Less Than Six Months to Making Tax Digital

The April 2026 Making Tax Digital (MTD) deadline is fast approaching, and a concerning gap has emerged between awareness and action among accounting practices. The next six months present a crucial opportunity for firms to transform this regulatory change into a strategic advantage.

Our recent survey paints a striking picture. While four in five accountants (79%) identify Making Tax Digital for Income Tax Self-Assessment (ITSA) as their biggest compliance challenge, only 3% have completed preparations for their clients. Alarmingly, 29% of accountants haven’t begun at all.

These figures might seem daunting, but the six months ahead don’t have to be a frantic scramble. They can instead be a genuine opportunity to reimagine client relationships, and to position your practice as an essential guide through this transition.

Closing the knowledge gap

Many sole traders are unprepared, and this is where accountants can make an immediate impact. Almost a third (31%) remain completely unaware of MTD, while 76% are seeking clearer understanding of its implications. Additionally, three quarters (74%) of sole traders are seeking greater support from HMRC – creating a clear opening for accountants to establish themselves as trusted advisers.

The first step is for firms to assess where each client sits on the digital-readiness spectrum – from tech-savvy clients who need minimal help to those requiring intensive support. Segmenting clients ensures efficient resource allocation and prevents anyone from being overlooked.

The next step is demystification. Rather than overwhelming clients with complex regulatory details, accountants should focus on practical demonstration. Explain that MTD is new legislation that moves firms to digital record keeping and quarterly reporting, replacing the traditional annual self-assessment.

By walking clients through their first digital entry and showing them how to submit a completed quarterly update, practices can turn compliance into confidence and transform MTD from a challenge into a catalyst for stronger client engagement.

Addressing concerns about workload

It’s hardly surprising that almost two thirds (65%) of sole traders worry that submitting quarterly updates will add significantly to their workload. For those firms that are accustomed to preparing one annual tax return, the prospect of four submissions a year sounds daunting.

However, firms that are already working on a quarterly reporting cycle often find the opposite to be true. The real gain is in efficiency – by embedding regular financial housekeeping into business routines. Income and expenses are recorded as they occur, rather than being reconstructed months later. With consistent record-keeping, each quarterly update becomes faster and simpler to complete.

Accountants play a vital role in helping clients to make this transition by recommending the right tools and establishing smooth data flows. Whether clients opt for a simple spreadsheet or a specialist bookkeeping platform, ensuring that the method integrates seamlessly with the practice’s own systems eliminates friction. Once clients experience a complete problem-free quarterly cycle, their initial concerns about time and effort usually fade.

The power of integrated technology

It’s no wonder, then, that many firms are investing in technology to accelerate the transition. The right technology transforms MTD from an administrative burden into operational advantage. When bookkeeping systems connect directly to tax preparation software, the need for manual data transfer disappears, thus reducing error rates and saving significant time.

Smart deadline tracking and automated notification systems create safety nets to help ensure compliance, while secure digital portals streamline document exchange. This technological infrastructure not only improves efficiency but can also create the capacity for more strategic, value-added discussions with clients.

By connecting accounts production, business tax and personal tax functions within a single platform, data flows between functions automatically. This ensures reporting consistency across clients with multiple income streams while greatly reducing manual input. Built-in practice management tools further enable firms to monitor each client’s progress through the quarterly cycle – helping to maintain compliance and deliver a smoother MTD experience overall.

Learning from early adopters

The experience of Thompson Taraz Rand, a Cambridge-based accountancy practice, offers valuable insights on how to prepare effectively for MTD. The firm began with a strong focus on client education, translating complex regulatory requirements into clear, actionable steps.

Rather than attempting a single large-scale migration, the practice adopted a staged rollout strategy. This approach revealed a significant advantage: the ability to backdate quarterly reports. This discovery allowed the firm to onboard clients gradually throughout the year instead of rushing as the deadline approached.

The practice paid particular attention to clients with complex income streams combining property portfolios, self-employment, investment returns and company directorships. By maintaining all these elements within integrated systems, the firm ensured consistency across each client’s tax profile while reducing duplication and errors.

Investment in professional development also proved valuable. The practice invested in staff training, with team members attending focused MTD events to deepen their understanding of how the changes should be implemented. This investment paid off, giving the team the confidence and competence needed for a smooth transition.

Additionally, the practice’s recent acquisition of a paper-based firm provided unexpected preparation benefits. Successfully transitioning that business from physical filing systems to digital workflows offered hands-on experience directly applicable to MTD implementation. Fully digital operations now enable the combined team to work flexibly across multiple locations while maintaining secure, real-time access to all client data.

A timely action plan

The months ahead require structured, deliberate planning to ensure a smooth transition to MTD. Success rests on starting with strong foundations and progressing methodically through clear implementation phases towards full readiness.

January: As an immediate priority, firms should focus on client analysis, identifying all those impacted by the initial MTD requirements. At the same time, practices should evaluate and test MTD-compatible software with a small pilot group of clients, refining workflows based on real-world feedback. This early phase is also crucial for staff development, building familiarity and confidence with the requirements of MTD.

February and March: Attention should shift to broader client engagement. Effective communication is essential – every client must understand what MTD means for them and the key timelines involved. Firms should establish quarterly submission schedules and set expectations about information submission deadlines to prevent confusion later. The rollout of MTD software should then accelerate, incorporating lessons learned from the pilot phase to streamline adoption.

March: Finally, March (at the latest) should serve as a testing and verification period. By this stage, every client should be properly configured and ready to complete their first quarterly update successfully. Building buffer time into this final month provides essential breathing room for resolving any unexpected issues, reinforcing client confidence that their firm is fully prepared to manage the transition effectively.

From deadline to opportunity

The transformation that MTD brings to sole trader and landlord tax reporting is undeniably significant, but it’s entirely manageable with proper preparation. It’s not just a compliance update but a true mindset shift – a change-management project that goes far beyond quarterly reporting.

The practices that emerge strongest won’t be those that just meet the April 2026 deadline – they will be firms that leverage the next six months to elevate their value proposition, streamline their operations and strengthen client bonds. The shift will embed agility and adaptability into the day-to-day, providing practices with the tools that will help clients make faster, more informed decisions with greater certainty – spotting challenges long before they become problems.

For the 97% of practices still in preparation mode, the path forward is clear. Time remains available, but it requires purposeful deployment. Start by establishing open dialogue with clients about MTD’s practical implications, build the digital infrastructure that makes quarterly compliance sustainable and cement your position as the knowledgeable partner that clients need to navigate this transition confidently.

Practices viewing MTD purely through a compliance lens will experience it as exactly that – a regulatory obligation to be satisfied. Those recognising it as a catalyst for practice evolution will find that April 2026 represents not an endpoint but a beginning – the start of more engaged client relationships, more efficient operations and more strategic service delivery.

 

Author Bio
Eva Mrazikova
Senior Director, IRIS
Product Marketing

"The practices that emerge strongest won’t be those that just meet the April 2026 deadline – they will be firms that leverage the next six months to elevate their value proposition, streamline their operations and strengthen client bonds."

Eva Mrazikova, Senior Director, IRIS