ICB: Helping Bookkeepers Prepare for Making Tax Digital

16/01/2025 - MTD
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Making Tax Digital for Income Tax means a significant change for many bookkeepers and their clients. At the Institute of Certified Bookkeepers (ICB), we're here to guide and support you every step of the way. You don’t need to navigate these changes alone – we’ll ensure you’re informed, prepared, and confident in helping your clients comply with MTD requirements.

What is Making Tax Digital (MTD)? 

MTD is the UK government initiative designed to make the tax system more efficient, effective, and easier for taxpayers by mandating digital record-keeping and quarterly online submission of income tax returns. 

Where Are We Now with MTD? 

  • VAT: MTD for VAT has been in place since April 2022. All VAT-registered businesses, no matter their turnover, need to maintain digital records and submit VAT returns using compatible software. 

  • Income Tax: MTD for Income Tax (MTD IT) is set to begin in April 2026. This will initially apply to self-employed individuals and landlords with annual income above £50,000. Those earning between £30,000 and £50,000 will follow in 2027. Partnerships, trusts, and estates are expected to be brought into the fold later, but not just yet. 

What Does This Mean for You as a Bookkeeper? 

We know that MTD brings challenges, but it’s also an opportunity to showcase the essential role you play in your clients’ financial success. It’s important that you know that these submissions are NOT full tax returns, so you do not need to have completed the ICB Self-Assessment modules in order tosubmit on your clients’ behalf. You do need to be full Member of ICB to act for them (level 3 and above). 

Here are some key things to focus on: 

  1. Identify Your Affected Clients 

 Start by pinpointing which clients will need to comply with MTD IT. Self-employed individuals and landlords are your immediate priorities. Look at their income tax returns for the 2024/25 tax year to determine if they’ll be required to comply starting April 2026. 

  1. Encourage Digital Record-Keeping 

 If your clients are still using manual methods, now is the time to guide them toward digital solutions. Let them know this isn’t just about compliance – digital systems make everyone’s lives easier.  

  1. Find the Right Software 

 Choosing HMRC-approved software that suits your clients’ needs is crucial. We’ll provide guidance and training on the best options available, so you can feel confident recommending and implementing solutions. 

  1. Stay Flexible and Informed 

 MTD is evolving, and more changes may come. We’llkeep you updated on what’s happening and help you adjust your approach as needed. 

How ICB Is Supporting You 

We’re committed to making this transition as smooth as possible for you and your clients. Here’s how we’ll help: 

  • Regular Updates: You’ll receive clear, concise updates on MTD developments. 

  • Training and Resources: We are working with industry experts to create a library of webinars, guides, and templates tailored to bookkeepers. 

  • Community Support: Lean on your fellow ICB members and our network for advice and encouragement. 

  • Ongoing Advocacy: We’re in regular dialogue with HMRC to ensure your voice is heard and the challenges you face are understood. 

Next Steps 

  • Start the Conversation: Begin discussing MTD with your clients now. Reassure them that you’ll handle the technical details and guide them through the changes. 

  • Plan Ahead: Think about which clients need attention first and set realistic timelines for transitioning them to digital systems. 

  • Lean on Us:Don’t hesitate to reach out if you have questions or concerns. We’re here to help! 

You’ve Got This! 

MTD might feel overwhelming, but as a certified bookkeeper, you’ve already proven you’re capable and resilient. With ICB by your side, you’re ready to tackle this change and show your clients just how invaluable your expertise is. 

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