Now that Making Tax Digital (MTD) for Income Tax is fully established for the first cohort, you might have thought that things would start to get easier.

However, life is rarely straightforward and there can be complications that get in the way of your clients keeping up with their obligations.

If your clients are finding themselves falling below the income threshold where once they were comfortably above it, you may need to put in some extra work to keep them compliant.

This raises the challenge of whether you will need to commit time and resources to doing this or if there is a better solution.

Why might clients give up on MTD obligations?

Having put effort into getting your clients equipped and ready to handle MTD, it may be disheartening to see them ignore those obligations when their income takes a hit.

A lot of the promotion around MTD has not made it clear how qualifying income is determined and this might make some clients excuse themselves prematurely.

This year’s MTD obligations are determined, in part, by qualifying income during the 2024/2025 tax year.

This means that any sole trader, self-employed individual or landlord who earned above £50,000 in that time will be expected to adopt MTD this year, even if their income has diminished since then.

This may be news to some of your clients who falsely believed that they were exempt if their income was lowered or paused.

The most common example of this would be maternity leave, wherein income may be halted entirely for an extended period of time.

Even if income is nil, clients will still need to submit their MTD filings, provided they previously qualified and will receive a qualifying income in the future.

It is only possible to be exempt from MTD if all qualifying income permanently ceases or if qualifying income falls below the threshold for three consecutive years. 

As the thresholds themselves are set to reduce, it may be more challenging for clients to slip through the net this way.

How can you help keep clients compliant with MTD?

If you put yourself in the shoes of your clients, you will likely get their frustration.

If they have just welcomed new life into the world and have taken a step back from business to do so, the last thing they want to do is tell HMRC they didn’t earn anything.

You need a solution that will slot comfortably into the lives of even the most distracted, stressed, or disgruntled clients.

Our MTD-Assist is tailor-made for this exact type of client.

Rather than being an intensive software that requires a lot of time to master, MTD-Assist is intuitive and can be used to maintain compliance even when life gets complicated.

MTD can often mean a lot more heavy-lifting for accountants who have to micromanage the quarterly submissions to make sure that their clients are not making mistakes.

MTD-Assist frees you from this burden by making it so simple for clients to use and understand that all you will do is a final review if you so wish.

As your clients’ needs and obligations change, MTD-Assist is there to keep them compliant and confident so that neither you nor they find the new way of filing tax more difficult than it needs to be.

Book a demo to see the MTD software that is ready to support your clients, no matter what life throws at them.