MTD for self assessment – how will your firm create the additional capacity needed? 

By now you are probably exhausted reading about MTD. We spent years preparing for it to be implemented for VAT. Then we watched HMRC procrastinate about how or when to implement it for corporate tax, before abandoning it completely. But what we do know for sure is that from April 2026, we will need to make changes to the way we handle qualifying clients for self-assessment.

So what are firms doing to ensure they are ready for the additional work? 

‘Additional work?’ I hear you ask.

Well, yes. Whilst MTD for this group means an increased adoption of technology across clients (making our jobs as advisors easier), there are definitely some significant downsides to consider. Reporting quarterly means (by definition) four times as many touch points with our tax only clients. Many advisors will be well in tune with the pain of getting these clients to give us the information we need just once a year. Many will also be exhausted by the level of questions we get from certain clients at tax year end. Practice Gateway research data shows that around 60% of the current tax return process is spent just communicating with clients. Now imagine multiplying that by four! 

So the question is, how do we ensure we don’t face a capacity crisis? How do we make sure our tax advisors have enough time to manage this additional work and communication without service levels dropping? The way I see it, there are 3 options; 

1. Establish which clients are right for you in this new world – The harsh reality is that those clients who come to you once a year, don’t respond to your requests quickly, but want constant communication, probably aren’t the best clients for you moving forward. If those clients are a drain now, just imagine what a drain they’ll be after MTD SA. So now might be a good time to run an analysis of your base. Get a sense for what clients are actually paying you in comparison to the resource required to service them. Which of your SA client are taking additional services from you. These might be the group you want to prioritise.  

2. Increase your workforce – The talent crisis in the accounting industry in recent years has been well documented. But the good news is that the areas touched by MTD SA are areas that can be serviced adequately by newly trained accountants. So if your firm is looking to successfully manage the new legislation, or better, take advantage of the clients who are looking for a new accountant as a result of option 1 (above), then hiring new staff to specifically handle MTD SA might be a good move. After all there are a lot of businesses out there who are nervous about the change and looking for someone to handle their tax which they might have previously felt comfortable doing themselves.  

3. Automate you client communication to increase capacity – The idea here is not to communicate with our clients through AI chatbots. Instead what we could look to do is use technology to handle the administrative elements of the tax process. For example, there are technologies out there that will handle all the document / information requests to clients, as well as chasing the client when they don’t give you what you need. Some of these technologies will even take what the client sends you, read the data and push it into your compliance software. This means advisors can spend their time hand-holding clients through the change, rather than drowning in the extra admin. This approach in particular, allows you to manage the extra work with the same resource, and without letting service levels drop.  

Choices, choices

Clearly each firm will have their own ideas and approaches that feed into what they see as the future for their firm. What is important is that we do pick an option. Know your desired outcome and implement a strategy that puts you on the right path towards it. Assuming that you’ll be able to manage the new world with the same people and the same clients doing the same things is setting you up for a capacity and service level crisis.  

Our data research is showing that the preferred option for UK top 100 firms is option 3. Using technology to automate the manual processes and give you more time back to spend with the client. Its something the industry has been working towards for some time now (well before MTD was a whisper). With the advent of AI in accounting there is now a real opportunity for firms to evolve into client focused advisors, rather than being data tax drivers.