Making Tax Digital sounds like a compliance headache, and for unprepared clients it will be. For a firm that gets ahead of it, it's mostly a communication job done early.
What is actually changing?
Making Tax Digital for Income Tax moves affected taxpayers from one annual return to keeping digital records and sending quarterly updates to HMRC through compatible software, followed by a final declaration. The exact thresholds and start dates are being phased in, so always confirm the current position on gov.uk before you advise.
Who does it affect first?
Broadly, self-employed people and landlords with qualifying income above the published threshold, with lower thresholds following in later phases. In practice, that means a chunk of most firms' client books — and the ones who keep records in a shoebox are the ones to contact first.
What do clients need in place?
Two things: digital records and compatible software. A spreadsheet on its own no longer meets the requirement once a client is in scope. The sooner clients are keeping records digitally and their transactions are flowing in automatically, the less painful the first quarterly update will be.
How to prepare without the panic
Segment your client list by who comes into scope and when. Send a short, plain-English note to each group explaining what's changing and the one thing they need to do next. Then get their bookkeeping onto digital records well before their first deadline, so the quarterly updates are a formality rather than a fire drill.
The firms that treat this as an early client-communication exercise — rather than a last-minute software scramble — will have the calmest year.
If you want your clients' records ready for MTD without the manual effort, book a demo and we'll show you how it fits together.