Do I Need MTD If I Have an Accountant?
Your accountant files your tax return, so MTD is their problem, right? Wrong. Here is exactly what sole traders must do themselves under Making Tax Digital.
Your accountant handles your tax return every January, so Making Tax Digital is their headache, not yours. That assumption, held by a significant number of sole traders across the UK, is about to become very expensive.
- Having an accountant does not exempt you from MTD for Income Tax. The obligation sits with you, the sole trader, not your accountant.
- From April 2026, sole traders earning over £50,000 must keep digital records and submit quarterly updates to HMRC, regardless of whether they use an accountant.
- Your accountant can help with MTD compliance, but you must still use MTD-compatible software to capture your records throughout the year.
- If your accountant has not yet raised MTD with you, that is a conversation worth having now, not in March 2026.
- Low-cost MTD apps like TapTax can handle the digital record-keeping side without requiring an accountant's involvement at all.
- MTD for Income Tax (MTD ITSA)
- Making Tax Digital for Income Tax Self Assessment is HMRC's mandate requiring sole traders and landlords with qualifying income to keep digital records and submit quarterly summaries of income and expenses, plus an End of Period Statement and Final Declaration each tax year. It replaces the traditional annual Self Assessment return for those within scope.
The Myth That Could Cost You £200 in Your First Year
Let us be direct about where this myth comes from. For decades, the Self Assessment system has allowed a perfectly sensible division of labour: you earn money, you keep some receipts, you hand a carrier bag of paperwork to your accountant in January, and they sort it. HMRC gets its return, you get a bill or a rebate, and everyone moves on.
MTD for Income Tax does not work that way. It is not a new filing format that your accountant will quietly adopt on your behalf. It is a fundamental change to how records must be kept throughout the year, and that process starts with you.
The penalties for getting this wrong are not trivial. HMRC's points-based penalty system for MTD means that missing quarterly submissions accumulates penalty points, with a £200 fine triggered once you reach the threshold. Miss enough, and you are looking at further daily penalties on top. That is not a risk worth carrying because you assumed someone else had it covered.
What Your Accountant Can and Cannot Do for You Under MTD
This is the crux of it, and it is worth being precise.
What your accountant can do
Your accountant can act as your agent within HMRC's systems. They can review your quarterly figures before submission, make corrections, submit the End of Period Statement on your behalf, and handle your Final Declaration (the equivalent of today's Self Assessment return). Many accountants are already investing in MTD-compatible practice management software that connects to their clients' records.
They can also advise on which expenses to categorise how, flag potential issues, and provide the kind of professional judgement that no app can replicate. A good accountant remains genuinely valuable under MTD.
What your accountant cannot do
They cannot keep your records for you in real time. That is the structural shift MTD introduces. Under Self Assessment, your accountant could reconstruct a year's worth of transactions from a bank statement and a shoebox. Under MTD, the quarterly submissions are meant to reflect records that have been maintained digitally throughout the quarter, not assembled retrospectively.
More specifically, HMRC requires that the data in your quarterly updates flows from MTD-compatible software with a direct digital link. Your accountant cannot simply type figures into a submission portal without that underlying digital record. The law requires the digital connection, not just the numbers.
In short: your accountant can drive the car, but you need to make sure the car exists and has fuel in it.
The Question Behind the Question
When sole traders ask "do I need MTD if I have an accountant", they are usually asking one of three things:
1. Do I need to buy software?
Yes, almost certainly. HMRC has not built a free MTD tool for sole traders (more on that in a moment). You will need MTD-compatible software to capture your income and expenses digitally. Your accountant may provide access to a solution as part of their service, or they may expect you to maintain your own records and share them. Clarify this now.
2. Do I need to submit anything myself?
Potentially not, if your accountant is set up as your agent and you have authorised them to submit on your behalf. But you still need to ensure your records are in the right format and shared with them in time for each quarterly deadline. The deadlines are the 7th of August, 7th of November, 7th of February, and 7th of May. Miss the window for your accountant and you have missed the window full stop.
3. Can I carry on as I am?
No. The annual Self Assessment return will no longer exist for sole traders within MTD's scope. The rhythm of your tax life changes from once a year to five times a year. Your accountant can absorb much of that additional workload, but they will almost certainly charge more for it.
Why HMRC Did Not Just Let Accountants Handle Everything
This is a fair question, and the honest answer involves a mix of policy intent and commercial interest.
HMRC's stated rationale for MTD is to reduce the £5.5 billion annual tax gap attributable to taxpayer error. The theory is that if sole traders record transactions closer to when they happen, errors and omissions will fall. Quarterly reporting is meant to be a prompt, not just a compliance exercise.
But critics, including the Office of Tax Simplification before it was abolished, pointed out that the compliance cost for small businesses was likely to outweigh the tax gap benefit at the lower income thresholds originally proposed. HMRC's own impact assessment acknowledged that the average sole trader would face additional costs to comply.
There is also the software market. HMRC chose not to build a free, government-operated MTD submission tool for income tax (unlike VAT, where free options exist). That decision created a market for commercial software providers, some of whom charge upwards of £30 per month for products aimed at sole traders who might need a fraction of the features. Whether that was an oversight or a deliberate policy choice is a question worth asking.
For sole traders who simply need to log income and expenses and send a quarterly update, the cost need not be high. TapTax was built specifically for this use case, with pricing that does not assume you are running a limited company with a finance team.
What to Ask Your Accountant Right Now
If you are a sole trader earning over £50,000 and you use an accountant, here are the specific questions to put to them before April 2026:
- Are you registered as an MTD agent with HMRC, and will you be authorised to submit my quarterly updates?
- What MTD-compatible software do you expect me to use, or will you provide one?
- How do you want me to share my records with you each quarter, and by what date before each deadline?
- How much more will your fees be under MTD, given the additional submissions?
- If I use my own software, which formats or integrations work with your system?
If your accountant cannot answer these questions clearly and confidently, that is useful information too.
If Your Accountant Charges More Than MTD Saves You in Errors
Some sole traders will do the maths and conclude that paying an accountant to manage five annual submissions, plus the cost of software, plus a potential fee increase, costs more than it saves.
For straightforward self-employment income with standard expenses, that calculation might well be right. MTD-compatible apps like TapTax are designed for the sole trader who does not have complicated tax affairs, does not want to learn accounting software, and simply needs a compliant way to record transactions and submit quarterly updates. If your accountant's main value to you was filing that annual return, an app may genuinely be sufficient.
This is not a criticism of accountants. For sole traders with multiple income sources, capital allowances claims, complex expenses, or any HMRC enquiry risk, professional advice remains valuable. But MTD is partly being sold to sole traders as a simplification, and for some, the simplest response really is a low-cost app and no accountant.
The April 2026 Timeline Is Not Flexible
HMRC has delayed MTD for Income Tax multiple times since it was first announced for 2018. Many sole traders, and some accountants, have developed a habit of assuming the next delay is coming. It is a reasonable prior, given the history. But the April 2026 date for those earning over £50,000 has now survived successive Budgets and a change of government, and the infrastructure build is well advanced.
If you earn over £50,000 from self-employment or property, plan as though April 2026 is real. If there is another delay, you will simply have been organised early. If there is not, you will not be scrambling in February 2026 alongside the majority of your competitors.
Sole traders in the £30,000 to £50,000 bracket come into scope in April 2027, so you have slightly more runway, but the same principle applies.
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The Bottom Line
The question was whether you need to do anything about MTD if you have an accountant. The answer is that you cannot delegate the obligation itself, only the execution of parts of it. You still need digital records. You still need MTD-compatible software. And you still need to make sure your accountant is actually set up to handle this on your behalf, because a surprising number are not yet ready.
That carrier bag of January receipts will not survive contact with April 2026. Start the conversation with your accountant now, or if you would rather manage things yourself, find out how TapTax handles the digital record-keeping without the complexity.
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