Making Tax Digital for Income Tax (MTD IT) is approaching rapidly, with April 2026 set as the rollout date. While this might seem far away, early preparation is key to reducing last-minute stress, ensuring compliance, and building client confidence. In this post, we’ll dive into practical steps for preparing for MTD IT, explore key insights from our recent webinar, and share data-backed strategies for success.

Choosing the Right Software for MTD IT

Selecting the best bookkeeping software is a cornerstone of MTD IT readiness. During our recent webinar, we asked participants about their software preferences, and the results were clear:

• 49.5% plan to use Xero, making it the most popular choice.
• 16.2% prefer QuickBooks, a strong contender with its user-friendly interface.
• 8.1% opt for FreeAgent, a favourite among smaller firms.
• A notable 19.2% intend to use a combination of tools, reflecting the growing complexity of practice management.
• 2% chose Sage
• 5.1% are planned to use “Other” software solutions.

Why does this matter?
Your choice of software should go beyond compliance. Look for tools that streamline your workflows, integrate seamlessly with existing systems, and provide scalability as your firm grows. While Xero leads the pack, evaluating solutions like FreeAgent, QuickBooks, and multi-platform combinations may be the right move for specific client needs.

Boosting Confidence with Knowledge

Our webinar revealed a dramatic shift in confidence among attendees. Initially, 63.3% of participants described themselves as “Unconfident” about MTD IT, with only 3.3% feeling “Very confident.” After an hour of practical guidance, these numbers flipped:

• 79.9% now felt “Confident.”
• 13.7% reported feeling “Very confident.”

This transformation highlights the importance of education. By breaking down MTD IT into manageable steps and addressing common concerns, accounting professionals can take control of their preparation and guide their clients effectively.

How Much Should You Charge for MTD IT Services?

Determining the right fee structure for quarterly MTD filings is a challenge many firms face. During the webinar, we polled attendees on their pricing strategies:

• 42.1% plan to charge between £26-£50 per filing.
• 25.6% aim for £51-£75.
• A smaller group (6%) will charge £76-£100
• 20.3% intend to keep costs low, charging just £1-£25 per filing.

What’s the right price for your firm?
Your pricing should reflect the complexity of the services you offer, the software costs involved, and the value you bring to clients. Importantly, communicate your pricing strategy early so clients understand the changes and see the value in your expertise.

Practical Steps to Get Ready for MTD IT

Preparing for MTD IT might feel daunting, but breaking it down into clear steps can make all the difference. Here’s how to get started:

1. Categorise Your Clients

Begin by sorting your client base into three categories:

• Those with £50,000+ turnover (starting MTD IT in 2026).
• Those with £30,000+ turnover (starting MTD IT in 2027).
• Exempt clients (under £30,000 turnover).

Create custom fields in your practice management software to track these details, enabling bulk emails and targeted communication later.

2. Update Your Services

Introduce a Quarterly Income Return service alongside your annual return. Ensure pricing reflects the additional workload and system updates required for compliance.

3. Client Communication

Use email templates to inform clients of the upcoming changes. Start with general awareness emails, then move into personalised updates for compliant and non-compliant clients. For non-compliant clients, offer solutions like FreeAgent bundled with a free banking provider to make the transition easier.

4. Leverage Automation

Invest in automation tools to reduce admin time. Engager allows you to schedule reminders, generate proposals, and manage tasks seamlessly. With the right tools, handling quarterly filings can feel as easy as managing VAT submissions.

What’s Next for the Accounting Industry?

The move to MTD IT signals a broader trend towards automation, real-time data, and proactive financial management. Here’s what we anticipate:

• Increased reliance on practice management tools to handle growing workloads.
• A shift towards collaborative, advisory-based relationships with clients.
• Greater adoption of AI-powered solutions to streamline workflows and deliver insights.

Firms that embrace these changes early will not only thrive under MTD IT but also future-proof their services for years to come.

Watch the Recording & Attend LABS25

Getting ready for MTD IT isn’t just about compliance. It’s about transforming how you operate, communicate, and add value to your clients. Whether it’s selecting the right software, restructuring your services, or educating your team and clients, every step you take now will pay dividends when April 2026 arrives.

If you’d like to watch the full webinar recording, we’ve embedded it below for easy access:

Ready to prepare for MTD IT? Join our next live event, Engager Labs, on 25th February 2025 in Liverpool, where we’ll dive deeper into practice management strategies and tools to future-proof your firm. At the time of writing there’s only 100 tickets left, secure your free spot here: www.engager.app/labs25