Are accountants ready for Making Tax Digital?
- 42% of accountants feel unprepared for the new digital tax transition.
- The majority of practices are unsure over AI's impact, highlighting a potential missed opportunity for efficiency.
LONDON, Jan. 28, 2025 /PRNewswire/ -- A new survey conducted by IRIS Software Group (IRIS) found that more than two in five accountants (42%) are not yet prepared for the upcoming Making Tax Digital (MTD) requirements set to take effect in April 2026.
IRIS' findings come despite the government's push to digitalise and streamline tax reporting. According to IRIS' survey, 44% of respondents said they felt somewhat prepared for the forthcoming MTD requirements, while only 10% considered themselves very prepared. In contrast, nearly a third (31%) said they were somewhat unprepared, with 11% admitting they were very unprepared, highlighting the industry's challenges in achieving readiness ahead of the deadline.
The survey reveals widespread concerns among accountants about the additional workload MTD compliance will bring. Many practitioners worry about how to manage the transition alongside their existing responsibilities. "Accountants are already overstretched with day-to-day work, and worry that preparing their clients for MTD will only add to this." noted Mark Chambers, Managing Director of IRIS Accountancy.
Mark Chambers continued, "While many accountants have started to take proactive steps towards compliance, there is much to be done to ensure full readiness. With just over a year left until the MTD deadline, the data from our survey underscores an urgent need for firms to adapt to ensure compliance and avoid penalties."
Preparedness begins with practices firstly understanding which of their clients will meet the MTD requirements, with guidance already available on the Gov.uk website. Secondly, accountants need to find and integrate software recognised by HMRC for MTD filing. Addressing these two steps sooner rather than later will provide time for teams to get acquainted with new systems ready for April 2026.
"Throughout MTD's phased implementation, we've been supporting accountants to digitalise records and transition away from paper-based tax returns, supporting compliance while introducing efficiencies and minimising the risk of errors. AI-driven automation also has the potential to streamline tasks such as data entry, reconciliations and invoice processing. Used effectively, it can help alleviate pressure on teams to meet the demands of busy season, or to free up capacity that can be used to plan for regulatory change like MTD", added Mr Chambers.
IRIS Elements, is uniquely positioned to help accountants overcome the challenges of MTD compliance. By automating time-consuming tasks such as data entry and record-keeping, it empowers practices to reclaim valuable hours, reduce errors, and focus on higher-value activities. The platform's seamless integration ensures compliance with HMRC requirements - including MTD - while introducing efficiencies that transform everyday workflows.
IRIS, a global provider of leading accountancy solutions, was the first software vendor to be listed as recognised by HMRC for MTD filing since the initial requirements for digital records and VAT returns via MTD-compatible software were introduced in April 2019. IRIS' recent acquisition of leading bookkeeping automation platform Dext provides a further level of security as firms move to MTD.
MTD for Income Tax Self Assessment (MTD for ITSA) is set to become mandatory for businesses, self-employed people, and landlords earning over £50,000 in April 2026. Those with an income over £30,000 will be mandated from 2027. It will require accountants to keep digital records and submit VAT returns using MTD-compatible software.
IRIS captured the findings of the study from the audience of its latest webinar Navigating the UK Accounting Landscape. The software specialist was joined by experts including Co-founder and CEO of Mazuma, Lucy Cohen, alongside representatives from HMRC and Companies House. Together, they explored the impact of regulatory change on the industry, the adoption of AI, and strategies for navigating talent shortages in the industry.
The IRIS Elements cloud suite and IRIS Accountancy desktop solution will each be upgraded to support accountants in meeting the new MTD requirements ahead of April 2026. For more information, visit: https://www.iris.co.uk/
*According to up to a poll collected via IRIS to an audience of the webinar: Navigating the UK Accounting Landscape with Lucy Cohen: Turning Busy Season Challenges into Growth Opportunities. Responses to questions range from 61 - 82 respondents. Data was collected on 20thNovember 2024.
About IRIS Software Group??
IRIS Software Group is a global provider of mission critical software and one of the UK's largest privately held software companies. IRIS provides software solutions and services for finance, HR and payroll teams, educational organisations, and accountancy firms that takes the pain out of processes and lets professionals focus on the work they love. Through simplifying, automating and providing insights on everyday mission critical tasks for organisations of all shapes and sizes, IRIS ensures customers can look forward with certainty and confidence.?
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IRIS is the largest third-party online filer with the UK Government. Ninety-three of the top 100 UK accountancy firms use IRIS software. One in six of the UK's workforce is paid by IRIS payroll offerings, and globally, six million employees receive their payslip via IRIS software every month. More than 850,000 UK employees are managed by IRIS HR solutions. Over 12,000 UK schools and academies use IRIS, with four million parents and guardians using IRIS apps to connect with their children's school; 300 million messages are delivered between schools and parents each year, and over £15 million transactional payments are processed every month. IRIS is certified as a Great Place to Work® and recognised as one of The Times Top 50 Employers for Gender Equality in 2023. IRIS is also recognised as one of the Best Workplaces for Wellbeing, one of the Best Workplaces in Tech and one of the Best Workplaces for Women.?
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To see how IRIS helps organisations get things right first time, every time, visit www.iris.co.uk or follow IRIS Software Group on LinkedIn, Twitter and Instagram.??
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