In a widely-anticipated move just before Christmas last year, HMRC announced that Making Tax Digital for income tax self-assessment (MTD for ITSA) is delayed again.

MTD for ITSA was previously set to become mandatory for self-employed individuals and landlords with an income of more than £10,000 from April 2024. 

Following the latest delay, the mandation date has been moved to April 2026, and will only apply over a £50,000 income threshold. It will extend to those with an income over £30,000 from April 2027. 

The news is frustrating for many of us – especially as it’s not the first time the scheme has been delayed. After spending the past year preparing clients for a 2024 deadline, committing time and resources to supporting them in their digital transition, it feels like the change we’ve all been waiting for has been kicked down the road.

Now is not the time to be complacent, though: MTD is still happening, and more importantly, digital accounting has the power to transform your clients’ businesses with timely, detailed data.

Communicate the changes

Most accountants will have already got the word out to their client since the delay was announced, letting them know what’s changed, and the new dates for mandation.

Following on from this, you could use the coming months to communicate with different types of clients and address their specific questions or concerns. 

You might already have segmented your client base and targeted your messaging as part of your previous MTD campaigns – with the new mandation thresholds in mind, you can review those groups of clients and speak to people differently depending on where they fall into the new schedule.

The delay should also give you some time to try different channels and approaches, and reach anyone you haven’t to date. As well as email campaigns, blog posts and direct communications, you could try social media, video content, webinars and more. 

With another couple of years before the rules take effect, you’ve got more time to experiment and see what works.

Keep up the motivation

One of the biggest challenges accountants now have to deal with as a result of the MTD delay is keeping their clients moving towards better digital accounting practices, despite the extra time.

A good way to do this is by focusing on the benefits instead of the threats. Even people who aren’t included in MTD can benefit from using digital tools to record their data throughout the year.

The sooner your clients can switch to online accounting software, the sooner they’ll benefit from up-to-date information, time-saving automations and close collaboration with you as their accountant. 

A constant view of cashflow and a better picture of their future performance will be especially helpful in the coming year, as businesses face continued economic challenges and the threat of recession.

As always, you should be addressing your clients’ concerns and explaining how software can help them, rather than simply listing its features.

Reflect and reprioritise

Another silver lining to the MTD delay is the breathing room it gives both you and your clients to reflect on your software setup. You can now think about the best way to implement digital accounting – not just the quickest.

Some business owners might have rushed to patch up their processes and put a quick fix in place in time for the scheme’s rollout, such as a simple filing tool or software to connect with their spreadsheets. They now have an opportunity to look at the range of accounting software available, not only for income tax reporting, but for other aspects of their finances.

For accountancy firms, too, there’s time to step back and assess your software priorities as a whole. What does your digital offering look like across different services? Do you have effective practice management systems in place to oversee your firm’s operations? Is the software you use accessible and connected, and are your team happy using it?

With those questions in mind, you can put together a plan for the next four to five years, and focus on providing the best possible MTD solution to your clients.

 

Our suite of integrated accounting and practice management software offers the complete solution for digital firms. Book a free trial to see what Capium can do for your practice.

 

Related Post

Leave a Reply

Your email address will not be published. Required fields are marked *

8 + 6 =

Hello there,
Are you already a Capium customer?

If you are already a Capium customer,
please click here to book an Training session instead.

accounting-capium

This will close in 0 seconds