Why virtual work experience is a game-changer for young people Posted 07/04/2025 by Sophie Cross & filed under Members, Students. AAT launches their virtual work experience platform to break down barriers to access finance career opportunities. When Julie Spence walked into numerous accounting firms in Glasgow with her CV in hand, she was fighting against statistics that reveal the harsh reality of access to work experience in the UK. New research from AAT shows that over two-thirds (69%) of young people believe it’s unfair that access to work experience often depends on “who you know” – a barrier that Julie, now 29, award-winning and running her own bookkeeping firm, knows well. “The bigger firms, I didn’t hear any reply from,” Julie says of her early attempts to break into finance. “It was more the family-run firms I got a bit of interest from.” Her persistence paid off, but AAT’s new virtual work experience platform, launched in partnership with Springpod, means future generations won’t need to rely on the same combination of determination and luck. The cost of opportunity Julie’s story highlights research findings that reveal work experience remains a pathway heavily influenced by geography, cost, and personal connections. While 88% of young people believe work experience would help with job applications and 74% say it would clarify their future career choices, significant barriers prevent many from accessing these opportunities. The financial reality is stark: 41% of young people have less than £8 per day to spend on work experience-related costs such as travel, food, and suitable clothing, while 8% say they simply couldn’t attend work experience unless expenses were fully covered. For Julie, who self-funded her AAT qualifications while working, these barriers were particularly challenging given her background. “I struggled a lot paying for the qualification myself,” she explains. “I was fortunate that my mum and dad supported me a little bit, but not everybody has that. So, I think it’s fantastic that these opportunities are coming up for young people.” Geographic inequality The geographic challenge Julie faced in Glasgow reflects a broader national issue. AAT’s research shows that 40% of employers host work experience candidates in Greater London, despite only 31% of survey respondents being based there. This concentration of opportunities in urban centres leaves young people in smaller cities and rural areas at a significant disadvantage. Julie’s clever idea was to complete online certifications for various cloud accounting software packages, demonstrating her commitment to the field. “I felt like my only way of gaining entry would be to showcase to employers that I might not yet have a qualification behind me, but I’m fully self-funding my own courses, and here’s what I’ve done in the meantime.” This approach proved successful when Letham Cache, a small family-run firm, gave her that crucial first opportunity. However, as Julie reflects, “I wish virtual work experience was something that was available to me when I started this journey.” The virtual solution AAT’s online work experience program is all about tackling the inequalities that Julie beat with her grit. The platform removes cost barriers by offering an introduction to accounting and bookkeeping with opportunities to practice real-world skills and hear from industry professionals – all without the need for travel or accommodation costs. The potential impact is significant: 67% of young people believe virtual work experience is more accessible, and 72% say it allows them to apply for placements outside their local area. For employers, who have been adapting their approaches with 19% now offering virtual placements over the last three years, this represents a powerful way to access diverse talent pools. “Virtual work experience makes it possible for young people to gain early exposure to the world of work, wherever they are,” Julie explains. “Not everyone has access to placements on their doorstep, but this levels the playing field.” Building confidence and skills Julie’s journey from reluctant school leaver to successful business owner demonstrates the transformative power of work experience. After leaving school at 16 following bullying, she found herself in Business Administration instead of her preferred Drama class – a seeming setback that became the foundation of her career. Her first work experience placement provided invaluable hands-on learning that complemented her AAT studies. “It’s very different putting certification knowledge into a real-life scenario,” she reflects. Starting with basic data entry and payroll processing, she gained an understanding of why processes matter: “We all know that staff need to get paid when it’s expected and it has to be accurate.” This practical experience gave Julie confidence that purely academic learning couldn’t provide – something that 62% of young people worry about missing if they can’t access work experience, fearing it will negatively affect future job opportunities. Addressing employer challenges The research reveals that employers recognise the value of work experience, with 65% stating that it helps them identify future employees and 49% reporting an improved organisational reputation. However, 29% of employers struggle to find candidates from diverse backgrounds, and rising costs present challenges, with 29% saying increased operational and staffing costs affect their ability to pay students or cover expenses. Virtual work experience offers employers a solution that provides flexibility while enabling them to access a diverse range of talent. As Sarah Beale, AAT CEO, explains: “Done right, virtual placements give employers flexibility and could provide a desperately needed talent pipeline, helping young people gain vital experience and develop transferable skills without financial or geographic limits.” A catalyst for change Julie’s experience of moving through different-sized practices – from small family firms to medium-sized businesses to large corporations – provided her with a comprehensive understanding of the industry, informing her decision to start her own practice. Her firm has scaled rapidly in its first 18 months, earning Julie AAT’s ‘One to Watch’ Impact Award. Now, Julie’s big-picture goal is about more than just her own success. She plans to establish an Accountancy Academy – creating a talent pipeline that addresses the UK’s shortage of skilled accountants and bookkeepers. “The reason why there’s such a shortage of good accountants and bookkeepers in the UK isn’t anything to do with not having the right type of talent,” she argues. “It’s not giving people the opportunity to uplift them and enable them to showcase what their possibilities and potential are.” Levelling the playing field The statistics paint a clear picture of inequality: while 77% of young people take part in work experience, more than a third (34%) rely on family contacts, and only 16% secure placements independently. This system perpetuates advantage for those with existing connections while excluding others based on postcode or family circumstances. AAT’s virtual work experience programme represents a significant step toward addressing these inequalities. As Beale notes: “Too many young people are locked out of early career experiences simply because they don’t have the opportunities or the right connections. That’s a clear barrier to social mobility, and one we are determined to break down.” A vision for inclusion and the future of work experience Julie’s advice to young people facing similar challenges is: “If somebody says no, it doesn’t mean that the rest are going to say no. I tried to make it a bit of a game – I’m going to go out today and get 15 no’s, but for those 15 no’s, I’m one step closer.” However, as Julie acknowledges, not everyone has the confidence or resources for such an approach. Julie is now committed to creating opportunities for others, and her big vision is to one day open an Accountancy Academy, demonstrating that there’s also a ripple effect of inclusive access to career development. AAT’s virtual work experience gives young people a clear route forward without having to beat the system through sheer perseverance alone. “This is about investing in potential,” says Beale. “We want a profession that reflects the diversity of our communities and is open to all, not just those with the right postcode or connections.” AAT’s virtual work experience programme is available at springpod.aat.org.uk. The research was conducted by 3Gem Research and Insights, surveying 1,000 14-18-year-olds and 350 UK companies in May 2025.
From farming to finance: How virtual work experience shaped a career path Posted 07/04/2025 by Sophie Cross & filed under Members, Students. AAT apprentice Laura Watson’s journey proves that structured virtual placements can be even more valuable than traditional work experience. Laura Watson would sit at her family’s farm table, helping her mum with the accounts and hoping that one day she’d have a career in finance. A few years later, she passed her AAT Level 4 Diploma in Professional Accounting and is working as an auditor through a five-year apprenticeship programme. An important part of her success story was a two-day virtual work experience placement that opened her eyes to opportunities she hadn’t previously known existed. “I just thought that I needed to find a job where I could become an accountant and do bookkeeping all day, every day,” Laura reflects. “Then I realised, oh wait, no, finance is so much more than that.” Her experience highlights exactly why AAT’s newly launched virtual work experience platform could be transformative for young people across the UK. Laura’s story demonstrates how virtual work experience can overcome the barriers that AAT’s latest research reveals are blocking young people from accessing career opportunities. With 41% of young people having less than £8 per day to spend on work experience-related costs and 69% believing access depends unfairly on “who you know,” Laura’s journey shows how virtual platforms can level the playing field. Breaking down traditional barriers Laura’s path into finance wasn’t straightforward. Unlike many of her school peers who were steered towards university, she knew she wanted an apprenticeship route. “My school was very university-focused,” she explains. “I very much had to do the process on my own.” This lack of institutional support reflects a broader issue where only 16% of young people secure work experience placements independently. The geographic and financial barriers that affect so many young people could easily have derailed Laura’s ambitions. Living on a farm in Chester, she faced similar challenges to those highlighted in AAT’s research: 40% of employers host work experience candidates in Greater London, creating geographic inequality for young people in other regions. “I couldn’t just turn around and go, ‘Okay, let’s go to a placement for a week,'” Laura recalls of her situation during A-levels. “I was revising for exams; I had a lot on my plate.” The inflexibility of traditional in-person work experience, combined with the practical challenge of location and other costs, would have been insurmountable obstacles. The virtual solution in action Laura’s virtual work experience opportunity was a two-day placement with a wealth management company, bringing together 200 participants on a single platform. “It was very informative and structured,” Laura explains. “Every hour or two, we’d go to a different department. The head of that department had prepared a presentation, and they’d chat with us about what they do, show us examples, and get us involved.” This structured approach addresses one of the key challenges of traditional work experience that Laura identified: “Real world work experience can often be quite unplanned and a bit here and there, whereas the virtual one means you know exactly what you’re going to get out of it.” Building professional skills and confidence The virtual delivery brought other unexpected benefits. Laura could interact with other participants and access departments and senior professionals she would never have encountered in a standard placement. Beyond exposure to different career paths, it also provided practical professional development. The programme included LinkedIn workshops and CV writing sessions – skills that proved invaluable when she began applying for apprenticeships. “They covered CV writing – I knew I needed to draft one, but it was a very daunting task,” Laura recalls. “Those little sessions were really informative.” The professional development element gave her the confidence to navigate the job application process independently. The networking opportunities also exceeded what traditional work experience might offer. “So many people were contributing to the chat and asking questions that it allowed people to connect with each other and with presenters,” Laura explains. “It allowed for greater networking despite being virtual.” Accessibility and inclusion Virtual work experience can make opportunities accessible to young people who might otherwise be excluded. The financial barriers alone – transport costs, professional clothing, and time away from studies – could have prevented her participation. “I can’t imagine what it would be like if you had to organise all your transport and buy yourself new fancy clothes,” she reflects. “That wouldn’t have been accessible for me at the time based on my personal scenario.” This accessibility is crucial for diversifying the finance profession. As Laura observes: “You think of accounting and finance and there’s an image in your head of a middle-aged man in a suit walking across London Bridge with a briefcase.” Virtual work experience helps break down these stereotypes by making the profession accessible to young people from all backgrounds. Real-world impact The virtual work experience had a direct impact on Laura’s career trajectory. While the placement was with a wealth management company and she ultimately became an auditor, the broad exposure to finance roles gave her the confidence to pursue opportunities she might not have considered. “I wouldn’t have understood the different roles available, and I wouldn’t have been so ready to apply for my role,” Laura reflects. “Because I got this understanding of everything and was given that opportunity, it made everything so much smoother.” Lessons for the future Laura’s advice for young people considering virtual work experience emphasises active engagement: “Keep your attention focused and try to interact as much as possible. Post things in the chat and ask questions. No question is a silly question – just get as much as you can out of it.” She also highlights the importance of virtual work experience in addressing educational gaps: “School was so focused on university applications, but so many people go straight to work and take different opportunities. It’s really important that these work experiences are made accessible to everyone to show there are other things out there.” Transforming access to opportunities Laura’s story illustrates exactly why AAT’s virtual work experience platform represents such a significant step forward. As AAT CEO Sarah Beale notes: “Virtual placements are a powerful way to level the playing field and provide a desperately needed talent pipeline, helping young people gain vital experience without financial or geographic limits.” The structured, professional approach that Laura experienced – with planned presentations, skills workshops, and networking opportunities – demonstrates how virtual work experience can actually provide more comprehensive exposure than traditional placements. For young people like Laura, who faced geographic isolation and financial constraints, virtual platforms remove barriers that might otherwise limit their career prospects. AAT’s virtual work experience programme is available at springpod.aat.org.uk. The research was conducted by 3Gem Research and Insights, surveying 1,000 14-18-year-olds and 350 UK companies in May 2025.
7 reasons to get excited about AAT Connect Posted 07/03/2025 by AAT Comment & filed under Community, Events, Members. AAT Connect is back by popular demand. Expect a day packed with valuable insights and meaningful connections as we celebrate your impact. Last year’s first-ever AAT Connect was a huge success, so on Friday 7 November we’re returning to The Brewery in London for a day-long experience built around the things that matter most to our members. Here’s what you can look forward to. Sign up now 1 get expert support Early birds can drop into one of our breakfast clinics, while those of us that like a lie-in can join one of the 1-2-1 clinics running throughout the day. 2 flexible schedule In fact, you can take the whole day at your own pace, with options to have a hot drink while you mingle or dive straight into breakfast sessions and member-led panels. 3 meet your peers We’re keeping the member lounge open all day, helping you catch up with old friends and meet new people. 4 enjoy a three-course meal Sit down and enjoy great food and drinks with your peers before kicking off the AAT Impact Awards. 5 celebrate your achievements The AAT community is full of amazing people with wonderful talents and a hard work ethic. The Impact Awards are about celebrating you and your work in your communities. Nominate someone here 6 navigate better with our app It’ll be easier than ever to find and stay connected with AAT members and our partners. 7 all of this for an affordable price Just £59 buys you a full day of learning, networking and celebrating. Sign up now
AAT success stories: escaping slavery and finding a new life with AAT Posted 07/03/2025 by AAT Comment & filed under Inspiring stories. When Deepika Deepika was sent to the UK, she had no idea what was to come. This is how she broke away from a life of control and found a fresh start with AAT. Deepika Deepika at a glance… Age: 44Top tip for students: Keep smiling, keep going and be an inspiration to others as they might be having a tougher time than you. Deepika Deepika was married with three children and worked as an accounts manager in her home country of India. On the outside, everything might have seemed well for this highly educated woman. But Deepika had an abusive married life and, in 2019, was sent to the UK by her husband with two of her three children, where she became a victim of modern slavery. Her eldest daughter was kept in India as a controlling factor and all of her official documents, belongings and proof of identity were taken from her. She was kept as a slave to a family in Leicester for two years before running with her two children to the police and beginning the process to seek asylum. After moving between different cities and hotels, she ended up in Nottingham, where her social worker encouraged her to start studying again with AAT. Finding AAT and starting again Deepika started and passed AAT Level 2 and moved on to Level 3 in 2024, but this was to be the toughest part of her journey yet. “I was having a lot of treatment and dealing with past trauma and all the physical and mental issues with my health, including PTSD, depression, anxiety and blood clots in my lungs,” she said. “I’m on lifetime medication and my depression medication was at a very high dose. I was in hospital many times and, in May 2024, I was in bed for a month while being a single mum, but I still managed to take my GCSE maths, English and AAT Level 3.” Deepika was determined to keep going, persevere and do whatever it was for herself that would make her feel better. She had to keep reminding herself that it wasn’t just her at the lowest point, and many others were suffering too. She wanted to take back control of her own life. Career aspirations and volunteering Deepika can’t be employed in the UK while seeking asylum, but she has been doing voluntary work as a teaching assistant in her son’s school and at the foodbank in the church near her house. Deepika’s goal is to get a job as an accountant, as she knows she has the skills and capabilities and is dedicated to her continuing professional development, attending AAT branch events and webinars. She has travelled to London for an AAT event, expanding her network and is also helping other students on their journeys. Deepika added: “AAT is a great professional body that helps its members in many different ways, and they are really good at guiding you if you have any problems.” Further reading AAT success stories: from student to business owner AAT success stories: a fresh start in a new country AAT success stories: defying the odds to become a qualified accountant
Updated list of high-risk third countries as of June 2025 Posted 07/01/2025 by AAT Comment & filed under Anti-money laundering, Anti-money laundering, Members. FATF has announced the latest changes to high-risk third countries. Check if you’re at risk. Under the UK’s legislation, any business relationship with a person established in a high-risk third country (HRTC) must be subject to enhanced due diligence (EDD) (Regulation 33(1)(b), MLR 2017). AAT Connect is back Join us for our biggest in-person member event of the year on Friday 7 November at AAT Connect. Find out more Under Regulation 33(3)(a) MLR 2017, a HRTC is defined as: “a country named on either of the following lists published by the Financial Action Task Force as they have effect from time to time high-risk jurisdictions subject to a call for action (i.e. ‘black list’) jurisdictions under increased monitoring (i.e. ‘grey list’)” The latest Financial Action Task Force (FATF) Plenary concluded on 13 June 2025, with the following outcomes: 1. The FATF suspension of the Russian Federation continues to stand. 2. The following changes were made to the list of Jurisdictions under Increased Monitoring (‘grey list’). Countries added to the grey list Bolivia British Virgin Islands Countries removed from the grey list Croatia Mali United Republic of Tanzania What does this mean for your firm, including sole practitioners? Firms must: Review their existing client list to identify whether any of their clients are now considered to be established in a HRTC and undertake and record appropriate enhanced customer due diligence (EDD) measures. Guidance around EDD measures can be found in Section 5 of AML Guidance for the Accountancy Sector (PDF). Consider whether the changes mean their clients are no longer connected to a HRTC and consider the level of customer due diligence required using a risk-based approach. Ensure their client onboarding procedures, Policies, Controls and Procedures (PCPs) and their firm-wide risk assessment refer to the FATF’s lists. These lists are updated three times a year, on the final day of each FATF plenary meeting, held every February, June and October. AAT’s AML helpline AAT’s AML helpline offers advice for AAT-supervised firms on all aspects of complying with the Money Laundering Regulations, such as advice on how to report suspected illegal activity. To discuss any questions you might have, call us on +44 (0)20 7367 1347 or email [email protected]. We also have a dedicated page with the AML recourses. AAT Connect is back Join us for our biggest in-person member event of the year on Friday 7 November at AAT Connect. Find out more
Leading the way with Open Banking Posted 06/30/2025 by Christian Doherty & filed under Future Finance, Members, Technology. How secure data sharing is developing the UK economy, and where innovation might take us. A little over ten years ago, the Competition and Markets Authority (CMA) advised the UK government that the banking and financial services sectors were in need of greater competitive balance. Among the remedies for this was a push to create and promote Open Banking (OB), a system whereby secure data can be shared between banks and other bodies through linking tools called APIs. “Initially, open banking was implemented following a competitions audit by the nine biggest banks, the CMA9, by Competition Market Authority. That was initiated for many reasons, but one of the big drivers was to encourage innovation into the market,” explains Helen Child, CEO of Open Banking Excellence (OBE), a body set up to bring together innovators in the OB space. Don’t miss out on the licensed member support series We’ve tailored a webinar series for practice owners seasoned and new. Get insights and practical guidance from industry experts, covering essential and emerging topics relevant to SMEs. Sign up now Embedded systems Fast forward a decade and a half, and much of the intended progress has been made, with the UK now a leading fintech centre. On the back of that, in 2025 Open Banking is already embedded into the UK’s financial ecosystem, through the banking system, payments and so on. People and businesses in the UK are increasingly making use of Open Banking to make payments by bank transfer, with 11 million current users of Open Banking services in the UK. The Treasury is forging ahead with establishing Open Banking as the foundation of the UK’s payments and data-sharing landscape. At the end of last year, the Treasury published its National Payments Vision, in which it said with its significant untapped potential, “Open Banking has a vital role to play in achieving this ambition in the near-term – in particular, through unlocking account-to-account payments for e-commerce.” The government, it went on, “Expects the regulators to ensure a strong focus on competition and choice in their work to support the development of Open Banking.” Key facts A total of 1.988 billion API calls were recorded in May. That’s 13.5 million users (a 2.2% increase on the month before) HSBC reports one open banking transaction per second Governmental seal of approval Regulators will be building on a solid foundation, as Open Banking’s role in the financial ecosystem has grown considerably in recent years. And, this year, a major breakthrough took place. “If you paid your self-assessment tax online this year, then you’ve already used Open Banking,” Child says. “In January 2025, for one duty type, we saw £12 billion of taxes collected in a seamless transaction.” HMRC chose to develop an open banking service based on account-to-account transactions, where users give secure consent for a trusted third party to access that data for a given purpose, such as collection of taxes for a given time. “They initially did it to reduce card fees, which created a bottom line saving for UK PLC,” says Child. However, beyond that, account-to-account transactions mean there is no reconciliation involved, so no funds are held in suspense, creating a more efficient system at a lower cost. And that matters: January’s tax take involved 3.6 million payments, with the largest just short of £1 million. Following that success, HMRC has signalled that it intends to implement this system across other tax types. Open Data infrastructure Beyond that, the use cases for Open Banking then morph into a manifesto for creating an integrated Open Data infrastructure. “We’ve recently seen Sage really driving forward how they can introduce standards to make it easier for accountants and small businesses, to report on their emissions and that would be not necessarily through open banking but through open data,” Child says. “So if we widen the scope, that open access with secure consent gets really exciting. The Data, Use and Access Act, as it now is, is driving the UK to lead in that area of data sharing. I think that’s compelling.” Part of that might involve using the OB infrastructure to encourage more secure and real-time data sharing. For instance, a recent project at Companies House focused on developing APIs that would allow real-time data sharing by companies to give more up-to-date information to users. Technological adoption Then there are the banks themselves. NatWest, for instance, has developed its own accountancy software, Free Agent, which uses Open Banking, and, along with other banks, is working closely with a range of fintechs to develop more sophisticated APIs and use cases. “NatWest also has one on sustainability, Kogo. Then you look at who HSBC has its key relationships with, it’s everything from digital identity to accountancy software to sustainability to credit checking,” says Child, pointing to recent developments at Experian. “No longer am I giving you access for Experian to look at my ability to pay for a loan. That’s historical. Now it’s about my real-time ability to pay forward, which is a more accurate measure of my financial position.” Meanwhile, the accounting software providers continue to use the OB infrastructure to develop more services. For instance, QuickBooks is looking at offering 90‑day forecasts driven by live bank data, while the Tide and Sage integration bundles banking and accounting services together for a more seamless experience. Despite all this, there does remain some reluctance to fully adopt OB, partly due to risk aversion or lack of knowledge. But Child says 2025 should be a pivotal year for that. “If you’re an accountant, you’re already using it. It’s secure – HMRC backs it.” If you’re using QuickBooks, Zero Tide, Sage, you’re using Open Banking. “So my message would be: engage with your software suppliers and learn how you can get more. And look at the efficiencies the government are getting: you can have a slice of that cake. Speak to your accountancy software suppliers and ask them how you can get involved.” Don’t miss out on the licensed member support series We’ve tailored a webinar series for practice owners seasoned and new. Get insights and practical guidance from industry experts, covering essential and emerging topics relevant to SMEs. Sign up now
Improvements to sanctions content Posted 06/27/2025 by AAT Comment & filed under Anti-money laundering, Members. Following a cross-government review, changes have been made to GOV UK. The changes to be aware of a new sanctions hub page on GOV.UK that signposts essential UK sanctions content an expanded collection of industry guidance for the Russia sanctions regime an improved regimes guidance collection page a pre-filtered sanction search of GOV.UK which allows users to find all UK sanctions content by keyword, date and content type Don’t miss out on the licensed member support series We’ve tailored a webinar series for practice owners seasoned and new. Get insights and practical guidance from industry experts, covering essential and emerging topics relevant to SMEs. Sign up now
Financial sanctions: The basics Posted 06/27/2025 by AAT Comment & filed under Anti-money laundering, Members. Office of Financial Sanctions Implementation (OFSI) has released a new video series on how to comply with obligations. The video series provides high-level, accessible guidance on OFSI’s processes and how to comply with financial sanctions obligations. Topics include Introduction to OFSI and financial sanctions OFSI’s guidance The consolidated list Reporting information to OFSI General licences Specific licences Watch the videos now
What can you do to be accepted as an ACSP by Companies House? Posted 06/27/2025 by AAT Comment & filed under Anti-money laundering, Anti-money laundering, Members. To prevent your application to act as Authorised Corporate Service Provider (ACSP) being rejected, here are the steps you need to follow. AAT Connect is back Join us for our biggest in-person member event of the year on Friday 7 November at AAT Connect. Find out more 1 Ensure AAT is your AML supervisor Do: Check if AAT appears as your Anti-Money Laundering (AML) supervisor on AAT’s AML directory. There have been instances where members thought they were being supervised by AAT when they were not. If you have any questions, please contact our Customer Support team at [email protected]. 2 Use the correct AML membership number Do: Use your ID membership number, which you can find on your MyAAT account. Don’t: use your license ID number, and don’t include any letters or special characters. 3 Use the correct business/entity name and address Do: Ensure your business/entity name and address exactly match the details on your MyAAT account. If you notice that your business details and/or the address are incorrect on your MyAAT account, you will have to update your details and wait for two weeks before you can re-submit your ACSP application. This is because AAT shares the data set with Companies House every two weeks (see agreed process below). Don’t: Omit any parts of the name or use any variations. Members with recently granted licence and AML supervision You will have to wait for two weeks from the approval date before you can submit your ACSP application. This is because AAT shares the data set with Companies House every two weeks (see agreed process below). Agreed process with Companies House Once the application is received, Companies House conducts verification checks against the data set, which is shared by AAT every two weeks. If needed, it will also check AAT’s AML directory. If Companies House is unable to verify the application details, your application will be rejected and your registration fee will be refunded. You will be able to submit another application but before you do so, please ensure that you carefully follow the steps outlined above. Read more about ACSPs Identity verification and Authorised Corporate Service Providers (ACSPs): what you need to know ACSPs, are you meeting the Companies House ID verification standard? AAT Connect is back Join us for our biggest in-person member event of the year on Friday 7 November at AAT Connect. Find out more
Setting up new business procedures for MTD for IT Posted 06/26/2025 by Caroline Roberts & filed under Making Tax Digital, Members, Practice management. Accountants and bookkeepers discuss how they’re preparing clients for MTD, and the software they’re using. The clock is now ticking down to the introduction of Making Tax Digital for Income Tax (MTD for IT). Clients with a qualifying income of over £50,000 will be affected from April 2026, with the income threshold falling to £30,000 from April 2027 and £20,000 the following year. In theory, digitalisation should make it easier for everyone to pay the right amount of tax and the government hopes it will help close the estimated £5 billion self-assessment tax gap. But the requirement to file quarterly accounts and use compatible software represents a big change for many small businesses. And MTD poses a lot of questions for accountancy practices, such as: How can we ensure that our clients are ready for the new requirements and that they will comply with them? How will we manage the introduction of any new software needed for MTD? What will be the implications for our practice in the longer term? We spoke to accountants and bookkeepers to find out what steps they’re taking to prepare. Don’t miss out on the licensed member support series We’ve tailored a webinar series for practice owners seasoned and new. Get insights and practical guidance from industry experts, covering essential and emerging topics relevant to SMEs. Sign up now We’re considering starting a separate company for MTD Sylvia Bourhill FMAAT, owner, Another Answer Books and Accounts We’ve been doing some webinars about MTD for clients and other businesses in the local area, which we promoted on social media. I’ve also done presentations for businesses and written articles in our local magazine. It’s important to keep it MTD in front of people so they don’t just stick their heads in the sand. I’ve also managed to persuade three of my clients to join the pilot starting this year, which I won’t be charging for. It means we can work our way through it together so we’ll be ready next April. I’ve signed them up through QuickBooks, which is a simple option and seems to be on the ball with the changes. Cost is going to be a big issue in the future. We’re considering starting up a separate company that will just do MTD. I have a business with 10 staff and overheads and people at the lower end of the income threshold are unlikely to be able to afford what I would need the charge them to do their bookkeeping and MTD. A small MTD company would make it more affordable. Verdict: Joining the pilot is a good learning opportunity which should help us get ready. Cost is going to be an issue in future but we’re considering starting a separate company for MTD. We may have to lose clients that won’t engage Karen Chugg FMAAT AATQB, owner, Phoenix Bookkeeping Firstly, I have to check clients’ turnover. Those affected will be sent letters by HMRC but I can’t guarantee they will pass them on. Thankfully, my list will be quite small for the first year. I’m a Xero-only practice, although I do also use VT+ for the smallest clients. Xero have now announced Xero Simple, which will be perfect for MTD, so I’ll be contacting clients to make them aware of the need for the software. We also want clients to have a bank feed so they can stay on top of their accounts monthly. It won’t be easy to get people to change their ways. We live in a rural area and still have a lot of small ‘paper bag’ clients, who won’t touch software and some won’t do online banking. We’re looking at the easiest way of getting that information from them, and trying to persuade them to open business accounts. We’re going to have to move all our self-assessment clients over to our Agents Services Account. I hope that we can see them on a list there, because you can’t with the VAT clients and have to type the VAT number in to find them. I don’t want to have to do that for the self-assessment clients too. I anticipate that a few clients won’t want to engage with MTD and won’t bring the paperwork in on time. I’ll be disengaging anyone who won’t work with us as we won’t have time to deal with clients who won’t be compliant. Verdict: Getting clients to engage with MTD is going to be the biggest challenge, and we won’t have time to deal with clients that won’t be compliant. Start preparing early using a gradual, stepping-stone approach Samantha Mitcham FMAAT, owner, SJCM Accountancy My practice will be sticking with our preferred software vendor, Sage. We are not a one-software-fits-all practice, but we’ve done our research when it comes to MTD and I think Sage have by far the best offering for my clients both from a price point and a usability perspective. We have been discussing MTD for income tax with our clients for quite some time now and we’ve found a stepping-stone approach works best. First, we ensure they are using a business bank account because nobody wants to be filtering through Netflix and Just Eat to find the business transactions. Then we talk about software. We provide demos via screen-record videos and explain the positive aspects of using software. We then discuss service level and cost to enable clients to start thinking about whether they wish to make their quarterly MTD submissions themselves or pay us to do so. A key lesson from MTD for VAT was to not leave preparation too late. There will be a lot of changes to workflow and we need to think about exactly how this will look in the future. Preparing this amount of work on a quarterly basis is new for us and will likely take a few years to get used to. We will need to overcome pricing challenges and also ensure we have the correct staff and capacity to service our clients well. Verdict: It’s vital to prepare early and also think about how it will affect your practice in the longer term. We’ll likely use HMRC’s suggested bookkeeping software Craig Dyer MAAT AATQB, owner, CA Dyer Accounts and Bookkeeping MTD is certainly going to have an interesting impact on accountants and taxpayers over the next few years. However, I think both HMRC and accountants will have learnt from the frustrations around MTD for VAT so we won’t see the same level of impact. There’s been a long run-in to it and there’s access to a lot more information and support. It’s important to be proactive and we’ve been preparing by attending as many webinars and training events as possible to make sure we are up to speed on the procedures when they go live. We’ve discussed the changes with a small number of our partners as the majority won’t be affected until the next wave at £30,000. It’s a concern that most of those we’ve spoken to were unaware of the changes. That’s a worry when it comes to those sole traders and landlords who don’t partner with an accountant. We’ve not currently invested in new software and will likely use the bookkeeping software suggested by HMRC to submit as this will be the most efficient and cost-effective way of doing so for the type of partners we have. Verdict: At the moment using HMRC’s suggested bookkeeping software will be the most cost-effective way for us to submit. Don’t miss out on the licensed member support series We’ve tailored a webinar series for practice owners seasoned and new. Get insights and practical guidance from industry experts, covering essential and emerging topics relevant to SMEs. Sign up now