Why Client Readiness Is the Biggest MTD IT Issue (and How Accountants Can Fix It) 

Making Tax Digital for Income Tax (MTD IT) is one of the most significant changes UK accountants have faced in a generation. While much of the industry focus has been on software, timelines, and HMRC requirements, a growing body of research and real-world experience points to one overriding challenge: 

client readiness. 

According to recent surveys by UK accounting bodies including ICAEW and ACCA, more than 40% of accountants say that over half of their affected clients are not digitally prepared for MTD IT. Estimates suggest that 30–40% of self-employed individuals and landlords still rely on paper records, handwritten notes, or basic spreadsheets. 

As April 2026 approaches, this gap between HMRC’s digital expectations and the reality of client behaviour is becoming the biggest practical risk for firms, not the technology itself. 

The good news? Client readiness can be improved. With the right approach, accountants can reduce friction, protect margins, and turn MTD IT into an opportunity rather than a burden. 

What Does “Client Readiness” Really Mean? 

Client readiness isn’t just about whether a client uses software. 

It includes: 

• How consistently they keep records 

• Whether they understand MTD IT obligations 

• Their confidence using digital tools 

• How responsive they are to deadlines and requests 

• How much support they expect from their accountant 

A client may own a smartphone and use online banking, yet still behave “non-digitally” when it comes to accounting; storing receipts in envelopes, sending spreadsheets once a year, or leaving everything until January. 

Under MTD IT, this behaviour creates friction. 

Why Client Readiness Is the Biggest MTD IT Challenge 

MTD IT requires affected clients to: 

• Keep digital records 

• Submit quarterly updates to HMRC 

• File a final end-of-year declaration 

• Use MTD-compatible software throughout the process 

For digitally confident clients, this is a natural evolution. For others, it represents a fundamental shift in how they manage their finances. 

HMRC’s own user research shows that digitally prepared businesses adapt faster, make fewer errors, and require less ongoing support, while paper-based clients experience significantly higher compliance friction. 

For accountants, this translates into real operational challenges: 

• Increased admin converting paper or manual records 

• Higher risk of errors and missed deadlines 

• More client chasing and follow-up 

• Unclear boundaries around extra work 

• Pressure on fees and profitability 

It’s no surprise that many firms now rank client readiness as their top MTD IT concern, above software selection or technical compliance. 

Who Are the Least Digitally Ready Clients? 

Non-digital clients are not a single group. Patterns seen across industry research and practice experience show that: 

Older clients (typically aged 55+) 

Are statistically more likely to rely on paper records or offline spreadsheets. This is often due to long-standing habits rather than inability, many simply don’t see the need to change something that “has always worked”. 

Micro-businesses and sole traders 

With low transaction volumes often feel digital tools are unnecessary or overkill. The perceived cost and effort outweigh the perceived benefit. 

Landlords 

Particularly those with one or two properties, frequently manage records manually because income feels infrequent and “simple”. 

Time-poor clients 

Who are digitally capable but disengaged. Accounting feels stressful, unfamiliar, or low priority, so it gets delayed. 

Understanding why clients resist digital change is critical. In most cases, it’s not unwillingness; it’s fear, confusion, or perceived complexity. 

The Biggest Mistake Firms Make: Treating All Clients the Same 

One of the most common pitfalls in MTD preparation is assuming there’s a single solution that works for every client. 

Research from ICAEW indicates that firms using segmented client approaches report smoother onboarding, lower support costs, and higher client satisfaction during compliance transitions. 

MTD success starts with segmentation, not software. 

Ask: 

• How digitally confident is this client? 

• How complex are their income sources? 

• How price-sensitive are they? 

• How involved do they want to be day-to-day? 

Once these questions are answered, the right workflow becomes much clearer. 

Practical Ways to Improve Client Readiness 

1. Start with Hybrid Workflows

For paper-heavy or spreadsheet-based clients, hybrid workflows are often the most effective first step. 

HMRC guidance explicitly allows bridging and transitional approaches, making them a compliant and practical option. Firms involved in early MTD pilots report faster onboarding and lower resistance when clients are allowed to transition gradually. 

Hybrid workflows should be viewed as stepping stones, not permanent compromises. 

2. Introduce Digital Change Gradually

For clients open to moving away from paper, simplicity is key. 

Rather than introducing full accounting systems immediately, start with: 

• Basic digital record keeping 

• Bank feeds 

• Mobile receipt capture 

• Simple dashboards 

Studies into digital adoption consistently show that small, incremental changes are far more likely to stick than large system overhauls introduced too quickly. 

Confidence builds through familiarity. 

3. Communicate Outcomes, Not Software

HMRC user research shows that clients engage far better when communication focuses on benefits, not technology. 

Effective messaging explains: 

• What MTD IT means for them 

• Why quarterly updates are not four tax bills 

• How digital records reduce last-minute stress 

• How digital storage protects against lost paperwork 

Short guides, checklists, and simple visuals consistently outperform long, jargon-heavy emails. 

4. Be Clear (and Confident) About Pricing

One of the biggest pain points around MTD IT is unpaid extra work. 

Industry benchmarking shows that firms who clearly price MTD onboarding and quarterly support are more profitable and experience fewer disputes during compliance transitions. 

Extra admin should be: 

• Defined 

• Priced 

• Explained upfront 

Many practices are introducing onboarding fees, tiered service packages, or revised engagement letters to reflect quarterly reporting realities. 

Clear boundaries protect both your team and your margins. 

Turning Client Readiness into an Opportunity 

While non-digital clients may feel like a risk today, they also represent a major opportunity. 

MTD IT provides a natural reason to: 

• Review client profitability 

• Improve record quality 

• Standardise workflows 

• Strengthen advisory relationships 

• Introduce more efficient systems 

Evidence from early adopters shows that clients who transition successfully become more engaged, organised, and easier to support long-term. 

How the Right Tools Make Client Readiness Easier 

Client readiness improves significantly when accountants use platforms designed for collaboration, visibility, and flexibility. 

Integrated systems like Capium allow firms to: 

• Offer different digital pathways per client 

• Centralise records, deadlines, and communication 

• Reduce manual re-keying and duplication 

• Support both simple and complex clients within one platform 

This flexibility is key to managing mixed client bases without overwhelming your team. 

Client readiness is the biggest practical challenge of MTD IT, but it doesn’t have to be the biggest risk. 

With: 

• Clear segmentation 

• Flexible workflows 

• Outcome-focused communication 

• Structured pricing 

• Supportive onboarding 

Accountants can meet MTD requirements without burning out teams or alienating clients. 

MTD IT isn’t just a compliance exercise. It’s a chance to modernise how your practice works, one client at a time. 

The firms that plan now will be the ones who feel calm, confident, and in control when April 2026 arrives.