{"id":11793,"date":"2023-01-23T10:00:00","date_gmt":"2023-01-23T10:00:00","guid":{"rendered":"https:\/\/www.sage.com\/en-gb\/blog\/?p=11793"},"modified":"2026-01-06T13:19:03","modified_gmt":"2026-01-06T13:19:03","slug":"mtd-itsa-accountants-prepare-sole-trader-clients","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-gb\/blog\/mtd-itsa-accountants-prepare-sole-trader-clients\/","title":{"rendered":"Making Tax Digital for ITSA: How accountants can prepare sole trader clients"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-gb\/blog\/category\/strategy-legal-operations\/\" class=\"entry-header__link\">Strategy, Legal &amp; Operations<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tMaking Tax Digital for ITSA: How accountants can prepare sole trader clients\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2023-01-23T10:00:00+00:00\">23 January, 2023<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Making Tax Digital for ITSA: How accountants can prepare sole trader clients\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-gb\/blog\/mtd-itsa-accountants-prepare-sole-trader-clients\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-gb\/blog\/author\/keirthomasbryant\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2025\/06\/keir-short-hair-350x350.jpg\" class=\"entry-author__image\" alt=\"\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2025\/06\/keir-short-hair-350x350.jpg 350w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2025\/06\/keir-short-hair.jpg 760w\" sizes=\"auto, (max-width: 40px) 100vw, 40px\" \/>\t\t\t\t<span class=\"entry-author__name\">Keir Thomas-Bryant<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n<p>With Making Tax Digital for VAT in full swing, for accountants, attention is turning to the next phase of MTD: Making Tax Digital (MTD) for Income Tax Self Assessment. <\/p>\n\n\n\n<p>This is sometimes referred to as MTD for ITSA.<\/p>\n\n\n\n<p>The <a title=\"MTD for Income Tax Self Assessment: What accountants and clients need to do\" href=\"https:\/\/www.sage.com\/en-gb\/blog\/mtd-for-income-tax-accountants-need-to-know\/\" rel=\"noopener noreferrer\">rules are straightforward<\/a>, but it&#8217;s once again going to be the accountancy profession getting their noses dirty at the proverbial coalface in helping clients adapt\u2014especially millions of sole traders who are above the initial \u00a350,000 threshold from 2026, and \u00a330,00 from 2027.<\/p>\n\n\n\n<p>In this article, we highlight some considerations that might help kickstart your processes when it comes to supporting those individuals.<\/p>\n\n\n\n<p>Here&#8217;s what we cover:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"#why\">Why accountants should start preparing their sole trader clients now<\/a><\/li>\n\n\n\n<li><a href=\"#tips\">Tips to communicate the changes to sole traders<\/a><\/li>\n\n\n\n<li><a href=\"#mtd\">MTD for ITSA benefits for your sole trader clients<\/a><\/li>\n\n\n\n<li><a href=\"#final\">Final thoughts<\/a><\/li>\n<\/ul>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"#gate-0fffa372-27da-4c83-b370-078e6c62e153\">Download &#8220;The accountant&#8217;s guide to Making Tax Digital for Income Tax&#8221; here<\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"why\">Why accountants should start preparing their sole trader clients now<\/h2>\n\n\n\n<p>As far as most clients are concerned, MTD for ITSA has several fronts for which sole traders must prepare:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><a title=\"How an accountancy firm moved its clients to cloud accounting\" href=\"https:\/\/www.sage.com\/en-gb\/blog\/accountancy-firm-cloud-accounting\/\" target=\"_blank\" rel=\"noopener noreferrer\">Transitioning to accounting software<\/a>, if they haven&#8217;t already. Alternatively, sole traders might use some kind of <a href=\"https:\/\/www.sage.com\/en-gb\/blog\/glossary\/what-is-a-bridging-tool-or-bridging-software\/\">bridging solution<\/a> if they insist on using spreadsheets (while taking measures to be legally compliant with the <a title=\"What is an MTD digital link? Get ready for new Making Tax Digital guidelines from HMRC\" href=\"https:\/\/www.sage.com\/en-gb\/blog\/what-is-an-mtd-digital-link\/\" rel=\"noopener noreferrer\">digital linking rules<\/a>, of course\u2014remember that copy and pasting numbers into a spreadsheet from elsewhere will probably be legally prohibited).<\/li>\n\n\n\n<li>Switch to <a title=\"What is a digital record?\" href=\"https:\/\/www.sage.com\/en-gb\/blog\/glossary\/what-is-a-digital-record\/\" rel=\"noopener noreferrer\">digital record-keeping<\/a> for their income tax accounting relating to self-employment, including compliance within all processes connected to this (e.g. <a title=\"How accountants can use automation to overcome the data entry challenge\" href=\"https:\/\/www.sage.com\/en-gb\/blog\/data-entry-challenge-automation\/\" rel=\"noopener noreferrer\">data capture<\/a> from documents such as invoices or bills), again within the requirements of digital linking.<\/li>\n\n\n\n<li><a title=\"Basis period reform and Making Tax Digital: How accountants can help their clients\" href=\"https:\/\/www.sage.com\/en-gb\/blog\/basis-period-reform-making-tax-digital-accountants\/\" target=\"_blank\" rel=\"noopener noreferrer\">Basis period reform<\/a> for sole traders, for the minority that requires it. It could theoretically be necessary for a business to implement this for the tax year 2023\/24.<\/li>\n<\/ol>\n\n\n\n<p>Planning must start now because every component in the above list is going to demand time and resources.<\/p>\n\n\n\n<p>For most practices, the very first job will be to segment their client lists according to these criteria. That in itself will be time-consuming.<\/p>\n\n\n\n<p>Once that&#8217;s done, practices should dedicate resources around educating and implementing. And this will be a continual process up to and even beyond the start date of the <a href=\"https:\/\/www.sage.com\/en-gb\/blog\/mtd-for-income-tax-postponed\/\">first phase of MTD for ITSA in April 2026<\/a>.<\/p>\n\n\n\n<p>This situation is complicated by the following, which must be taken into account during any planning:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Some sole traders will also be landlords, so they may have to also use <a title=\"MTD for Income Tax: What landlords need to know about Making Tax Digital\" href=\"https:\/\/www.sage.com\/en-gb\/blog\/mtd-income-tax-landlords-need-to-know\/\" rel=\"noopener noreferrer\">MTD for ITSA for property income<\/a> even if their sole trader income is below \u00a350,000 (that is, their sole trader plus rental income is greater than \u00a350,000).<\/li>\n\n\n\n<li><\/li>\n\n\n\n<li>Basis period reform affects all sole traders, not just those above the inital \u00a350,000 threshold for MTD for ITSA, so the filtering for that particular task must be drawn from your entire sole trader client base.<\/li>\n\n\n\n<li>Those below the MTD for ITSA threshold may still contact you and require help when they learn of MTD for ITSA (e.g. from advertisements). Although the answer may be simple for these clients, it will still consume time and resources. In other words, the days following an HMRC mail-out may set your phones on fire!<\/li>\n<\/ul>\n\n\n\n<p>Ensure your clients understand the importance of adopting the compliance change sooner rather than later. Move now and the price stays the same, but move later and they&#8217;re likely to incur higher fees.<\/p>\n\n\n\n<p>Encourage your clients to take advantage of any pilot schemes, such as that available for MTD for ITSA.<\/p>\n\n\n\n<p>Remember that they will need compatible software, as will you if you wish to maximise your service offering for them.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"tips\">Tips to communicate the changes to sole traders<\/h2>\n\n\n\n<p>While talk of digitalisation in accountancy is nothing new, practices that are willing to embrace cutting-edge technologies are going to achieve efficiencies when it comes to communication.<\/p>\n\n\n\n<p>Without using these technologies, practices risk being overwhelmed.<\/p>\n\n\n\n<p>So, let&#8217;s take a look at a few suggestions\u2014starting with the more innovative way of driving engagement.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Instagram\/Facebook Live<\/h3>\n\n\n\n<p>Virtually all your clients will have social media accounts of some kind, and your practice will hopefully already have its own social media presence to connect with this.<\/p>\n\n\n\n<p>Facebook Live (also on Instagram in a broadly similar way) is simply a way of broadcasting live video, just like a news reporter on TV.<\/p>\n\n\n\n<p>Viewers are limited to commenting (and you can approve comments before they&#8217;re seen), but you also can share polls and display web links (e.g. to HMRC sites that explain more).<\/p>\n\n\n\n<p>You can live broadcast from a phone or computer, or use the Live Producer software for a more professional approach.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Videoconferencing\/webinars<\/h3>\n\n\n\n<p>It might no longer be cutting edge but using Zoom or Microsoft Teams to host an online webinar fits within many people&#8217;s comfort zones nowadays, following the enforced technical migration caused by the pandemic.<\/p>\n\n\n\n<p>Because these are essentially online meetings in all but name, invites can be scheduled within Zoom or Microsoft accounts and sent to clients, which can boost engagement.<\/p>\n\n\n\n<p>They can be interactive, and the webinar can be recorded too so that you can allow access at a later date, deriving further value from your work.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Newsletters<\/h3>\n\n\n\n<p>Via email or printed and posted, newsletters remain a key way to communicate with clients about all kinds of issues. They&#8217;re less straightforward than videoconferencing in today&#8217;s world, though, because, you&#8217;ll need to ensure you remain GDPR compliant.<\/p>\n\n\n\n<p>In other words, people usually must opt-in to receive emails or newsletters. But email newsletters in particular have had a resurgence recently, and people aren&#8217;t as resistant to them as they once were.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">And the rest&#8230;<\/h3>\n\n\n\n<p>The Pareto principle says 80% of results typically arise from 20% of the effort.<\/p>\n\n\n\n<p>In terms of general education for a practice, it&#8217;s the small things that often work best.<\/p>\n\n\n\n<p>Tack a mention of MTD for ITSA onto every incoming or outgoing client phone call, for example.<\/p>\n\n\n\n<p>Add a brief paragraph box to the invoices you send out.<\/p>\n\n\n\n<p>Have everybody add a mention of MTD for ITSA to their email signatures.<\/p>\n\n\n\n<p>Put a banner on your website mentioning it, and how you can help.<\/p>\n\n\n\n<p>Put this question out to your staff to see if you receive any innovative answers based on the peculiarities of your practice: How would they spread the word about MTD for ITSA?<\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"#gate-0fffa372-27da-4c83-b370-078e6c62e153\">Download &#8220;The accountant&#8217;s guide to Making Tax Digital for Income Tax&#8221; here<\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"mtd\">MTD for ITSA benefits for your sole trader clients<\/h2>\n\n\n\n<p>With any luck, many of your existing clients required to use MTD for ITSA will already use a cloud accounting solution. If so, there&#8217;s a good chance this will be MTD-ready in time for April 2026, although the client will need to register for MTD (or you can on their behalf), plus switch on the MTD functionality within the software.<\/p>\n\n\n\n<p>Remember that MTD for VAT and MTD for ITSA are two entirely separate considerations\u2014accounting software with MTD for VAT already activated won&#8217;t automatically be activated for MTD for ITSA.<\/p>\n\n\n\n<p>Those using older desktop-based software may need to seek an upgrade.<\/p>\n\n\n\n<p>Similarly, the upgrade path for those relying on spreadsheets may be a little bumpy, with a need to apply compatible bridging plugins for the spreadsheet app.<\/p>\n\n\n\n<p>For those who aren&#8217;t using software, you should emphasise the benefits of accounting software that you&#8217;ll already know about\u2014a 24\/7 view of cash flow, for example, so they always know where they stand.<\/p>\n\n\n\n<p>This way clients can spot problems coming, as well as see opportunities when they arise.<\/p>\n\n\n\n<p>But it&#8217;s important to emphasise newer technologies too.<\/p>\n\n\n\n<p>Automating bank reconciliation, for example, is transforming business admin by massively reducing the amount of time taken to match payments against invoices.<\/p>\n\n\n\n<p>Similarly, receipt capture means getting vital MTD-required data into the client&#8217;s accounting becomes a piece of cake\u2014just snap the receipt or invoice with a mobile phone straight after purchase or receipt of the goods.<\/p>\n\n\n\n<p>And don&#8217;t forget perhaps the biggest boon for any accountant\u2014linking client accounting to your own systems, so you can see their live financial data.<\/p>\n\n\n\n<p>This allows for you to create new value propositions around periodic check-ins, for example. This shows how MTD for ITSA is ultimately a business opportunity for practices.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"final\">Final thoughts<\/h2>\n\n\n\n<p>MTD for ITSA might feel like some time away.<\/p>\n\n\n\n<p>But as an accountant, you have to start planning immediately.<\/p>\n\n\n\n<p>Resources and budget needs to be allocated, and the sheer scale of the work must be quantified. This might feel like the early stages but you know from experience with MTD for VAT that key dates will be here before we know it.<\/p>\n\n\n\n<p>Moving forward, smart practices are already creating working parties that meet regularly and set goals so that milestones can be achieved.<\/p>\n\n\n\n<p><em>Editor&#8217;s note: This article was first published in June 2022 and has been updated for relevance.<\/em><\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">E-Book: The accountant&#8217;s guide to MTD for Income Tax<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p>Download this free interactive guide, written by experts, about developing your practice approach to Making Tax Digital for Income Tax.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-0fffa372-27da-4c83-b370-078e6c62e153\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download here<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1214\" height=\"810\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2024\/12\/MTD-accountants-1214x810.jpg\" class=\"single-cta__image\" alt=\"Women discussing Making Tax Digital\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2024\/12\/MTD-accountants-1214x810.jpg 1214w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n","protected":false},"excerpt":{"rendered":"<p>Getting sole trader clients ready for MTD for Income Tax Self Assessment needs to start now. Here are some tips to kickstart your processes.<\/p>\n","protected":false},"author":280,"featured_media":11422,"menu_order":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"footnotes":""},"categories":[9],"tags":[223,226,23,124,29,206,27],"business_type":[115],"lilypad":[],"context":[],"industry":[],"persona":[],"imagine_tag":[220,222,142,334],"coauthors":[369],"class_list":["post-11793","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-strategy-legal-operations","tag-accountant-accounting","tag-accountant-tax","tag-bookkeeping","tag-business-support","tag-mtd-accountants","tag-need-to-know","tag-tax","business_type-accountants"],"sage_meta":{"region":"en-gb","author_name":"Keir Thomas-Bryant","featured_image":"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2022\/04\/GettyImages-939019528.jpg","imagine_tags":{"220":"Accountant accounting","222":"Accountant tax","142":"Making Tax Digital for businesses","334":"Making tax digital for income tax"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice UK","distributor_original_site_url":"https:\/\/www.sage.com\/en-gb\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts\/11793","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/users\/280"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/comments?post=11793"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts\/11793\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/media\/11422"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/media?parent=11793"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/categories?post=11793"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/tags?post=11793"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/business_type?post=11793"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/lilypad?post=11793"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/context?post=11793"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/industry?post=11793"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/persona?post=11793"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/imagine_tag?post=11793"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/coauthors?post=11793"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}