Do I need to use an accountant for Making Tax Digital?
If you're a sole trader or landlord preparing for Making Tax Digital for Income Tax, you might be wondering whether you still need an accountant. While Making Tax Digital software can handle the basics, an accountant brings expertise that goes beyond just filing returns.
Making Tax Digital for Income Tax changes the way tax is filed in the UK. From April 2026, sole traders and landlords with qualifying income need to use HMRC-recognised software to keep digital records and send quarterly updates. This is a shift from the old Self Assessment system, which could be confusing. The new system should help streamline things, but it doesn't mean accountants are out of the picture.
Before we get started, a quick reminder that we can’t give you tax or financial advice. You’ll need to speak to a professional adviser for that.
Does MTD software do the job of an accountant?
For some people, MTD-compliant software will be enough. If your tax affairs are straightforward, you might not need extra help. HMRC-recognised software (like Monzo's free MTD tool) can handle the digital record keeping and quarterly updates that MTD requires.
The main difference from how things used to work is that the process is now more automated and happens regularly throughout the year, rather than once a year. You'll record transactions as they happen, submit quarterly updates to HMRC, and then finalise everything with an end-of-year return. Software does the heavy lifting of organising this data and making sure it's in the right format.
But here's where it gets important: software can't replace professional judgement. While it'll calculate basics and keep your records organised, it won't necessarily know about:
Complex allowances/deductions you might be entitled to
Tax-efficient strategies specific to your situation
How to handle unusual transactions
Changes to tax rules that could affect you
How to categorise transactions as allowable or disallowable for tax purposes
It's also worth noting that there are plenty of myths about MTD floating around. One common misconception is that MTD software does everything an accountant does. In reality, the software handles the admin and compliance side, while accountants handle the strategy and advice.
How can an accountant help with MTD?
Even with good software, there are several ways an accountant can add value when it comes to MTD:
Saving you time
An accountant can take the whole process off your plate. Instead of worrying about quarterly deadlines and whether you've categorised everything correctly, you can focus on running your business. They'll help make sure your records are accurate and submitted on time.
Reducing risk of MTD penalties
Making Tax Digital for Income Tax comes with penalties for late submissions or errors. An accountant who understands the ins and outs of the system can help you avoid these penalties by making sure everything’s done correctly from the start.
Maximising deductions and reliefs
This is where accountants really earn their keep. They know what expenses you can claim, what reliefs you're entitled to, and how to structure things tax efficiently. Software will accept what you input, but it won't necessarily tell you what else you could be claiming.
Handling complex situations
If you have multiple income streams, foreign property, or unusual business structures, an accountant's expertise becomes even more valuable. They can navigate the complexities that standard software might not handle smoothly.
Providing strategic advice
Good accountants don't just look backwards at what's already happened. They help you plan ahead, advise on business decisions, and structure things in the most tax-efficient way possible.
These tips to make the switch to MTD simple can help, whether you're working with an accountant or going it alone.
What do accountants need to know about Making Tax Digital for Income Tax?
If you're thinking about hiring an accountant, it's worth understanding what they need to consider when helping you switch to MTD.
Accountants need to understand the distinction between ‘main agents’ and ‘supporting agents’. Main agents have full access to manage your affairs and can do almost everything you can do yourself. Supporting agents have more limited access and can only see business and property income details.
They'll need to make sure they're authorised correctly through their HMRC agent services account. Once authorised, they can help you sign up, choose the right software, and manage your quarterly updates and final tax return.
Accountants also need to be aware of digital linking requirements. This means that if they're using multiple systems or software to manage your accounts, the data needs to transfer digitally between systems. Copying and pasting isn't allowed under MTD rules.
The quarterly update schedule is another key consideration. Updates need to be submitted by specific dates throughout the year (7 August, 7 November, 7 February, and 7 May), and the final annual tax return is still due by 31 January, just like with Self Assessment.
When should I start thinking about MTD?
Making Tax Digital for Income Tax is being rolled out in phases starting from April 2026. Here's what you need to know about the timeline:
April 2026: sole traders and landlords with gross income over £50,000 in the 2024/25 tax year need to use Making Tax Digital for Income Tax
April 2027: the threshold drops to £30,000 earned in the 2025/26 tax year
April 2028: the threshold drops to £20,000 earned in the 2026/27 tax year
If you meet these thresholds based on your income from the relevant tax year, you need to start using MTD-compliant software and keeping digital records from the start of your first qualifying tax year.
Even if you're below the threshold, you can voluntarily sign up for Making Tax Digital for Income Tax if you want to get ahead of the curve. It might actually make your life easier in some ways, and gives you time to get comfortable with the system before it becomes mandatory.
The key is to start preparing now, rather than waiting until the deadline is looming. That means:
Understanding whether the thresholds apply to you
Choosing HMRC-recognised software (or checking your bank offers it built in, like Monzo Business accounts do)
Deciding whether you need an accountant's help
Getting your record keeping in order
You can find more detailed information about thresholds and deadlines in our Making Tax Digital guides.
The bottom line
If your tax situation is straightforward and you're comfortable with technology, MTD-compliant software might be all you need. But if you want help maximising deductions, avoiding penalties, saving time, or getting strategic advice, an accountant may be worth the investment.
If you work with an accountant, a Monzo Business account can still work for you. You can connect them to accounting software, upload receipts, save for tax, and share statements in just a few taps.
The good news is that Making Tax Digital for Income Tax doesn't have to be complicated. With the right tools and support – whether that's software alone or software plus an accountant – you can handle it smoothly. The most important thing is to start preparing now so you're not rushed when your mandatory start date arrives.
Free MTD software is built into Monzo’s business accounts as standard. It’s recognised by HMRC too, so you can file tax straight from Monzo to HMRC. Apply for a free business bank account now to access the tool.
Making Tax Digital tool available for sole traders and landlords only. Only sole traders, limited company directors and landlords in the UK can apply for an account. Ts&Cs apply.