It's time to buckle up. MTD for income tax is no longer on the horizon; it's on the runway, and it's nearly time for take-off.
So, are you ready for the increase in work?
Don't worry if it feels like the ground is moving away fast: this 6-step "best practice" summary can help. Think of it as your essential, pre-flight check. Created by our accounting experts, it's based on years of working with the industry to prepare for this moment.
STEP 1 - Make sure you have segmented your client base
It's important to remember that not all clients need to switch to MTD right now.
Save precious time by working step-by-step. Start with those who need to file in accordance with MTD from this year.
The thresholds below are based on qualifying gross income, not profits, from sole trades, property, or a combination of both. Each cohort is determined by the gross income reported on the Self-Assessment return for the relevant tax year:
- Clients with gross income over £50,000 (per their 2024/25 return) must switch from April 2026.
- Clients with gross income over £30,000 (per their 2025/26 return) must switch from April 2027.
- Clients with gross income over £20,000 (per their 2026/27 return) must switch from April 2028.
STEP 2 - Check what data and sign-off you need from clients
Preparation goes a long way, so confirm what you need from clients and by when. Will they have to manually share data? Would they, or you, like them to review and approve submissions before they go to HMRC? There's no requirement for clients to approve quarterly updates, but it may be a useful stage in your workflow depending on the client relationship.
Remember that if a client has multiple trades, each one requires its own quarterly submission. UK properties, regardless of the number, need one submission per quarter.
STEP 3 - Start as soon as possible
Educating your clients takes time, and there's not much of it before the first submission in August. As you need information from the relevant client for every quarter, you must make sure you've met with them and explained what's required.
Then there are your HMRC checks. Your firm needs an Agent Service Account (ASA); this is a one-off setup. Each client must also be signed up for MTD through the HMRC website. Depending on the number of clients you have, minutes and hours can quickly add up.
STEP 4 - Plan to use your resources wisely
Make sure you decide who in your team is tending to which clients, and when they need to reach out to them. If the resulting plan seems overwhelming for your staff, there's good news. Outsourcing MTD admin tasks to a specialist third-party service provider is an option, and with the right partner, getting started is usually quick and straightforward.
STEP 5 - Check your digital systems are ready
MTD for Income Tax requires the right software. But have you chosen some? If so, is it properly onboarded, and are you aware of all its functionality?
It's also worth checking carefully for any manual processes that might slow you down or cause mistakes when work multiplies.
Overall, you want to make sure your system:
STEP 6 - Visit our MTD hub for guides and more
Get a strong grounding in MTD and discover how you can use it to upgrade your service offerings and become a trusted advisor to your clients.
