MTD posts challenges and opportunities for UK accountants
The survey, which gauged accountants' perspectives on the digitalisation of tax and Self-Assessment, revealed that 81.70% of respondents view MTD as their primary concern for 2025.
Other notable challenges include tax changes (44.44%), AI adoption (38.56%), client servicing (33.33%), and recruitment (20.26%).
Despite these concerns, 79.08% of accountants also see MTD as a major opportunity.
The top five opportunities identified were MTD (79.08%), AI (46.41%), tax changes (46.41%), client servicing (41.83%), and new business acquisition (21.57%).
Accountants noted that MTD's requirement for more frequent communication will provide greater visibility into clients' businesses, enabling upselling, stronger relationships, and expanded advisory services.
However, preparedness remains a concern, with 34% of accountants stating they are not ready for MTD for income tax, set to take effect in April 2026 for sole traders and landlords with qualifying income from self-employment and property exceeding £50,000.
While previous MTD mandates in 2019 and 2022 saw more than 90% of businesses adequately prepare, 11.15% of agents still rely on the HMRC platform for filing returns, an option that will not be available for self-assessment returns above the £50,000 threshold in 2026.
HMRC figures highlight the benefits already being realised, with 45% of businesses reporting time savings of up to 40 hours per year, 40% noting improved operations and finances, and 20% crediting MTD with driving digital transformation.
The total estimated value of time saved ranges between £603m and £915m annually.
Key changes under MTD for Income Tax include mandatory digital record-keeping, the use of MTD-compatible software, and quarterly submissions of income and expense summaries to HMRC.
Accountants estimate that the initial £50,000 threshold will affect 20% of their clients, with the impact expected to grow significantly in April 2027 for those with qualifying income above £30,000 and in April 2028 for those above £20,000.
Accountants also view AI as a tool to streamline processes, improve client servicing, and attract new business.
The survey suggests that the shift to MTD is not solely about software or compliance but requires a cultural change in how tax and Self-Assessment are approached.
Early preparation, client education, and internal team alignment are seen as critical for accountancy firms to navigate and capitalise on this digital transition.
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