Making Tax Digital for Earnings Tax is ready to develop into necessary for a lot of taxpayers from April 2026, however one in 5 accountants within the UK say they don’t seem to be conscious of the regulation
New analysis from Wolters Kluwer Tax & Accounting exhibits that almost all of accountants (68%) within the UK are feeling constructive in regards to the upcoming Making Tax Digital (MTD) for Earnings Tax rules, which would require digital report maintaining for a lot of taxpayers. Nonetheless, considerations nonetheless stay with two in 5 accountants (42%) saying that greater than half of their purchasers are nonetheless not submitting tax information digitally or utilizing accounting software program.
“April 2026 is quick approaching, and each accountants and taxpayers have to be prepared for the rollout of Making Tax Digital for Earnings Tax within the UK. Our analysis exhibits that accountants largely view MTD as a helpful step ahead—one which guarantees higher effectivity, improved monetary forecasting, and worthwhile time financial savings,” stated Bas Kniphorst, EVP and Managing Director Wolters Kluwer Tax & Accounting Europe.
“For a lot of accounting corporations and finance departments, figuring out the fitting answer to assist the transition to digital-first tax returns is the largest problem. Early preparation, guaranteeing the fitting know-how and software program is in place will likely be vital to ensure a clean transition —particularly as a major variety of companies nonetheless depend on non-digital information, akin to paper receipts”, stated Dorcas Mbwiti, Senior Product Supervisor, Wolters Kluwer Tax & Accounting UK.
From 6 April 2026, self-employed people akin to sole merchants and landlords with a gross revenue of over £50,000 – made throughout the 2024-25 tax 12 months – might want to meet MTD necessities. There may be broad consciousness of the adjustments, with 80% of accountants reporting that they’re conscious of its existence and 71% saying that they perceive the necessities properly. Nonetheless, nearly one in 5 accountants (20%) say that they haven’t heard of the regulation. The same proportion (22%) say that they ‘nearly’ perceive the necessities, with 7% saying they perceive them ‘not properly’ or ‘poorly’.
Discovering the fitting software program is the primary concern for accountants
Nearly all of professionals working in accounting practices or finance departments (68%) imagine that MTD is useful for his or her enterprise, and greater than half (58%) suppose it’s a constructive for his or her purchasers. Solely 5% suppose the regulation could have a unfavorable impression on their enterprise. Greater than half of these surveyed suppose that MTD will carry elevated bookkeeping effectivity (66%), simpler monetary forecasting and information evaluation (57%), and save time (51%). Many (50%) additionally suppose that purchasers will profit from simpler reporting and two in 5 (41%) see it as a chance to construct relationships with purchasers. Nonetheless, solely 29% suppose that MTD will unlock new income streams for his or her apply.
In the case of considerations round MTD, the primary fear is discovering the fitting software program (50%) adopted by non-compliance, penalties, or fines (42%). Multiple in three are additionally involved about purchasers being sad with change (37%) and never understanding the foundations (34%).
Non-digitalised purchasers are a problem for accountants
A problem accountants are presently dealing with is onboarding purchasers to MTD once they don’t use digital strategies, akin to accounting software program or digital information. Many UK accountants (42%) say that over half of their purchasers are presently non-digitalized, which signifies that they’re nonetheless maintaining non-digital information, akin to paper receipts.
Accounting practices and finance departments are already planning to beat this hurdle. Two in 5 accountants (40%) say they are going to work with purchasers to assist them undertake digital bookkeeping and onboard them to the fitting software program. A 3rd (31%) say they are going to supply hybrid providers—digitalizing key gadgets however nonetheless inputting some data manually— whereas a few of them (19%) will proceed handbook or non-digital strategies, submitting the data on their behalf of their clients. Only a few (6%) will ask purchasers to self-train on the software program and nearly none (1%) will cease servicing non-digital purchasers or cost further charges for handbook dealing with.
Lack of tech literacy is a barrier to digital report maintaining for purchasers
For purchasers, the primary limitations for utilizing digital report maintaining based on UK accountants focus on feeling snug utilizing the know-how. In truth, half of them quote purchasers’ lack of digital abilities or tech literacy as a difficulty whereas a really comparable proportion (47%) cited consumer resistance and price of software program or migration as different vital limitations. Accountants additionally say that the complexity of their purchasers’ jobs (31%), worries about confidentiality (29%), time or useful resource constraints (22%) and regulatory and compatibility points with consumer methods (17%) are a difficulty.
The way forward for tax returns is digital, and analysis exhibits that the tax and accounting trade is feeling constructive about it. Whereas there could also be an preliminary set-up interval on the horizon, plainly professionals are excited for this new starting of efficiencies by means of digitalization.
