on the practical benefits such as better visibility of tax liabilities and more organised records.

Contact clients about MTD early, and keep messaging simple.

Caroline Roberts Journalist.