From Yahoo Finance: 2025-05-06 11:41:00

A recent survey reveals that Making Tax Digital (MTD) for income tax will be a major challenge and opportunity for UK accountants in 2025. 81.70% of accountants see MTD as their primary concern, but 79.08% also view it as a significant opportunity. Accountants are preparing for the requirement of more frequent client communication and digital record-keeping under MTD for income tax starting in April 2026. Despite concerns about readiness, previous MTD mandates have shown significant benefits, with businesses reporting time savings, improved operations, and financial benefits. The estimated value of time saved annually ranges between £603m and £915m.

MTD for Income Tax brings key changes like mandatory digital record-keeping, the use of MTD-compatible software, and quarterly submissions of income and expense summaries to HMRC. Accountants anticipate the initial £50,000 threshold will impact 20% of their clients, with the impact expected to grow significantly in the following years. AI is seen as a tool to streamline processes, improve client servicing, and attract new business. The shift to MTD requires a cultural change in how tax and Self-Assessment are approached, with early preparation, client education, and team alignment viewed as critical for navigating and capitalizing on this digital transition.

Read more: MTD posts challenges and opportunities for UK accountants