8 questions you need to ask after an MTD for IT quarterly update 

This year might feel like The Big Event when it comes to Making Tax Digital for Income Tax, but it’s a practice run. The volume of work is about to go up significantly. 

Starting next year, more clients will need your help when it comes to Making Tax Digital for Income Tax (MTD for IT). That’s because the threshold will move to include individuals earning more than £30,000 from sole trader or landlord income (or a combination of both). 

Meanwhile, full penalties for MTD for IT are going to come into force, too. In this first year, we’ve been given some leniency by HMRC, but not so in 2027. They will be in lockstep with those for MTD for VAT. 

Then, in 2028, the MTD for IT threshold is going to move yet again to include individuals with income exceeding £20,000 (again earned from sole trader or landlord income). And HMRC might not stop there. In time, you could have even smaller sole traders and landlords – including people with side hustles – knocking on your door for help. 

That’s a lot more clients putting your processes to the test – so, it’s important to ensure all systems are up to the task.  

How this blog on MTD for IT will help you  

We’ll take you through 8 questions – effectively a systems-check to run after each quarterly update sent to HMRC. That way, you can fine-tune everything before there’s yet more demand for your MTD for IT services. We’ll help you to reflect on the following: 

• How easy was it to get information from your clients? 

• If MTD for IT penalties were in place, would any of your clients have received points this time around? 

• How smooth was the process of sending quarterly updates through to HMRC? 

• Did any other work get in the way? 

• Did any mistakes get made? 

• How did your staff cope with the MTD for IT quarterly update? 

• What went well with your MTD for IT quarterly update? 

• Did you make full use of the extra client touchpoints? 

Let’s begin – it’s time to see what’s working, what isn’t, and how to fix things before the stakes get higher. Remember to ask these questions after every quarterly update submitted under MTD for IT. They also apply to your final declaration. 

Question 1: How easy was it to get information from your clients? 

Accountants can’t do much under MTD without quarterly client data. So, it’s important to assess how well clients responded to your request for information. Did they get back to you straightaway, or did they take a lot of time? For those that took a while, how much effort did this demand of you or your team – for example, did you have to send out a lot of reminders? 

List which clients were slow to get back and use this insight to inform your actions during the next MTD for IT quarterly update submission. You’ll likely have some responsive clients, and some who left things too close for comfort. Once you have this list to hand, you’ll know who to reach out to first.  

This is a comms issue, so treat it as such 

Some clients will no doubt have tested your patience, but it’s important to see what you can do to help. Consider this a learning process for everyone. For example, did they really understand how urgent your request for information was, and how important it is to comply with MTD for IT? It might be you need to underline this with more urgency… or repeat the message until they get it. 

As part of this, you might want to try and build in some extra capacity next time around, even if you think clients are getting the message. The challenge of MTD is going to occur every three months, not counting the final declaration. Inevitably, at least one quarterly update is going to be sent to HMRC around your client’s peak business period, if they have one. The client will be distracted at some point, and when they are, MTD needs to sit high on their list of priorities. 

Question 2: If MTD for IT penalties were in place, would any of your clients have received points this time around? 

Thankfully, HMRC is applying a soft landing for this first year: you won’t get penalty points for late quarterly updates in 2026/27. That easement only covers this year’s quarterly updates though. Late-payment penalties still apply, a late final declaration can still cost you a point, and from 2027/28 onwards missed quarterly updates will earn points too. 

This grace period could encourage a level of pragmatism among busy accounting firms and their clients. We might be tempted to think: “what’s the harm in being behind this year if we have a few setbacks?” 

This year not so much – as long as the final declaration is on time – but you need to think about 2027’s MTD penalties and beyond. So, take a look through your client list and ask: which of them would have been handed points by HMRC? Consider everything that went wrong and resulted in a late quarterly update submission. Plot events out, step by step, to see where the blockers are. Work as a team to see how you can address them – you, your colleagues, and (where appropriate) your client. 

Thankfully, HMRC is applying a soft landing for this first year: you won’t get penalty points for late quarterly updates in 2026/27. That easement only covers this year’s quarterly updates though. Late-payment penalties still apply, a late final declaration can still cost you a point, and from 2027/28 onwards missed quarterly updates will earn points too. 

Question 3: How smooth was the process of sending quarterly updates through to HMRC? 

Don’t let yourself relax into inefficient processes just because they succeeded. Be kind but tough on the system you are currently using for MTD for IT. Think about how easy it was to collect the data that you had and then send it through to HMRC. Did it go straight from your accounting software, or did you have to rely on a bridging solution? Did you waste any time logging in and out of platforms or re-typing information? 

It’s really important to get your digital MTD process right as soon as possible. Sending the submission through to HMRC might seem like a small thing, but it’s the final hurdle and it happens for every client. So, take any time lost and multiply it by the number of quarterly updates you’re going to send now, next year, and the next. Any small interruption in your processes today will become a big problem tomorrow.  

Question 4: Did any other work get in the way? 

Under the old regime, Self Assessment was the biggest show in town across January. Because it happened during winter months, a lot of incorporated businesses had slowed down for December and were gradually getting going again. 

Now, MTD for IT quarterly update submissions happen throughout the year, in the middle of everything else. Your practice might be handling audits, compliance, onboarding new clients, providing them with advice, or trying to win more work. 

This is that moment when you accept busy season is business as usual. So, what does that look like? Were things fairly efficient, or do duties collide? 

Question 5: How did your staff cope with the MTD for IT quarterly update? 

This is an important question, and one we have to split into two areas so we can appreciate the strain everyone was under – task tracking and experience. 

Task tracking and MTD for IT quarterly updates 

So, firstly, were you able to monitor the tasks that your staff were dealing with during the time of the last MTD for IT update? Could you understand how the quarterly update got in the way anything else people were trying to achieve – such as winning advisory work?  

Workflow visibility is very important because it ensures nobody gets needlessly snowed under when MTD hits. As such, it’s a good idea to consider dedicated practice management software, if you don’t have any. 

The staff experience 

The other area revolves around the lived experience of MTD for IT quarterly updates. Do you have a good idea of how staff were coping when handling this work? You might know the process, and who was assigned to what, but you also have to understand the kind of stress it might have put on your people. Create a time for everyone to think about this as a team. Afterwards, decide if you need to protect wellbeing a little more next time around. 

Question 6: Did any mistakes get made? 

New processes can catch anyone out – they can take you, your team, or your clients off guard. Are there any lessons learnt from the MTD for IT quarterly update process? Is there anything you would do differently next time? 

In the days following an MTD quarterly submission, be honest and reflect on any mistakes that were made. It’s a good idea to get the team together for this exercise. Chart out every small issue, and see what came up time and again. Write down any unexpected hiccups. Then, think as a collective how you might handle problems next time. 

Question 7: What went well with your MTD for IT quarterly update? 

Guess what – despite everything, MTD for IT might not have been all bad for your accountancy practice. It’s okay to admit it… actually, it’s necessary. 

Try to appreciate some of your strong points when handling this latest MTD for IT quarterly update. Once you do, you might be able to take those strengths and apply them to events and processes that went less smoothly. 

For example, did some of your team do a particularly great job of working with their MTD for IT clients? Was there a trick they had for getting them to move fast with sign-off – and is this an approach everyone could adopt? 

Question 8: Did you make full use of the extra client touchpoints? 

Increased touchpoints with your clients can seem like the downside to MTD for IT. It means more chasing, more phone calls, more of everything you used to do once a year. But that’s also the upside. This is a chance to develop new business and build stronger relationships with your existing clients. 

So, ask yourself: are you successfully leveraging the extra time spent with clients sorting out an MTD for IT quarterly update? Are you using use those moments to see if they need other, chargeable help – perhaps some advice, or a service line they normally wouldn’t ask for in December or January? 

Because of MTD for IT, you will now get the chance to speak to them five times a year, at least. The great news is each is a moment to do more for them and earn more money for your accountancy practice. In the end, MTD for IT can herald a deeper relationship that will benefit you both. 

Keep ahead of MTD for IT 

Whatever this MTD for IT quarterly update taught you, the next one is already on its way – and the one after that. The practices that come through MTD in good shape will be the ones that keep learning, refining, and getting ahead of each deadline rather than reacting to it. 

If you’re looking for more guidance to help you do exactly that, our MTD hub brings together everything you need in one place. There are practical resources, and answers to the questions practices like yours are asking right now.