MTD for Accountants: What Your Practice Needs to Know

Last updated: March 2026

Making Tax Digital for Income Tax begins in April 2026, and accountants with sole trader and landlord clients need to prepare their practice now. This guide covers the practical steps: agent authorisation, multi-client filing workflows, software choices, and how to communicate the changes to your clients.

This is a practice-facing guide for accountants themselves. If you are a sole trader or landlord looking for an accountant to help with MTD, see our guide to how accountants help with MTD.

What accountants need to know about MTD for Income Tax

From 6 April 2026, your sole traders and landlords clients with qualifying income above £50,000 from self-employment or UK property must:

• Keep digital records using HMRC-recognised compatible software
• Submit quarterly updates to HMRC (by 7 August, 7 November, 7 February, and 7 May)
• File a final declaration by 31 January following the tax year end

Phase 2 follows in April 2027 (income above £30,000) and Phase 3 in April 2028 (income £20,000 or more). Each phase brings more of your clients into scope.

Qualifying income explained

Qualifying income is the gross income from self-employment plus gross income from UK property — combined. It is turnover, not taxable profit. A landlord earning £35,000 in rent with £20,000 in expenses still has qualifying income of £35,000. Use our threshold checker tool to help clients assess whether they are in scope.

Setting up agent authorisation for MTD

To submit quarterly updates and the final declaration on behalf of your clients, you need:

1. An agent services account — this is separate from your main Government Gateway login. Apply at gov.uk
2. Client authorisation for each client — each client must authorise you to act on their behalf for MTD for Income Tax specifically. Existing Self Assessment authorisation does not carry over
3. MTD-compatible accounting software for Making Tax Digital with multi-client capability — practice editions of Xero, QuickBooks, and Sage allow you to manage multiple clients from a single dashboard

The authorisation process is digital. You send an invitation link to your client, they log in with their Government Gateway credentials, and approve the connection. For a step-by-step walkthrough, see our guide to MTD agent authorisation.

Choosing software for your practice

The right software depends on your practice size and client mix. Key considerations:

Practice management platforms

Key features to look for

• Batch submission — can you submit quarterly updates for multiple clients in one session?
• Client onboarding — how easily can you send authorisation links and connect new clients?
• Bank feeds — does the software support automatic bank transaction imports for your clients?
• Self Assessment integration — can the same software handle the final declaration and Self Assessment filing?
• Deadline tracking — does the platform flag upcoming quarterly deadlines across your client base?

For a full comparison, see our MTD software comparison for Income Tax or use our interactive software comparison tool.

Your sole traders and landlords will need guidance on choosing the right accounting software for Making Tax Digital. Many clients currently file a paper tax return or use basic spreadsheets — the transition to digital record keeping requires hands-on support from their accountant. The key is to start the software setup and agent authorisation process well before 6 April 2026.

Building your MTD workflow

A practical quarterly workflow for an accounting practice:

Before the quarter ends

• Ensure clients are recording income and expenses in the software (or sending you the data)
• Set up automatic reminders to clients who have not entered transactions
• Reconcile bank feeds where available

After the quarter ends (within 30 days)

• Review each client’s income and expenses for the quarter
• Check for obvious errors or missing transactions
• Submit the quarterly update to HMRC via the software
• Send confirmation to the client

Year-end (by 31 January)

• Review the full year’s digital records
• Apply any reliefs, allowances, or adjustments
• Submit the final declaration to HMRC
• Confirm the tax liability with the client

Worked example: a small practice preparing for MTD

Communicating MTD to your clients

Many clients are unaware of the changes or confused about what they need to do. Practical steps:

1. Segment your client list by qualifying income — identify which phase each client falls into
2. Send a clear letter or email — explain what MTD is, when it affects them, and what you will do for them. Avoid jargon
3. Offer a software setup service — many clients will need help choosing and configuring software
4. Set expectations on quarterly submissions — explain that MTD requires ongoing record-keeping, not just an annual data dump
5. Discuss fees early — the additional quarterly work means additional fees. Be transparent about costs

The soft-landing period in 2026/27 means no penalty points for the first four late quarterly updates. Use this as reassurance, but do not present it as an excuse to delay preparation.

Common challenges for accounting practices

Clients who resist digital record-keeping

Some clients still use paper records or basic spreadsheets. For these clients, consider bridging software that connects their spreadsheet to HMRC, or offer to maintain their digital records as part of your service.

Multiple income sources

Clients with both self-employment and property income need to submit separate quarterly updates for each source. The software must handle multiple income types within a single submission. See our guide on MTD for multiple income sources.

Partnerships

MTD for partnerships has been deferred with no current mandation date. Do not prepare partnership clients for MTD until HMRC confirms a timeline.

Frequently asked questions

Do I need a separate agent services account for MTD?

Yes. MTD agent authorisation is managed through HMRC’s agent services account, which is separate from your existing Government Gateway login. If you already have an agent services account for MTD for VAT, you can use the same one for Income Tax.

Can I submit quarterly updates on behalf of all my clients?

Yes, provided each client has authorised you through the digital authorisation process. You can then submit their quarterly updates and final declaration through your practice software.

How should I price MTD services?

Most practices charge an additional £200–£500 per year per client, covering four quarterly reviews, one final declaration, and ongoing software support. The exact fee depends on the complexity of the client’s affairs and the amount of bookkeeping involved.

What if a client’s qualifying income fluctuates around the threshold?

Qualifying income is assessed each tax year. If a client’s income drops below the threshold, they can apply to opt out of MTD. However, if it rises again, they must re-enrol. It is generally simpler to stay enrolled once set up.

Are there any exemptions for my clients?

Yes. Clients who are digitally excluded (no internet access, disability preventing digital use), foster carers, or have a Power of Attorney in place may be exempt. See our full list of MTD exemptions and how to opt out.