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How to prepare your landlord clients for MTD for ITSA

11th May 2022
Brought to you by
FreeAgent logo

Award-winning accounting software for small business owners and their accountants and bookkeepers.

Share this content

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is fast approaching. Anyone with annual property and/or self-employment income above £10,000 will have to keep digital records and make quarterly submissions to HMRC using MTD-compatible accounting software from April 2024, so it’s important to start thinking about how to prepare your landlord clients as soon as possible. Award-winning accounting software provider FreeAgent has a five-step plan to help you bring your clients up to speed.

A laptop with a house emerging from it is shown. It implies technology and the property market are blended.

1. Segment your clients

A great place to start is by dividing up your client base and creating a specific segment for your landlord clients. This will allow you to tailor your approach and communications to their particular needs.

You can even think about splitting your landlord segment further by creating groups based on digital expertise. Digitally-minded clients can be brought up to speed relatively quickly, leaving you more time to nurture those who are less savvy using a more comprehensive communications plan.

Not only will segmentation ensure that your landlord clients receive the right kind of support, it can also help you to streamline your workflow, plan your resources and build more effective communication strategies. Check out FreeAgent’s handy guide to segmenting your clients for MTD.  

2. Design a communication plan

Once you’ve segmented your landlord clients, you can start thinking about how to share the relevant information with them in an effective way. A well-organised communications plan will not only make it easier for you to identify the key messages you want to share but also how best to communicate those messages with your different client segments. 

Some important things to consider are:

  • Your communication methods - while some clients are happy to receive all their information via email, others might prefer a phone call or even a meeting in person. 
  • Your messaging - dividing the information you want to share into various topics will help avoid overloading your clients with long emails that cover lots of complex information. You can also tailor the information based on the level of digital expertise your different audiences have.  
  • Your timings - laying out what information needs to be delivered and when will help give structure to your communication plan

Discover more tips on how to communicate to your clients about MTD.

3. Set targets for migrating your clients

With new MTD for ITSA rules coming into effect in April 2024, it’s vital that you give your practice plenty of time to migrate all your landlord clients to suitable accounting software, such as FreeAgent for Landlords

Assess how many of your landlord clients will be affected by the rule changes and consider the hours needed per month to migrate them.  For example, say you have 100 clients and 18 months before the rule changes are implemented. Your practice will need to migrate six clients per month in order to meet the deadline. The industry average for migrating a client is around four hours, meaning you will need to set aside 24 hours per month for the task. 

By establishing a clear plan with internal monthly goals, you are much more likely to avoid having to tackle a mountain of work just before the deadline. 

4. Tailor your client training 

Different clients will likely require different levels of support when it comes to preparing for MTD for ITSA. Consider running training sessions tailored to the level of client involvement - for example, one session for clients who won’t have any involvement in their bookkeeping and quarterly filings, another for those who will pick up some elements, and another for clients who will do all of it. 

5. Communicate your pricing 

If you decide to review the pricing of your services, make sure you take the time to explain to clients why you’re making the change. Give plenty of notice and be clear about what each of your services will cost so your clients can plan effectively. Find out more about how you can package MTD for ITSA into your pricing strategy

For more top tips on preparing your practice and landlord clients for MTD, sign up for FreeAgent’s MTD and landlords: getting your clients ready webinar on 24th May.

This article was originally published on the FreeAgent blog.