Editorial team AccountingWEB.co.uk
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MTD preparations: ‘Break it into manageable chunks’


Find out how Sam Mitcham from SJCM Accountancy is segmenting her client base and planning a programme to bring them into MTD ITSA in different phases.

26th Nov 2021
Editorial team AccountingWEB.co.uk
In association with
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Even with the extra 12 months granted by HMRC, the introduction of Making Tax Digital for income tax (MTD ITSA) in April 2024 is going to place a burden on small businesses and their accountants.

To cater for the unceasing need for clear guidance on MTD, AccountingWEB teamed up with Sage to create a series of short, 15min videos looking at different aspects of preparing for MTD.

Video 1 in the series introduces Sam Mitcham from SJCM Accountancy and Sage product marketing director for accountancy and tax, Chris Downing, who tackle the basic compliance requirements and the transformational nature of the MTD project.

What we know so far

The September legislation release clarified some issues and put back the MTD ITSA go-live date to April 2024. But it’s still very important to recognise and plan for the discrete steps accountants will need to work through with their clients by that deadline, Downing explained. 

Ahead of 2024, around 4m self-employed people and landlords with income over £10,000 will need to keep digital records and prepare to update HMRC every three months rather than every year. Before then, VAT-registered businesses turning over more than £10,000 that have not yet entered the MTD filing regime will need to start submitting quarterly updates from April 2022.

“This is a massive transformation change for every accounting practice,” said Downing. “Accountants need to be thinking about creating awareness with clients, and for larger firms for all colleagues… [and be] mindful that processes need to be adapted.”

One step at a time

For Sam Mitcham, “It’s all about baby steps for the cilents… giving them stepping stones rather than bombarding with huge changes.” Her firm has already segmented clients into different groups such as sole traders and landlords and assessed their technology proficiency and whether they have separate personal and business bank accounts yet.

Then she divided clients into those who want to deal with the quarterly submissions themselves and those who want her firm to do it for them.

“I intend to deal with the clients I know are hard work first, so they’ve got a longer timescale to get used to what’s happening,” she said. “Then I’ll have some leeway to work on areas where they need further training before the point where their submissions need to change.”

SJCM still has a few clients that are not yet on MTD for VAT who will have to go in by April 2022. “I’ve been trying to move them over, just so we don’t have another mad rush,” she said.

Looking at the bigger picture, Downing noted how all this client training and onboarding needs to fit around the normal accounting calendar of payroll, the 31 January self-assessment deadline and quarterly VAT returns. The objective of the exercise is to manage the next stages of MTD so the accountant has control over client awareness and getting them onto the necessary platforms, including the MTD agent services account (ASA).

“Technology can be used to automate as many processes as possible,” he added.

This video is the first in a four-part series. You can access all of Sage's MTD resources and support on the Sage MTD Hub.


Replies (3)

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By ireallyshouldknowthisbut
26th Nov 2021 13:39

Serous question, given we just don't know

(A) who will really be affected

(B) when it will really start as a compulsory wrecking ball of red tape (if at all)

How exactly are you approaching this when not just advertising software?

It must be an odd conversation with a client. I cant see how you can realistically do that and remain credible advisor if you blatantly lie and tell your clients this is 100% actually going to happen this time.

If you explain the reality that we just don't know when it will be compulsory and for whom, and how - if at all- any of those will be enforced, then the client will quite rightly tell you to come back when you know for sure its happening, they have a business to run and your job is to make the admin easy, not harder.

I am assuming you are a competent firm in the first place, have clients on the best record keeping method for them, and don't have clients rocking up with carrier bags of receipts of any of the other nonsense which I have seen a conflating MTD requirements with "sorting out your core business"

Thanks (3)
Replying to ireallyshouldknowthisbut:
By Hugo Fair
26th Nov 2021 13:56

Completely agree.
Breaking something "into manageable chunks" pre-supposes that you have a cogent plan (of objectives/methods/resources/etc) that can be segmented in order to check on progress at regular intervals.
Whereas with MTD, even HMRC appear unable to describe the entirety of the 'plan' in anything approaching detail ... so it can't sensibly be segmented.

Try the following analogy.
If the objective is to get from London to Edinburgh, without using a car and with a total budget of £50 ... you could make a stab at a plan (although it would be a shame when you arrived after the event that no-one told you was why you had to get there).
However if the objective is merely set as getting at least 330 miles away from London within a week ... you'll be a tad peeved when your instructors later tell you about not driving or the proposed destination or the budget cap!

Why would you unleash the current uncertainty on all your clients - knowing that unnecessary costs will be incurred by one or both parties due to late clarification of details by HMRC or even late notice of revisions?

Thanks (3)
Replying to ireallyshouldknowthisbut:
By lionofludesch
29th Nov 2021 17:58

ireallyshouldknowthisbut wrote:

It must be an odd conversation with a client. I cant see how you can realistically do that and remain credible advisor if you blatantly lie and tell your clients this is 100% actually going to happen this time.

I agree. It's 60:40 at best (or worst, depending on your point of view).

I'd be tempted to spend some time claiming exemption for the least digitally able of my clients, which would leave more time to see to the rest. And I haven't even considered the cost to the client in saying that, though I'm guessing it'd be a lot more than £6 a year or whatever HMRC currently claim.

Thanks (0)