Your Accountant Might Not Be Ready Either: 42% of Firms Are Behind

It's not just taxpayers who are behind

A survey by IRIS Software Group found that 42% of UK accountancy firms weren't fully prepared for Making Tax Digital. A separate Accountex survey found 81.7% of accountants see MTD as their biggest challenge.

If nearly half of professional accountants are struggling to get ready, it's no wonder individual taxpayers are finding it overwhelming.

But here's the thing: this isn't just your accountant's problem. It's yours. If your accountant hasn't brought up MTD with you and you're in scope, you need to start the conversation.

Why some accountants are lagging

Scale. An accountant with 200 clients who are in scope for MTD needs to migrate all of them to compatible software, set up quarterly workflows, and potentially change their entire practice model. That's a massive operational shift.

Software decisions. Many firms are still evaluating which MTD software to standardise on. Do they put everyone on Xero? QuickBooks? Their own platform? Each choice has implications for training, pricing, and client experience.

Pricing. Under the old system, many accountants charged a flat annual fee to prepare and file one tax return. Under MTD, they're potentially involved four times a year plus the final declaration. That means updated engagement letters and pricing conversations with every client.

Training. Some smaller practices are run by experienced accountants who know tax law inside out but aren't naturally tech-forward. The switch to digital workflows is a bigger adjustment for them than for a cloud-native firm.

What this means for you

If your accountant is on top of things, they'll have already contacted you about MTD, recommended software, and outlined how your working relationship will change. If they haven't, it's worth asking.

Questions to ask your accountant

"Have you tested your MTD software?" You want to know they've actually submitted test quarterly updates, not just bought a licence. HMRC ran a pilot that accountants could participate in. Those who did will be in much better shape.

"What software do you want me to use?" Some accountants are flexible. Others have a strong preference because it integrates with their practice management tools. If they're asking you to use something specific, find out why and whether there's a cost involved.

"Who submits the quarterly updates?" Clarify whether you're expected to submit each quarter yourself or whether your accountant will do it. Both arrangements work, but you need to know which one applies.

"Are my records being kept digitally?" If your accountant has been keeping paper files or desktop-only records, those need to move to a cloud-based or MTD-compatible system.

"Will your fees change?" This is the uncomfortable but necessary question. Quarterly involvement is more work. Some accountants are absorbing the extra cost. Others are increasing fees. Better to know now.

What if you don't have an accountant?

Plenty of people file their own tax returns and plan to handle MTD themselves too. That's absolutely fine. MTD software is designed for non-accountants.

If your tax affairs are simple (one source of self-employment or rental income, standard expenses, no complicated reliefs), you can manage MTD without professional help. Pick your software, keep your records, file your updates.

Where an accountant adds value is for more complex situations: multiple income sources, capital allowances, tax planning, or if you simply don't want to deal with it.

Don't assume they've got it covered

If your accountant hasn't brought up MTD with you by now, that's a red flag. Ask the questions. And if you're not getting clear answers, shop around. Plenty of firms have been running MTD pilot submissions for months and have the process nailed. That peace of mind is worth switching for.

If you're considering going it alone, start with our guide for self-employed or guide for landlords depending on your situation.