Industry uses compromise amidst the MTD accountancy conundrum

5 minutes length
Posted: 21st November 2018

New research from IRIS Accountancy Solutions has found accountancy practices have become the conduit for MTD as their clients grapple with the move to digital bookkeeping.

Research among 385 practices during November 2018 found that moving clients to bookkeeping software continues to be the greatest business challenge (66%), with four out of five (78%) practice clients using spreadsheets. As a result, three out of five practices (60%) will continue bookkeeping services for clients.

The dilemma has seen practices compromise; preparing digital records on behalf of their clients and using ‘bridging software’ as an interim MTD for VAT solution.

Nick Gregory, Chief Product and Marketing Officer for IRIS Accountancy Solutions believes firms are the lynchpin during the move to digital tax. “Practices are fully aware of the efficiencies digital bookkeeping can provide but are struggling to move clients to these platforms. The compromise is to use bridging software such as IRIS VAT Filer, which enables them to make the submission to HMRC. 

“Compliance services will continue and while revenue can be generated from these areas, forward-thinking practices are being more assertive with clients and moving them to bookkeeping software and other collaboration platforms. This enables them to focus on the more lucrative advisory services.”

The industry has been using technology to collate information from data sources as well as communicate with clients. Over recent months, IRIS has seen its collaboration tool, IRIS OpenSpace used by over 425,000 accountants and their clients, providing a simple and secure way for accountants and their clients to work together online. 

The reticence among businesses to step into technology has caused further discord within the practice landscape as IRIS has found conflicting sentiment with HMRC’s MTD pilot. The business is receiving over 100 requests a week for its ‘bridging software’ but the results of the research have found nearly half of respondents (47%) are not willing to join HMRC’s MTD pilot.

Nick Gregory continues, “Practices are using bridging software as an interim MTD for VAT solution while they continue to provide compliance services to help clients during the initial timeframe. Those not willing to join the HMRC’s MTD pilot are holding off to see if there will be any further changes to the timeframes. This is concerning as MTD for VAT is happening. If practices do not make changes until the legislation comes into force, they are likely to face even greater issues. 

“However, accountants are robust. The industry has been through several legislative changes over the years and for many, there is now light at the end of the MTD tunnel. The challenge now is to bring clients into the world of digital bookkeeping, so everyone can thrive in the digital economy.”

In a bid to unravel the process, IRIS has created a five-step MTD programme to help accountancy professionals prepare their practices for all types of client without too much disruption. IRIS is taking the programme across the country in its forthcoming, free of charge roadshows which will detail the implications for practices and their clients, as well as demonstrate how MTD can be turned into a profitable revenue stream.


IRIS Accountancy Solutions is seeing an increase in momentum for the HMRC Making Tax Digital (MTD) pilot as requests for IRIS VAT Filer increase to over 100 per week. 
Since the VAT Filer launch at IRIS World London on 9th October, the UK’s leading accountancy software provider has received over 400 requests for its ‘bridging software’ which can only be used if accountancy practices have registered for the HMRC MTD pilot. IRIS has also seen an increase demand for its KashFlow and IRIS Snap products which also streamline MTD compliance.
Nick Gregory, Chief Product and Marketing officer for IRIS explains, “The number of requests for these products reflects the appetite from firms wanting to join the HMRC MTD pilot. It also shows accountancy professionals are talking to clients before the deadline to ensure they are prepared ahead of the new legislation.”
Bridging software allows the required VAT values to be easily imported from various sources and submitted to HMRC for compliance with MTD. IRIS VAT Filer automatically connects to HMRC and retrieves client data such as previous submissions made under MTD, current VAT obligations, liabilities due and payments already made. As a result, keeping track of clients’ submissions, payments and any amounts outstanding is much more straightforward. VAT Filer is included in IRIS as part of the subscription.
To help accountancy professionals through the process, IRIS has published a free guide, Making Tax Digital: Setup Guide for Agents. This highlights the information needed to set up an account and screen shots to show each step of the process.

About IRIS Accountancy Solutions About IRIS Accountancy Solutions

With over 21,000 customers and 83 of the top 100 UK accountancy practices using IRIS products and services, IRIS Accountancy Solutions exists to simplify the lives of accountants by making them more effective and more productive. Through its heritage of deep domain knowledge, breadth of product functionality and innovative use of technology, IRIS delivers best-in-class accountancy software solutions for use by every practice in the UK.

Accountants trust IRIS to help guide them and their clients through the once-in-a-generation, political, legislative, economic and social disruption in the UK accountancy industry, enabling them to transform their practice, represent their interests to the UK Government and legislative bodies, and thrive in the new digital accountancy economy. 

Approximately 44% of all online submissions to HMRC and Companies House are made using IRIS software – the most efficient suite of integrated compliance, productivity and collaboration solutions for accountants to grow and evolve their practice.

IRIS Software Group

IRIS Software Group is the largest privately held software company in the UK and ranked at 227 in the Sunday Times Grant Thornton Top Track 250. It provides business-critical software and services for accountants, schools, SMEs, corporates and non-profit organisations. IRIS Software Group’s trusted solutions relieve the burden of compliance, while enabling productivity, facilitating collaboration and providing insight for UK organisations to connect and serve an increasingly new generation of customers.

More than 650,000 SMEs and 21,000 UK accountancy firms use IRIS applications. Four million parents and guardians use IRIS apps to connect with their child’s school. 620,000 UK employees are managed by IRIS HR solutions and 2.3 million UK employees are paid by IRIS payroll solutions.

They are managed under the leading Cascade, Contact Group, Earnie, IRIS, KashFlow, Keytime, ParentMail, PS Financials, PTP, Results Squared, School Asset Manager, Star and Taxfiler product brands. 

For more details visit or follow the brands on Twitter: @irisaccountants, @irispayroll, @kashflow, @keytime @CascadeHRMS, @PSFinancials, @ParentMail and @TaxfilerLtd.