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How will MTD impact your practice? Use our workload estimator to find out

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How will MTD impact your practice? Use our workload estimator to find out

How will MTD impact your practice? Use our workload estimator to find out

Making Tax Digital is the biggest shake up in business taxes for a generation.

For accountants, it offers increased revenue opportunities – but also a potentially increased workload.

There are new HMRC reporting regimes for clients, for example, where none existed previously.

More landlords are likely to need help working within the confines of MTD for Income Tax Self Assessment (MTD for ITSA) too.

Introducing the MTD workload estimator

To find out how your workload might change, accountants and other tax professionals can use our interactive workload estimator. This allows you to get ahead of the work required, and so ensure you’re MTD ready.

The interactive tool will tell you how many reports, returns and other submissions you’ll have to make in:

  • April 2022 when MTD for VAT applies to all VAT-registered clients, regardless of whether or not their turnover passes the £85,000 threshold.
  • April 2024, when MTD for ITSA begins for sole traders and/or landlords with income above £10,000
  • April 2025, when MTD for ITSA begins for general partnerships that have income above £10,000.

All you have to do is input a rough count of the number of clients you have in each category. You’ll then get an instant summary of the total number of reports and submissions required. Also included within the tool are help sections on the basics of MTD for VAT, and MTD for ITSA.

Our interactive tool will be updated if guidance changes from HMRC.

The figures may prove surprising.

Even a smaller practice could find its workload increasing because of MTD.

For example, a practice with 40 VAT clients with quarterly reporting requirements and 50 Self Assessment clients will, as of April 2024, potentially need to assist clients with 460 reports or submissions for MTD within a 12-month period – up from around 150 to 200 right now.

 

New ways of working with clients

The extra workload might sound significant, but software will let you automate workflows for many reports and submissions. Using it will also enable greater collaboration across your practice and client base. It will ensure you can help your clients be as compliant as possible within the scope of MTD.

Furthermore, increased client touchpoints across the year provides additional opportunities to sell advisory services and develop new client service offerings.

Home-based businesses, for example, may have minimal capital overhead or expenditure yet achieve high turnovers. They may be looking for an outsourced finance manager to become a regular part of their processes.

Can you or your team provide that capacity?

Communication with clients must begin now to ensure there are no shocks or surprises when it comes to MTD. Consider also adding in a discussion about the basis period reform that’s happening in 2023/24 and that may have equal impact on business accounting.

Similarly, within your practice, processes need to be reviewed to ensure there’s the capacity to cover MTD requirements.

Think outside the box, too. There may need to be a capacity to provide software training for clients, for example.

Final thoughts

It’s never too late to start thinking about MTD’s impact on your practice.

Lessons can be learned from MTD for VAT back in 2019, and plans made so the impending April 2022, April 2024 and April 2025 dates don’t come as too much of a surprise – for either your practice or your clients.

Making Tax Digital: A practice survival guide

Need support with Making Tax Digital, for your clients and your practice? This free guide will help you get ready for MTD for VAT, Income Tax Self Assessment and Corporation Tax.

Download your free guide

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