MTD income tax requires quarterly submission of income and expenditure and a final tax return through compatible software. In practice, this means a shift in how practices manage their workloads as there is potentially a lot more in-year client interaction.

“MTD doesn’t have to be complicated,” says Aaron Patrick, Head of Accounts at cloud-based accountancy practice Boffix, “but firms do need a clear roadmap and some honest conversations.”

Inspect your client base: who will be affected?

“The very first step is to look at your client base and work out exactly who will be affected, when, and by how much,” says Patrick. “We took a previous tax year and asked a simple question – if MTD had applied then, who would have been in scope?”

Boffix split clients into four ‘pots’ based on income and mandation year, then checked whether they would be affected from the next tax year or later on. “What shocked us was how few clients were affected in the first wave – roughly one in 10 initially, then 15% and 20% in later years,” he explains. “That left a large chunk of clients who weren’t affected at all, at least for now.”

Don’t ignore the clients who aren’t in scope (yet)

It might be tempting to focus on the few who are mandated and ignore everyone else. Patrick thinks that is a mistake. “The clients who aren’t affected are the ones everyone forgets about,” Patrick warns. “The instinct is to park them and say ‘no extra work, no problem’ – but those clients are hearing about MTD from HMRC, from software vendors, from social media and even from ‘John down the pub’ or ChatGPT.”

Build MTD into communications and questionnaires

One simple way to ramp up communication without drowning in additional emails is to bake MTD into your existing tax questionnaires and client surveys.

“At the end of our tax questionnaire we tell clients, based on what we know about you, we think you’ll be affected by MTD from tax year X – or we don’t expect you to be affected yet,” Patrick explains. “It’s just one line, but it reassures people who aren’t in scope and gets the others thinking early.”

This also makes clients take ownership. They see the MTD date in a document they already treat as important, rather than in a generic mailshot.

Experience the onboarding pain yourself

The mechanics of MTD authorisation and onboarding are very different from the old process, especially for new clients. “In my view, the hardest bit so far hasn’t been the client work, it’s been getting yourself set up with HMRC to submit the returns,” says Patrick, “The agent services account is a different beast from the old agent account and process we’re used to for SA100 clients.”

Patrick recommends feeling the friction first‑hand. “I put myself through the onboarding as if I were a client,” he explains. 

Getting clients onto software

HMRC’s requirements for MTD submissions are clear. Compatible software must maintain digital records, preserve them, and send quarterly updates of income and expenditure and corrections.

“If you’ve got sophisticated Excel, you don’t have to throw it away,” Patrick says. “Bridging software can be a perfectly sensible route, especially while you’re still choosing long‑term platforms.” The harder conversations tend to be about pricing and billing. 

“We’ve always been on monthly services, so building MTD into that model was natural for us,” Patrick says. “But firms who bill annually have had to sit down with clients and go, ‘we need to move you onto monthly payments – here’s how it works, here’s how we’ll collect the money’.”

Think about the tax return

For a time, firms will have two distinct client groups: MTD clients filing quarterly and an annual tax return through software, and non‑MTD clients still on self assessment.

“The biggest challenge I’ve found is that for the first time ever we’ll have a segmentation of our client base between MTD clients and non‑MTD clients,” Patrick explains. “Some of those non‑MTD clients are just a timing thing – thresholds will come down and they’ll migrate – but for a while you’re running two worlds side by side.” 

He adds: “Pick the right software for the right client, make it as frictionless as possible, but when firms are doing the tax return, the SA100‑equivalent, practices need to start thinking long term about what platform they’re going to be filing on."

Define your service levels 

It is hard to price and scale MTD without being clear about what you are actually selling. Boffix now has three defined levels, each with its own price point, checklist and workflow. Patrick describes these levels as: 

• “we do everything” – bookkeeping, quarterly submissions and final tax return;
• shared – “they do the bookkeeping, we do the quarterly submissions and final tax return”; and
• oversight – “they do it all, but we check they’ve submitted so we can still do the final tax return”.

Tighten client discipline 

MTD is a good chance to reset expectations with clients about the basics of good record‑keeping. “We’ve had to become much more disciplined about which clients we’ll take on for MTD,” Patrick says. “For us, a separate business bank account is now non‑negotiable. If we can get all their information flowing through a separate bank account, we can work with them – if not, the numbers don’t stack up for us or the client.”