Making Tax Digital for Income Tax has been years in the making. After consultations, pilots, delays, changing thresholds and months of preparation, the first mandatory quarterly update deadline has finally arrived. So, what have accountants and bookkeepers learned from getting clients ready? 

For many practices, the biggest challenge has not been submitting the quarterly update itself. Instead, the experience has highlighted the importance of client communication, digital record keeping, onboarding, software, internal processes and changing the way practices work with clients. 

HMRC says more than 864,000 sole traders and landlords within scope have reached the first MTD for Income Tax deadline, with qualifying income above £50,000. The first quarterly update covers the first three months of the 2026/27 tax year and must be submitted through MTD-compatible software.  

Here are seven of the biggest lessons emerging from the first phase of MTD for Income Tax. 

1. MTD is a workflow change, not simply another tax submission

Perhaps the clearest lesson is that MTD for Income Tax is about much more than submitting four updates a year. 

For years, many sole traders and landlords have operated around an annual tax cycle: gather records, prepare accounts, submit the return and move on. 

MTD changes that rhythm. 

Digital records need to be maintained throughout the year, information needs to be available more regularly and clients need to engage with their finances on an ongoing basis. 

This means practices need to think beyond “How do we submit the quarterly update?” and ask: 

“How will we manage this client throughout the year?” 

Firms that treat MTD as a change to their overall workflow — rather than simply another compliance obligation — are likely to find the transition easier to manage. 

2. Client onboarding can be more important than the submission itself

One of the strongest lessons from the preparation period has been the importance of getting the basics right early. 

Before an agent can submit a client’s quarterly update, several steps need to be completed, including adding the appropriate client authorisation to the Agent Services Account, signing the client up for MTD and connecting the chosen software to HMRC.  

HMRC says that, on average, signing up a client takes less than four minutes. But that is only one part of the process.  

Practices also need to establish: 

• Which clients are actually in scope  
• Which income sources need to be included  
• Which software and workflow are appropriate  
• Whether digital records are ready  
• Who is responsible for maintaining those records  
• How and when information will be provided to the practice  

The lesson? Don’t treat onboarding as an administrative task to complete just before the deadline. 

It is the foundation for everything that follows. 

3. One MTD workflow does not work for every client

Another important lesson is that practices need flexibility. 

A landlord with several properties does not necessarily have the same requirements as a sole trader who sends invoices, receives card payments and has hundreds of transactions each month. 

Some clients are already comfortable with cloud bookkeeping. Others may have relied on spreadsheets, paper records or banking apps for years. 

HMRC’s own agent feedback reflects this variety. Accountants have reported that some traditionally paper-based clients are now being encouraged to digitise, while others are benefiting from more regular financial information and clearer visibility of their potential tax position.  

The takeaway is simple: 

Choose the workflow around the client, rather than forcing every client into the same process. 

That could mean cloud bookkeeping for one client, a bridging solution for another, or a more automated digital record-keeping workflow for a third. 

4. Client communication is a critical part of MTD compliance

Technology can make quarterly reporting easier, but it cannot make clients send their records on time. 

This has arguably been one of the biggest practical challenges for practices. 

Clients who are accustomed to handing everything over once a year now need to think differently about record keeping. 

They need to understand: 

• What information they need to record  
• How often they need to update it  
• What their accountant needs from them  
• Why accurate digital records matter  
• When information needs to be provided  
• What happens if records are incomplete  

HMRC has also highlighted positive experiences from agents whose clients are seeing clearer information about cash flow, business performance and potential tax liabilities as a result of more regular reporting.  

So MTD should not necessarily be presented to clients as “more admin.” 

Done well, it can become a more useful and regular conversation about their business. 

5. Digital record keeping needs to happen throughout the year

The first deadline has reinforced a fundamental MTD principle: you cannot leave digital record keeping until the deadline. 

HMRC guidance says digital records should be created as close to the transaction date as possible. If someone signs up partway through the tax year, they may also need to catch up their records from the beginning of the relevant period.  

Quarterly updates are generated from those digital records. They are summaries of income and expenses — they are not tax returns, and accounting or tax adjustments do not need to be made before sending the update.  

This creates an important operational lesson for practices: 

The quality of the quarterly submission is largely determined by the quality of the records behind it. 

The deadline should therefore be the end point of a process, not the point at which the process begins. 

6. Software needs to support the practice — not just the submission

The first MTD deadline has also highlighted that choosing software based purely on whether it can technically submit to HMRC is not enough. 

The right MTD software should fit the way the practice and its clients actually work. 

Consider: 

• How clients provide information  
• Digital record keeping  
• Bank feeds and transaction imports  
• Receipt and expense capture  
• Multiple income sources  
• Client approvals  
• Quarterly update preparation  
• HMRC connectivity  
• Visibility of submission status  
• How easily the practice can manage multiple clients  

HMRC now lists more than 100 compatible software products and recommends that agents consider their needs when choosing a solution.  

The lesson from the first phase is that MTD software is becoming part of the practice workflow, rather than simply a filing tool. 

7. The first deadline is the start of a new routine — not the finish line

Perhaps the biggest lesson of all is that 7 August is not the end of MTD preparation. 

The next quarterly update deadline is 7 November 2026, followed by 7 February 2027 and 7 May 2027.  

That means practices now have an opportunity to review what worked during the first quarter and improve their processes before the next update. 

Ask: 

• Which clients provided records late?  
• Which clients needed the most support?  
• Where did the practice spend the most time?  
• Which workflows worked well?  
• Where did data need manual intervention?  
• Which clients need additional training?  
• Could any processes be automated?  
• Are fees still appropriate for the increased frequency of work?  

This final question is particularly important. 

Moving from an annual compliance cycle to more regular reporting creates additional client touchpoints. Many practices have therefore been reviewing their pricing and considering monthly or broader advisory packages.  

The first quarter provides valuable data that can help practices build a more sustainable MTD service. 

What happens next? 

The first MTD for Income Tax quarterly deadline represents a significant milestone, but it is only the beginning of the new reporting cycle. 

The good news is that the first year provides practices with an opportunity to learn and refine their processes. HMRC has confirmed that no penalty points will be issued for late quarterly updates during the 2026/27 tax year, although taxpayers still need to submit their updates and other penalties, including those relating to late tax returns or payments, continue to apply.  

From the second year onwards, the points-based penalty regime for missed quarterly updates will apply. Four points result in a £200 penalty, with further missed deadlines potentially generating additional penalties.  

So the objective should not simply be: 

“How did we get through 7 August?” 

It should be: 

“How can we make the next quarterly update easier, faster and more valuable for both our practice and our clients?” 

MTD is a practice transformation 

After years of preparation, the first MTD for Income Tax deadline has shown that the technology and legislation are only part of the challenge. 

The practices best placed to manage MTD successfully will be those that combine the right software, efficient workflows, strong client communication and consistent digital record keeping. 

The first quarterly update is a milestone. The real opportunity is to use what has been learned to build a more efficient, proactive and scalable way of working. 

Capium’s MTD for Income Tax solution is designed to help practices manage different client needs, from digital record keeping and onboarding through to quarterly updates and ongoing compliance. 

Discover how Capium can help your practice simplify MTD for Income Tax and build a more efficient digital workflow:

Book a demo today.

The post MTD for Income Tax: 7 Lessons Accountants Have Learned from the First Quarterly Deadline appeared first on capium.

Making Tax Digital for Income Tax is no longer a future project. 

Across the UK, accounting firms are now actively signing clients up, testing workflows, onboarding landlords and sole traders, and preparing for the first quarterly submission deadline on 7 August. 

While much of the conversation around MTD has focused on legislation and compliance, the experiences of early adopters are revealing a different reality. 

The biggest challenges aren’t necessarily tax-related. 

Instead, firms are finding that success depends on client engagement, internal processes, software choices, and the ability to adapt practice workflows to a new way of working. 

The first wave of MTD implementation is providing valuable lessons for every accountant and bookkeeper still preparing for the transition. 

MTD Is More About Practice Operations Than Tax 

One of the clearest messages emerging from firms already working with MTD clients is that the tax itself hasn’t changed dramatically. 

What has changed is how information is collected, managed and reported. 

For years, many sole traders and landlords have operated on an annual cycle. Records are gathered at year-end, accounts are prepared, and tax returns are submitted. 

MTD introduces a very different model. 

Practices now need systems that support ongoing digital record keeping, regular client engagement and quarterly reporting throughout the year. 

For many firms, this represents a significant operational shift rather than a technical tax challenge. 

Those treating MTD as a workflow transformation rather than simply another filing obligation are generally finding the transition easier to manage. 

Sign-Up Is Easier Than Many Expected 

When MTD was first announced, many practices anticipated lengthy and complex onboarding procedures. 

The reality has been more encouraging. 

Firms involved in the first phase report that HMRC’s sign-up process broadly reflects the guidance already published. 

Where client information has been prepared in advance, registrations can often be completed relatively quickly. 

However, the most common issues tend to arise when firms assume clients have not already taken action themselves. 

Some accountants are discovering that clients have registered independently after receiving communications directly from HMRC. 

While usually well-intentioned, this can create duplication, confusion and additional administration for practices trying to manage registrations centrally. 

The lesson is simple: communication with clients remains just as important as the technology itself. 

Software Choice Matters More Than Ever 

Another key lesson is that there is no single MTD solution that suits every client. 

Different businesses operate in different ways. 

A landlord with a handful of rental properties has very different requirements from a tradesperson issuing invoices, managing expenses and chasing payments. 

Similarly, some clients are comfortable using cloud accounting software, while others remain reliant on spreadsheets or simple banking apps. 

Practices that are succeeding with MTD are often taking a more flexible approach, matching software and workflows to the client’s needs rather than forcing every client into the same process. 

This is where having multiple workflow options becomes increasingly valuable. 

The Real Challenge Is Still Ahead 

While onboarding clients and choosing software are important milestones, many practitioners believe the biggest challenge has yet to arrive. 

The first quarterly submissions. 

For years, many clients have been conditioned to think about tax once a year. 

MTD requires a change in behaviour. 

Clients need to provide information more regularly, maintain better records, and engage with their finances throughout the year rather than at the last minute. 

The technology can facilitate submissions, but it cannot automatically change client habits. 

As a result, firms are investing considerable time in educating clients, setting expectations and building processes that encourage timely record keeping. 

Pricing Models Are Still Evolving 

MTD is also forcing practices to rethink how they price their services. 

Moving from an annual compliance cycle to quarterly reporting creates additional touchpoints throughout the year. 

Many firms are reviewing whether traditional fee structures still reflect the work involved. 

Some are introducing monthly service packages. Others are building MTD compliance into broader advisory offerings. 

The industry is still experimenting, but one thing is becoming clear: firms that create efficient workflows are likely to be in a stronger position to protect profitability as MTD requirements expand. 

August Will Be the First Real Test 

The first quarterly reporting deadline on 7 August will provide the clearest indication yet of how prepared firms and clients really are. 

Practices that have already identified affected clients, selected appropriate workflows and established digital record-keeping processes will be in a much stronger position. 

Those that delay may find themselves facing a last-minute rush to onboard clients, answer questions and resolve avoidable issues. 

The firms that emerge strongest from the first phase of MTD are unlikely to be those with the most sophisticated technology alone. 

They will be the firms that have successfully combined technology, process and client communication into a repeatable workflow. 

Start Preparing for the Next Phase of MTD

If the first wave of MTD has taught the profession anything, it’s that Making Tax Digital is not simply a compliance project. 

It is a practice transformation project. 

The technology is important. The legislation matters. But the real differentiator will be how effectively firms adapt their processes and help clients embrace a more regular and digital approach to managing their tax affairs. 

With the first quarterly deadline now approaching, the time for planning is rapidly giving way to the time for action. 

The post Five MTD Lessons Every Accountancy Practice Should Learn Before August appeared first on capium.

Are you confident you know which clients will be affected by the next phase of Making Tax Digital for Income Tax? 

Have you identified how partnerships, landlords, and clients with multiple income sources will fit into your MTD strategy? 

Do you have the right workflows in place to manage quarterly submissions efficiently without creating more work for your team? 

If you’re still answering these questions, you’re not alone. 

With MTD for Income Tax now underway and further changes on the horizon, many accountancy practices are moving beyond awareness and into implementation. The challenge is no longer understanding that MTD is coming. The challenge is preparing every affected client and creating scalable processes that work in practice. 

That’s why Capium is partnering with HMRC for a special live webinar designed to help firms understand the latest developments and turn regulatory requirements into practical workflows. 

Hear Directly From HMRC 

One of the biggest challenges for practices is separating fact from speculation. 

During this live session, you’ll hear directly from HMRC about the latest MTD developments, upcoming timelines, and what firms should be focusing on now. 

We’ll discuss: 

• The latest MTD updates and deadlines  
• Who will be affected next  
• New requirements for partnerships  
• Property income considerations  
• What practices should be doing now to prepare  

If you’re advising sole traders, landlords, or clients with multiple income streams, this session will provide valuable clarity on what’s coming next. 

Turning HMRC Guidance Into Practical Workflows 

Understanding the rules is only part of the challenge. 

The bigger question is: 

How do you manage MTD efficiently across different client types? 

Not every client has the same needs. 

Some will require bridging solutions. Others may need full digital record keeping. Some will have property income. Others will have multiple businesses or mixed income sources. 

During the webinar, Capium will demonstrate how firms can implement practical MTD workflows that support different client journeys while reducing unnecessary administration. 

You’ll see how Capium’s HMRC-recognised platform helps practices: 

✔ Maintain digital records 

✔ Manage quarterly submissions 

✔ Support landlords and sole traders 

✔ Handle multiple income sources 

✔ Simplify compliance processes 

✔ Reduce manual work across the practice 

Preparing for the Next Phase of MTD 

The firms that succeed with MTD won’t be the ones that wait until deadlines arrive. 

They’ll be the firms that identify affected clients early, choose the right workflows, and build efficient processes before reporting pressures increase. 

Whether you’re already using Capium or still reviewing your MTD strategy, this webinar will provide practical guidance that you can apply immediately. 

Live Q&A With HMRC and Capium 

You’ll also have the opportunity to ask questions directly to both HMRC and the Capium team. 

Whether your questions relate to compliance requirements, client onboarding, workflow selection, partnerships, property income, or reporting obligations, this is your chance to get answers from the people closest to the changes. 

Join Us Live 

HMRC & Capium: From HMRC Guidance to MTD Workflows – Preparing Every Client for Making Tax Digital 

📅 Tuesday 23 June 2026
🕚 11:00am BST
🎥 Live Webinar + Q&A 

You’ll Learn: 

✔ Latest HMRC updates and timelines 

✔ Who is affected next and how to prepare clients 

✔ New partnership and property income requirements 

✔ Practical MTD workflows and compliance strategies 

✔ How Capium helps streamline MTD submissions and reduce admin 

✔ Live Q&A with HMRC and Capium experts 

Thousands of practices are already reviewing their MTD strategy. 

Make sure yours is ready for the next phase of MTD. Register today and hear directly from HMRC and Capium on what happens next.

The post HMRC & Capium: MTD Is Live – Is Your Practice Ready for What’s Next?  appeared first on capium.

The countdown is on. 

With the first Making Tax Digital for Income Tax (MTD IT) reporting deadline approaching, many practices are still deciding how they will onboard clients, manage quarterly submissions, and handle digital record keeping. But as the deadline gets closer, one thing is becoming clear: firms that prepare early will be in a far stronger position than those that leave it until the last minute. 

The challenge isn’t simply understanding the legislation. It’s creating practical workflows that work across different client types, income sources, and levels of digital readiness. 

MTD IT Is No Longer a Future Problem 

For years, MTD IT felt like something that was always on the horizon. Now it’s here. 

Practices need to identify affected clients, establish digital records, choose the right reporting workflow, and prepare for quarterly submissions. For firms managing landlords, sole traders, mixed-income clients, and spreadsheet users, the complexity can quickly add up. 

The question is no longer “What is MTD IT?” 

It’s “How do we implement it efficiently?” 

Not Every Client Needs the Same MTD Approach 

One of the biggest mistakes practices can make is assuming every client should follow the same MTD journey. 

Some clients may be best suited to a bridging solution. Others may benefit from a fully integrated bookkeeping workflow. Some will require a combination approach depending on their income sources and existing processes. 

Understanding which workflow fits which client can save significant time, reduce onboarding friction, and help practices avoid unnecessary complexity later. 

Avoid a Last-Minute Rush 

Many firms are already reviewing their client bases and building MTD-ready workflows. 

Those that delay risk facing: 

• Last-minute onboarding pressures  
• Unauthorised clients close to submission deadlines  
• Confusion around landlord and sole trader structures  
• Increased manual work  
• Greater risk of reporting errors  

The earlier workflows are established, the easier quarterly reporting becomes. 

Join Our Live MTD IT Webinar 

To help practices prepare, the Capium team is hosting a practical live webinar: 

MTD IT Is Here: Stop Waiting. Start Preparing. 

Your Competitors Are Prepared – Are You? 

During this session, we’ll cover: 

✔ The latest MTD IT updates and workflow changes 

✔ How to choose the right workflow for different client types 

✔ Live demonstrations of the Capium MTD IT module 

✔ Digital record-keeping workflows 

✔ Managing landlords, sole traders, and multiple income sources 

✔ Preparing for quarterly submissions 

✔ Common mistakes to avoid 

✔ Live Q&A with the Capium team 

Whether you’re already using Capium or still deciding how to approach MTD IT, this session will give you practical guidance and real-world examples to help you prepare with confidence. 

The Best Time to Start Was Yesterday. The Next Best Time Is Now. 

MTD IT preparation doesn’t need to be overwhelming. But it does require action. 

The firms that succeed will be those that start planning now, not when submission deadlines are just around the corner. 

Join us on Wednesday at 11am and discover how to build the right MTD workflow for every client before the pressure really begins.

The post Why Waiting for MTD IT Could Be Your Biggest Mistake This Year appeared first on capium.