Use outsourcing to ensure Making Tax Digital for Income Tax is a success for your Practice and clients

Are accountants ready for MTD IT?

At the outset of our webinar, we asked accountants how ready they were to implement MTD IT. The results were as follows:

• 5% of the audience felt completely ready
• 65% of the audience were making progress as planned and will be ready by April 2026
• 30% of the audience were not ready at all and needed help.

With around one in three of our audience not ready at all for the implementation of MTD IT, it may be time to contact Initor Global to explore options for outsourcing services in the lead up to April 2026.

The importance of digital record keeping for clients

The need to maintain digital records using compatible software is essential to deliver the government’s MTD project. Feedback from accountants involved in HMRC’s closed beta testing showed that clients who do not maintain digital records require significant support to get them up to speed about their new responsibilities. Taking time to introduce such clients to simple bookkeeping or accounting software to record income and expenses in advance of April 2026 will help, though challenges may remain to ensure records are maintained accurately and on time.

Accountants need to review all personal tax clients, fees, and margins

Under MTD IT, accountants will find it difficult to serve clients who cannot follow HMRC rules for submitting accurate information online each quarter. The risk of fines is high, and clients need to be kept up to date as penalties accrue.

By taking early action to understand which clients may struggle with digital record keeping, accountants will be able to resource work appropriately. Moving clients to a monthly subscription fee for personal tax work may help them understand the importance of accurate record keeping and make conversations about any increase in fees easier to complete. Accountants can also support clients by offering online learning tools or ‘how to’ guides to ease the transition to the new MTD world.

Of course, providing additional services requires a review of fees and pricing. At our webinar on 27 March 2025, we asked accountants how they were planning to set fees for clients requiring MTD IT services. Our audience responded as follows:

• 20% of the audience were not planning any fee increase at all
• 51% of the audience were planning to increase fees by up to 50%
• 25% of the audience were planning to increase fees by 51% to 100%
• 4% of the audience were planning to increase fees by over 100%

With 80% of accountants looking to increase fees, early engagement with affected clients is essential. Many accountants provided feedback that outsourcing would offer an effective solution to reduce the impact of any increase in fees on clients.

Client communication

Under MTD IT, most clients will need support to keep them on top of their responsibilities. This may involve additional communication when deadlines are looming, or when action is needed to correct errors or omissions. Automating messaging using email, SMS text or other media provides a cost-effective way to keep in touch with clients when a deadline is due. Where more action is needed, for instance where tax advice is required or unusual transactions are recorded in a quarterly submission, the accountant can contact clients directly, offering additional support and advice as needed.

Using a commercial Customer Relationship Management (CRM) system, bulk SMS text or bulk email system to automate messaging and track responses offers a cost-effective way for accountants to communicate with clients continuously while making the most effective use of any direct, human contact needed.

Choosing the right software is important

HMRC confirmed it will not be providing any compatible software for businesses who need to comply with MTD IT. Commercial providers are bringing a range of software to market to help individuals and accountants comply. Some businesses unfamiliar with digital record keeping have expressed concerns about the additional costs of software and the resources needed to maintain accurate records. Other businesses are concerned the software they currently use to maintain records may not be compatible with HMRC requirements.

Our webinar on 27 March 2025 covered these issues and our partners at Capium provided an update on the various software options for accountants and their clients as they implement MTD IT.

We asked our audience how they would use software to deliver bookkeeping services and submission of data to HMRC each quarter. The results were as follows:

• 21% felt clients should maintain records using any bookkeeping software they choose, and their Practice would file quarterly returns using commercial software
• 60% were planning to provide bookkeeping and quarterly filing services in-house using commercial software
• 19% of the audience were thinking about outsourcing bookkeeping and / or quarterly filing work.

With most accountants looking to provide services in-house and others relying on clients to maintain accurate records, accountants will need to look carefully at available resources to see how these additional services will be delivered. Outsourcing bookkeeping and quarterly filing of returns to HMRC provides a cost-effective way to make a successful transition to MTD IT and serve clients efficiently.

MTD IT services you can outsource now

Accountants can start outsourcing tasks and responsibilities now to prepare for MTD IT, as shown in the table below.

How do I find out more about outsourcing MTD IT services?

Initor Global’s outsourced bookkeeping, accounting and tax services are suitable for MTD IT client engagements. We offer a free trial of up to 10 hours of accountant time and we promise to turn your trial work around within 72 hours.

If you are an accountant looking to outsource services for the first time, increase margins and help your client’s meet their MTD IT responsibilities, you can book a video call with one of Initor Global’s expert advisors using this link or send an email to [email protected].