The 2026 Deadline
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) begins in April 2026 for most self-employed individuals and landlords with income over £50,000. The threshold drops to £30,000 from April 2027.
For accountants, this creates both obligation and opportunity: clients need guidance toward compliant systems, and the process of helping them strengthens your advisory relationship.
What MTD ITSA Requires
Digital Record Keeping
Clients must keep digital records using MTD-compatible software:
- Income and expenses recorded digitally
- No more shoeboxes of receipts
- No more spreadsheet-only approaches (with limited exceptions)
- Records must support quarterly updates
Quarterly Updates
Instead of annual returns alone:
- Four quarterly updates submitted to HMRC
- Summary of income and expenses
- Running totals maintained
- End of year finalisation
Compatible Software
Software must be able to:
- Connect to HMRC APIs
- Submit quarterly updates
- Handle the end-of-period statement
- Produce required reports
The 2026 deadline is firm. HMRC has delayed MTD several times before, but the current timeline appears stable. Assume April 2026 is real.
The Opportunity for Accountants
Deeper Client Relationships
MTD preparation involves:
- Understanding client operations
- Reviewing current systems
- Implementing new processes
- Ongoing support
This creates touchpoints that strengthen relationships.
Advisory Revenue
Clients need help with:
- Software selection and implementation
- Process design
- Training and support
- Ongoing compliance management
This is chargeable work, not just compliance administration.
Practice Efficiency
Standardised client systems mean:
- Consistent data quality
- Easier quarterly processing
- Automated data flows
- Less manual work
Client Preparation Timeline
Now - Mid 2025: Assessment and Planning
Actions:
- Identify clients affected by 2026 deadline
- Assess current record-keeping practices
- Identify technology gaps
- Develop transition plans
- Communicate with clients
Key Questions:
- Who's over the £50,000 threshold?
- What systems do they currently use?
- What's the gap to MTD compliance?
- What timeline works for them?
Mid 2025 - End 2025: Implementation
Actions:
- Select and implement software
- Configure for MTD requirements
- Set up digital record keeping
- Train clients on new processes
- Test submission capabilities
Priorities:
- Start with clients needing most help
- Allow time for teething problems
- Build in buffer before deadline
Early 2026: Final Preparation
Actions:
- Verify all systems working
- Conduct test submissions
- Address any remaining issues
- Finalise support arrangements
- Prepare for first quarter
April 2026 Onwards: Live Operation
Actions:
- First quarterly submission
- Ongoing support and troubleshooting
- Continuous improvement
- Preparation for 2027 threshold expansion
Don't wait until late 2025 to start. Implementation takes longer than expected, and clients will need time to adapt. Starting now provides buffer.
Software Considerations
For Different Client Types
Simple Sole Traders:
- Basic bookkeeping software
- Cloud-based, mobile-friendly
- Straightforward setup
- Examples: QuickBooks Self-Employed, FreeAgent
More Complex Businesses:
- Full accounting packages
- Multi-user capability
- Bank feeds and automation
- Examples: Xero, Sage, QuickBooks Online
Landlords:
- Property-specific features
- Rental income tracking
- Expense categorisation
- Examples: Property software with MTD compliance
Integration with Your Systems
Consider:
- Does client software connect to your practice software?
- Can you access client data for review?
- Does it support advisor collaboration?
- What's the data flow for quarterly submissions?
Client Capability
Match software to client:
- Technical comfort level
- Time available for record keeping
- Transaction volume
- Complexity of business
Pricing MTD Services
Preparation Services
One-Time:
- Assessment and planning
- Software selection
- Implementation and configuration
- Initial training
Pricing Approach: Fixed fee based on complexity. Communicate clearly what's included.
Ongoing Services
Recurring:
- Quarterly submission management
- Ongoing support
- Annual finalisation
- Continuous compliance
Pricing Approach: Monthly or quarterly retainer. Include in annual engagement letter.
Value-Based Positioning
MTD services are not just compliance:
- Better financial visibility for client
- Real-time understanding of position
- Advisory opportunities from better data
- Time savings for client and accountant
Price reflects value delivered, not just time spent.
Client Communication
Initial Outreach
Message:
- MTD is coming; here's the timeline
- Here's what it means for you
- We're here to help
- Let's plan your transition
Tone: Helpful, not alarming. This is manageable with proper preparation.
Addressing Concerns
"This sounds expensive"
- Spread cost over time
- Efficiency gains offset some cost
- Better information has value
- It's required regardless
"I'm not good with technology"
- Modern software is user-friendly
- We'll provide training and support
- Mobile apps simplify recording
- You don't need to be technical
"Can't I just keep doing what I do?"
- After April 2026, no (for those above threshold)
- Starting now is easier than rushing later
- Penalties for non-compliance
- This is happening across the economy
Building Practice Efficiency
Standardisation
Recommend consistent software choices:
- Easier to support
- More efficient processing
- Better integration
- Staff expertise concentrated
Automation
Set up for efficiency:
- Bank feed connections
- Automated categorisation
- Digital document flow
- Scheduled submissions
Workflow Integration
Build MTD into regular workflow:
- Quarterly review as standard touchpoint
- Data quality checking processes
- Clear responsibilities
- Escalation procedures
Beyond Compliance
MTD creates opportunities for more:
Real-Time Advisory
With quarterly data:
- Identify issues as they emerge
- Provide timely advice
- Prevent year-end surprises
- Add value throughout the year
Tax Planning
Better visibility enables:
- In-year tax planning
- Cash flow management for tax
- Capital allowances optimisation
- Income timing strategies
Business Advisory
Good financial data supports:
- Performance analysis
- Benchmarking
- Growth planning
- Operational improvement
Preparing Your Practice
Staff Training
Ensure team can:
- Explain MTD requirements to clients
- Support software selection and setup
- Handle quarterly submission processes
- Troubleshoot common issues
Practice Software
Verify your systems:
- Support MTD agent submission
- Integrate with client software
- Handle volume of quarterly processing
- Provide adequate reporting
Capacity Planning
Quarterly processing means:
- More touchpoints with clients
- More evenly distributed workload
- Different peak periods
- Need for consistent capacity
Ready to prepare your clients for MTD? We help accounting practices build efficient MTD preparation and ongoing compliance processes.
Book a consultation to discuss your MTD readiness strategy.
