Image: “HMRC” by Steven Vacher licensed under CC BY-NC-ND 2.0.
At a glance
- MTD ITSA begins in April 2026 for those with income over £50,000.
- HMRC has a testing programme to help accountants and clients prepare for the change.
- The IFA urges members to join the test to understand processes and set prices.
In April 2026, Making Tax Digital for income tax (MTD ITSA) is due to take effect for sole traders and landlords with qualifying income above £50,000.
HMRC has launched an MTD testing programme for taxpayers. It offers extra support and protection from penalties for errors ahead of the April 2026 deadline. The scheme aims to make the transition smoother for an estimated 864,000 UK taxpayers who will be required to participate.
The testing programme has had a relatively slow start, with the latest figures showing just 2,037 successful submissions between April and July.
But Tim Pinkney, director of professional standards at the Institute of Financial Accountants (IFA), recommends members consider enrolling clients in this testing programme now. His argument: IFA members need to understand MTD in detail before it happens.
“It’s something that’s going to impact nearly all our members, and we want them to be at the forefront of it,” he explains.
IFA promotes forward planning
Pinkney reports IFA members are questioning him on MTD right now: How much work will this involve? What software do I need? How will I get my clients on board? What should I charge? And he has been working through his advice to members to make the path to MTD implementation easier.
Pinkney recommends a starting point for accountants embarking on MTD: choose the right clients for the programme. Long-standing engaged clients are a good option, he says. It’s also worth discussing the process with some clients who find digital technology tougher to work with. Assess the information they hold, the services they use, their record-keeping processes, and the digital records they already maintain.
The next step is working out pricing, Pinkney says. This relies on understanding the work involved in setting up for MTD ITSA. And joining the testing programme gives firms a commercial edge: they gain extra time to determine what their costs will be, and can then set prices accordingly.
The key when pricing is to show your working, says Pinkney. “Some people will be just plucking a number out of the air, not based on anything. Go into MTD ITSA with your eyes open and be informed to make the right decisions.”
Choose the right software
Ermal Krutani is a partner at accounting and business advice firm Xeinadin who has used the testing programme to submit for two clients. IFA members should choose their software carefully, he advises; not all providers are ready for MTD’s arrival.
Krutani recommends testing three or four providers initially and negotiating lower-cost licences to start with. Ultimately, he advises, your aim should be to have all clients on a single platform for consistency and easier support across the firm.
This process, says Ermal, will not only prepare accountants for MTD ITSA but also improve their businesses for the technological future. “We should embrace it, not fight it,” he argues.
Meanwhile, Andrew Coombs, owner of Kings Oak Accountancy, aims to combine tools to give clients access to free business banking and accounting software. “This could cover accountants’ fees straight away,” he says.
Take the Scouts approach
MTD ITSA has been plagued by delays from its beginning. For the IFA’s Tim Pinkney, HMRC’s messaging is clear: now it really is happening. “It was a strong message at our conference. It’s a strong message at Accountex. It’s a strong message in every webinar.”
Some firms are still taking a “wait and see” approach. Robin Murray, partner at RJM Accountants, has chosen not to join the testing programme. He worries that MTD still “might not happen”, and adds that MTD ITSA will only apply to a few of his clients.
Other accountants have signed up for testing, but are hesitant about its efficacy. Bill McGregor, founder and principal of BMG Accountants, praises the testing programme for giving him and his clients early insight into how the system will work. but still worries about issues like software compatibility and the system’s handling of real-life complexities.
For Pinkney, these possible problems pale against the benefits of joining the testing programme. “Staying ahead keeps you informed and positions you to give the best advice,” he says.
When Pinkney was in practice, he constantly focused on being at the digital forefront so that he could properly advise clients. Now he warns that accountants that don’t embrace the change could be left uncertain of its requirements – and worse, unable to advise clients properly. “Have that discussion with your clients, make them aware, and don’t leave it until the last minute.”
Tim’s message echoes the Scouts’ motto: “Be prepared”.
If you’re looking for more information, Lenny Barry is national service manager at HMRC. He will be providing an update on MTD ITSA at the IFA’s next regional meeting at the Northeastern University on 15 October.
HMRC is also holding a number of webinars to help accountants who need to help clients sign up to the testing programme.
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