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Preparing for Making Tax Digital (MTD) – Next steps to ensure your clients are prepared – Tax agents blog

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In last week’s blog I talked about the importance of moving your clients to digital record keeping (if they are not doing so already) for April 2019. From this point, businesses with taxable turnover above the VAT registration threshold must keep digital records and submit VAT returns using MTD compatible software. It is not too early to start preparing for this now though – in fact, the MTD VAT pilot has already started.

If you have not already, you can create an Agent Services account now. This will enable you to sign up clients to MTD as well as access MTD on your clients’ behalf. You can link all your existing agent codes to the new account so you won’t need to go through a re-authorisation process.

When signing a client up to MTD you should make sure they know that they must keep their records digitally, (you may wish to recommend the Talking Point webinar, Making Tax Digital for Business – the basics) and:

  • for VAT, submit their VAT returns to HMRC through MTD compatible software. This will be mandatory for those above the VAT threshold from April 2019, but those below the threshold can join too and people will be able to join the pilot this year to get ready early
  • for income tax, provide summary updates of income and expenses on a quarterly basis to us and finalise their end of year position through MTD compatible software.

Details of the first MTD compatible software products for income tax are available on GOV.UK and information will be updated as new products become available. Once the initial private testing phase of the VAT pilot is complete, details of MTD compatible software for VAT will also be published on GOV.UK, together with information to help businesses and agents join the pilot and prepare for April 2019. If you or your client are already using commercial accounting or record keeping software, speak to your provider to find out when it will be MTD compatible.

If your clients will be required to join MTD for VAT from April 2019 and they are not yet keeping their business records digitally, you will need to think about how and when they start the transition to digital records, and the help and support you may need to provide to them. Even if they won’t be required to join MTD yet though, we know many agents are starting to migrate their non-digital clients onto digital record keeping.

In particular, it makes sense to start your new clients on MTD straight away so they can benefit from a more straightforward and  streamlined way of keeping records and providing tax information to HMRC from the start and they don’t need to make changes later.

Please do consider encouraging your clients to get involved in our pilots so they can help shape the new services. The income tax pilot is available now and the VAT pilot will be made available just as soon as we have finished the first phase of testing it with our initial volunteers.


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