MTD – more admin than expected?

[Cre8 Business]

Is anyone else finding MTD is becoming more of an admin burden than expected?

I’ve had a few conversations recently with accountants who are saying it’s not the complexity, it’s just the volume and ongoing process that’s taking up time.

Feels like one of those things that on its own is manageable, but alongside everything else just adds to the pressure.

Interested to hear how others are finding it in practice.

 

[numbersrule]

I only have two bookkeeping Clients who are Sole Traders and only one of them meets this first year's threshold.
I've spent a bit of time liaising the Accountants who will be the Main Agent while I will be the Supporting Agent.
There's been a bit of to-ing and fro-ing regarding setting up Xero in the correct order.
But it's not been too bad.
But that's only one Client!
I wouldn't like the job of managing an Accountancy Practice with 200 Sole Trader Clients who all suddenly need Quarterly Updates going forward.
I think it isn't technically difficult it's just a time management / allocation thing.
It seems to me that bookkeepers have a role to play in taking some of the work as Supporting Agents.

 

[Cre8 Business]

I only have two bookkeeping Clients who are Sole Traders and only one of them meets this first year's threshold.
I've spent a bit of time liaising the Accountants who will be the Main Agent while I will be the Supporting Agent.
There's been a bit of to-ing and fro-ing regarding setting up Xero in the correct order.
But it's not been too bad.
But that's only one Client!
I wouldn't like the job of managing an Accountancy Practice with 200 Sole Trader Clients who all suddenly need Quarterly Updates going forward.
I think it isn't technically difficult it's just a time management / allocation thing.
It seems to me that bookkeepers have a role to play in taking some of the work as Supporting Agents.

That’s really interesting and probably a good example of what a lot of firms are going to run into.

It’s not the technical side that seems to be the issue, it’s the cumulative time and coordination, especially once you start scaling that across a larger client base.

One client is manageable, but 100+ with quarterly updates becomes a completely different operational challenge.

I think your point about supporting agents is a good one, it feels like there will need to be some form of structure around who is actually handling the ongoing admin, otherwise it just ends up sitting with the main practice.

Out of interest, do you see that being something firms bring in-house, or something they look to outsource?

 

[numbersrule]

The role of Supporting Agent would apply when a Client Authorises the Supporting Agent via their ASA.
Not sure if outsourcing is the correct term.
It's more a case of an Accountant advising the Client they need to appoint a Supporting Agent / Bookkeeper because the Accountant has too much work on.
An Accountant as Main Agent is able to do all the quarterly updates themselves as Main Agent if they have the time internally and in that scenario a Supporting Agent wouldn't come into it.

 

[JEREMY HAWKE]

Its a pain in the ass

 

[Ziggy2024]

Is anyone else finding MTD is becoming more of an admin burden than expected?

No, it was absolutely expected. HMRC were informed time after time that it was going to be a lot of work for no discernible benefit in its current form.

I think the stated intention (I don't believe this is the actual intention) of creating better bookkeeping habits and minimising errors is a noble one. MTD in its current form will not achieve that.

 

[Newchodge]

Is it greater admin/cost than becoming a ltd company? Perhaps that was their motivation?

 

[DWS]

Is it greater admin/cost than becoming a ltd company? Perhaps that was their motivation?

I think the motivation for HMRC is the amount of money they are going to rake in from penalties after the end of the first year soft landing period.

 

[DavidAshdown]

The role of Supporting Agent would apply when a Client Authorises the Supporting Agent via their ASA.
Not sure if outsourcing is the correct term.
It's more a case of an Accountant advising the Client they need to appoint a Supporting Agent / Bookkeeper because the Accountant has too much work on.
An Accountant as Main Agent is able to do all the quarterly updates themselves as Main Agent if they have the time internally and in that scenario a Supporting Agent wouldn't come into it.

That’s a helpful clarification and makes sense in terms of how the roles are structured.

I think that probably reinforces the wider issue though, it’s not that accountants can’t do it, it’s whether they realistically have the time to do it at scale.

A handful of clients is one thing, but once you start multiplying that across a full client base with quarterly updates, it becomes more of an operational challenge than a technical one.

It will be interesting to see whether more firms keep it in-house or whether the supporting agent route becomes more common simply due to capacity.

Feels like this is where the real pressure is going to build rather than around the rules themselves.

 

[DavidAshdown]

Its a pain in the ass

That probably sums it up better than anything else.

I think that’s what’s interesting, it’s not that it’s overly complicated, it just feels like another layer of admin that’s landed on top of everything else.

On its own it’s manageable, but combined with everything else going on, it’s easy to see how it becomes a frustration.

Have you started dealing with it yet, or is it something you’re just aware is coming?

 

[DavidAshdown]

No, it was absolutely expected. HMRC were informed time after time that it was going to be a lot of work for no discernible benefit in its current form.

I think the stated intention (I don't believe this is the actual intention) of creating better bookkeeping habits and minimising errors is a noble one. MTD in its current form will not achieve that.

I can see that and I think a lot of people probably did flag the workload side early on.

Whatever the intention behind it, the reality now seems to be that it’s landing as an additional layer of admin for both businesses and accountants.

Whether it delivers the longer-term benefits or not, in the short term it’s the day-to-day impact that people are having to deal with.

That seems to be where most of the frustration is coming from rather than the principle behind it.

 

[DWS]

That’s a helpful clarification and makes sense in terms of how the roles are structured.

I think that probably reinforces the wider issue though, it’s not that accountants can’t do it, it’s whether they realistically have the time to do it at scale.

A handful of clients is one thing, but once you start multiplying that across a full client base with quarterly updates, it becomes more of an operational challenge than a technical one.

It will be interesting to see whether more firms keep it in-house or whether the supporting agent route becomes more common simply due to capacity.

Feels like this is where the real pressure is going to build rather than around the rules themselves.

It also depends on how much extra the existing Accountants are going to charge?
No one asked for this except for HMRC and now it is going to cost the businesses more in either money or time, oh and let’s not forget how much the software Companies will be earning.

 

[DavidAshdown]

Is it greater admin/cost than becoming a ltd company? Perhaps that was their motivation?

That’s an interesting way of looking at it.

I’m not sure it’s directly comparable to becoming a Ltd company, as that’s usually a commercial or tax-driven decision, whereas MTD is more about ongoing compliance regardless of structure.

But in terms of admin and cost, it does feel like it’s adding another layer that businesses need to deal with, whether they’re ready for it or not.

I think that’s where most of the concern is coming from, not necessarily the principle, but the additional workload it creates in practice.

Particularly for smaller businesses who don’t have much spare capacity to absorb it.

 

[DavidAshdown]

It also depends on how much extra the existing Accountants are going to charge?
No one asked for this except for HMRC and now it is going to cost the businesses more in either money or time, oh and let’s not forget how much the software Companies will be earning.

Yes, that’s a fair point, ultimately it’s going to come down to cost, whether that’s financial or time.

From what I’m hearing, it’s not just the additional fees, it’s the knock-on effect on time and capacity as well.

Even if the individual tasks aren’t complex, when you multiply them across a number of clients it starts to add up quite quickly.

I suspect a lot of businesses will end up weighing up whether they absorb that internally, pay for it externally, or try to find some middle ground.

It feels like the model firms choose is going to be just as important as the rules themselves.

 

[DWS]

Yes, that’s a fair point, ultimately it’s going to come down to cost, whether that’s financial or time.

From what I’m hearing, it’s not just the additional fees, it’s the knock-on effect on time and capacity as well.

Even if the individual tasks aren’t complex, when you multiply them across a number of clients it starts to add up quite quickly.

I suspect a lot of businesses will end up weighing up whether they absorb that internally, pay for it externally, or try to find some middle ground.

It feels like the model firms choose is going to be just as important as the rules themselves.

2026/2027 is not the problem as it is pretty much a waste of time, no penalties so who cares if all 4 mini returns are done at the end of the year!
5 of my clients who need to report under MTD for 26/27 are VAT registered so for me as their Accountant nothing extra for them to do or for me to charge as I already submit quarterly VAT returns, I do suspect some Accountants will try and charge extra though.
Next year 27/28 will be the issue when businesses above the £30k turnover are brought into the fold and penalties come into force, unfair in my opinion that one lot of businesses get a soft landing period for penalties but others do not.

 

[DavidAshdown]

2026/2027 is not the problem as it is pretty much a waste of time, no penalties so who cares if all 4 mini returns are done at the end of the year!
5 of my clients who need to report under MTD for 26/27 are VAT registered so for me as their Accountant nothing extra for them to do or for me to charge as I already submit quarterly VAT returns, I do suspect some Accountants will try and charge extra though.
Next year 27/28 will be the issue when businesses above the £30k turnover are brought into the fold and penalties come into force, unfair in my opinion that one lot of businesses get a soft landing period for penalties but others do not.

That’s a good point, I think even where there’s no immediate penalty, there’s still a record of what’s being filed and when as well as interest I believe.

From what I understand, the points system means you can effectively be building towards a penalty even if nothing happens straight away.

So it’s not completely consequence-free, just not always immediate.

Which probably adds to the argument for getting a process in place early rather than leaving it until it becomes an issue?

 

[DWS]

That’s a good point, I think even where there’s no immediate penalty, there’s still a record of what’s being filed and when as well as interest I believe.

From what I understand, the points system means you can effectively be building towards a penalty even if nothing happens straight away.

So it’s not completely consequence-free, just not always immediate.

Which probably adds to the argument for getting a process in place early rather than leaving it until it becomes an issue?

As far as I am aware there are no penalty points for the first year soft landing which some Accountants are not telling clients which is wrong in my opinion.

 

[numbersrule]

As far as I am aware there are no penalty points for the first year soft landing which some Accountants are not telling clients which is wrong in my opinion.

I don't agree that businesses should only do what is absolutely necessary to avoid penalties.

If .Gov wants to introduce a new system then that's good enough for me.

 

[Paul Kelly ICHYB]

So, if setting MTD up was easier, it wouldn't be such a PITA?

 

[DWS]

I don't agree that businesses should only do what is absolutely necessary to avoid penalties.

If .Gov wants to introduce a new system then that's good enough for me.

I don't agree that businesses should only do what is absolutely necessary to avoid penalties.

If .Gov wants to introduce a new system then that's good enough for me.

As long as you are informing your clients about the penalty situation then it does not matter whether you agree or not, it is then the clients decision not yours.

 

[MyAccountantOnline]

Is anyone else finding MTD is becoming more of an admin burden than expected?

...

Not yet.

Most of my practice clients are small limited companies, so we haven’t been and wont be as affected as other firms.

That said, I’ve still spent a fair amount of time getting everything in place and making sure all affected clients are informed and ready.

Having good software in place has been, and will I'm sure be a huge help and without that, I can see how the admin side could quickly become overwhelming.

 

[Cre8 Business]

I don't agree that businesses should only do what is absolutely necessary to avoid penalties.

If .Gov wants to introduce a new system then that's good enough for me.

That’s a fair point and I think that’s probably the right mindset to have.

The challenge seems to be less about willingness to comply, and more about how businesses and accountants manage the practical side of it alongside everything else.

In theory it’s straightforward, but in practice it’s the consistency and ongoing admin that can become difficult, particularly at scale.

Which is probably why there’s so much focus on how this is actually going to be handled day to day rather than just the rules themselves.

 

[Paul Kelly ICHYB]

The challenge seems to be less about willingness to comply, and more about how businesses and accountants manage the practical side of it alongside everything else.

For accountants, it is a revenue generation and client acquisition opportunity.

For those affected, it is a good way for them to keep better track of their business finances and cashflow. Yes, it is more work at the beginning, however, the main difference will be using a system that connects/reports to HMRC.

 

[DavidAshdown]

As far as I am aware there are no penalty points for the first year soft landing which some Accountants are not telling clients which is wrong in my opinion.

That’s fair and I take the point on the soft landing and penalty side.


I suppose even where formal penalties aren’t applied straight away, there can still be a cost in terms of interest if things aren’t kept up to date, which some businesses will naturally see as a penalty in all but name.


Either way, it probably reinforces the idea that leaving it entirely until later isn’t without consequence, even if that consequence isn’t immediate or labelled as a penalty.

 

[DavidAshdown]

For accountants, it is a revenue generation and client acquisition opportunity.

For those affected, it is a good way for them to keep better track of their business finances and cashflow. Yes, it is more work at the beginning, however, the main difference will be using a system that connects/reports to HMRC.

Yes, that’s likely to be a big part of it, how firms choose to price it and how that’s passed on to clients.


I think that’s where it becomes a balance between cost, time, and how the work is actually handled in practice.


Even if the individual tasks aren’t complex, once they’re repeated across a number of clients it becomes something that has to be structured properly, otherwise it just eats into time.


It feels like that’s where most businesses and accountants are going to have to make a call on how they deal with it going forward.

 

[DavidAshdown]

So, if setting MTD up was easier, it wouldn't be such a PITA?

I think it would help, but probably only to a point.


The setup feels like a one-off task, whereas the ongoing process, keeping things updated and submitting regularly, is where most of the pressure seems to sit, especially across multiple clients.


So even if setup was easier, I suspect the day-to-day side would still be where most of the frustration comes from.

 

[Paul Kelly ICHYB]

the ongoing process, keeping things updated and submitting regularly,

This is a basic business education thing and where lots of startups fail.

Keeping a record of sales and costs is basic stuff and entering details onto some software (or at least a spreadsheet) should be drilled into everyone!

 

[DavidAshdown]

This is a basic business education thing and where lots of startups fail.

Keeping a record of sales and costs is basic stuff and entering details onto some software (or at least a spreadsheet) should be drilled into everyone!

I agree and most business owners understand it needs to be done.

The challenge is that their time is usually better spent on running and growing the business rather than on admin and reporting.

It’s not that the requirements are unreasonable in isolation, but when you layer them on top of everything else, they can start to pull focus away from the day-to-day job of actually operating the business. Nobody started a business to be bogged down in red tape.

It feels like the key is finding a way to meet the requirements without it becoming a distraction from the core activity.

 

[Ziggy2024]

For accountants, it is a revenue generation and client acquisition opportunity.

The intention is that accountants and agents are used as little as possible. The only winners in this are the software companies who have pushed for it.

For those affected, it is a good way for them to keep better track of their business finances and cashflow. Yes, it is more work at the beginning, however, the main difference will be using a system that connects/reports to HMRC.

The information that you need to supply to HMRC is next to useless. If they did mandate proper record keeping I would agree with you, but that's not the case. I've said for as long as this has been talked about (over 10 years) that the idea is good, the reality is not.

 

[numbersrule]

As long as you are informing your clients about the penalty situation then it does not matter whether you agree or not, it is then the clients decision not yours.

I don't agree with that statement either.

In the UK, businesses are required by Law to comply with Tax Regulations.

It is simply incorrect to say that it is a Client 'decision'.

 

[DWS]

I don't agree with that statement either.

In the UK, businesses are required by Law to comply with Tax Regulations.

It is simply incorrect to say that it is a Client 'decision'.

Who said anything about not complying ?
My duty is to my clients and not HMRC!

 

[Tables Force]

I suppose even where formal penalties aren’t applied straight away, there can still be a cost in terms of interest if things aren’t kept up to date, which some businesses will naturally see as a penalty in all but name.

What 'cost of interest' are you referring to?

 

[DavidAshdown]

What 'cost of interest' are you referring to?

Fair point, I’m referring more generally to interest on late paid tax rather than anything specific to MTD itself.

My point was really that even where formal penalties aren’t applied straight away, there can still be a cost to not keeping things up to date, whether that’s financial or just additional admin further down the line.

In practice, it feels like the bigger issue for most businesses is less about penalties and more about managing the ongoing process alongside everything else.

 

[EnterprisePro]

I think that probably reinforces the wider issue though, it’s not that accountants can’t do it, it’s whether they realistically have the time to do it at scale.

A handful of clients is one thing, but once you start multiplying that across a full client base with quarterly updates, it becomes more of an operational challenge than a technical one.

It will be interesting to see whether more firms keep it in-house or whether the supporting agent route becomes more common simply due to capacity.

Feels like this is where the real pressure is going to build rather than around the rules themselves.

I think David is getting to the heart of it. Once you move beyond a small number of clients, the pressure starts to come from scale, consistency and operational control across the client base.

Each client can have a different accounting treatment, tracking structure, reporting expectation and review threshold. One client’s marketing spend might sit under overhead, while another may want similar spend tracked against product development or a specific cost centre. The person handling the work may know that at the time, but unless the logic is captured properly, consistency can drift over successive quarters.

That is where firms can get stretched. The filing itself may be manageable, but the surrounding client-by-client handling rules, decisions and review points create a growing operational burden.

The firms that cope best will probably be the ones that put proper client-level process structure in place, with clear handling rules, decision logs and tightly controlled automation around the repetitive admin. Not blind automation, but automation coupled closely to the client’s agreed treatment and review checkpoints. Otherwise, the pressure shows up in inconsistency, rework and bottlenecks across the portfolio.

 

[DavidAshdown]

That’s a really good way of putting it.

And I think that’s exactly where the tension sits for a lot of smaller businesses, they don’t naturally have that level of process or structure in place, and in many cases don’t really want to build it either.

They just want things to be done properly without it becoming another system they have to manage.

Which is probably why this is becoming less of a technical challenge and more of a practical one around how that process is handled day to day.

The firms that get it right will likely be the ones that absorb that complexity rather than passing it back to the client.

 

[EnterprisePro]

That’s a really good way of putting it.

And I think that’s exactly where the tension sits for a lot of smaller businesses, they don’t naturally have that level of process or structure in place, and in many cases don’t really want to build it either.

They just want things to be done properly without it becoming another system they have to manage.

Which is probably why this is becoming less of a technical challenge and more of a practical one around how that process is handled day to day.

The firms that get it right will likely be the ones that absorb that complexity rather than passing it back to the client.

I agree with that and I can agree a lot of smaller businesses want the freedom of running their own business without feeling like they are taking on another system to manage. Thats understandable, but it doesn't remove the governance responsibility that comes with being in business in the first place.

The structure still has to exist somewhere. Record keeping, consistency, review and control don't happen by accident, and if they aren't built into the way the process is handled, the strain just shows up later as rework, drift and errors that could have been avoided in the first place.