Less than one third of the sole traders and landlords required to comply with MTD have signed up so far (source).
The problem isn’t a lack of software. It isn’t onboarding clients onto the software either. We believe it’s something much more foundational: who’s going to do the work?
The conversation so far
Tom Herbert wrote a piece for AccountingWEB to kick off this narrative:
The focus of the piece was less about the tools (there are already over 20 HMRC approved softwares on the market) and more about a fundamental change in client interactions and how firms collect and process information.
While onboarding can be a pain – it’s already a solved problem. Signing up for software is a 5-minute job. Bank feeds and data capture solutions for sharing information have been around for decades. With MTD for VAT, we have seen the market move digital before. Whilst a shock at the time, we all got it done.
So why does this time feel different?
Who’s going to do the work?
Businesses are looking for their accountant to absorb the quarterly workload at near-zero cost. Firms are looking for clients to make decisions about workload and take on habit changes without a deep desire for the outcomes on the other side.
We need to solve the workload problem before effective change management can happen.
Around 30% of the sole traders and landlords required to comply with MTD for ITSA in 26-27 have signed up. So the other two-thirds either don’t know about it, know exactly what they need to do but are having trouble doing it, or they haven’t committed to a plan yet. Our bet is the third option. (Source: Fewer than 3 in 10 register for HMRC’s Making Tax Digital shake-up)
This isn’t because the process is difficult, or because onboarding onto software is seemingly difficult. We don’t have a clear plan for who is going to do the extra work. Will businesses take on the workload? Should accounting firms absorb this as extra compliance work? And who is going to foot the bill?
The workload is only going to go up too.
Robyn Milstead has been advancing this conversation through Accountants Therapy, a community she co-founded with Tom Bickle that’s become a genuine support network for practitioners navigating MTD. In her recent piece we heard:
“As we edge closer to the first MTD filing deadline on 7 August, a lot of us are looking at our workloads and wondering how on earth this scales next year.”
“The drop to the £30,000 threshold will bring in significantly more clients than we saw at £50,000. That’s when this really becomes a volume issue. So a little bit of nerves around feeling like the real impact hasn’t even hit yet is, in my opinion, justified.”
864,000 sole traders from April 2026. Nearly 3 million by April 2028 as the threshold drops. The first wave is the smallest wave.
Once the workload problem is solved, getting clients set up on software is easy.
Good timing
Making Tax Digital was conceived in 2015. The same year OpenAI was founded.
When the policy was written, the technology to solve the labour problem it creates did not exist. There was no way to read a photo of a receipt reliably, understand VAT legislation, match it against a bank feed, and code it to the right account. Not without a human setting up rules and managing edge cases.
That’s changed. Multimodal reasoning models can now ingest data from different modes of input simultaneously. Text, images, legislation, bank data. They produce seemingly thought-through outcomes across all of it. A receipt photographed on a building site can be read, verified against VAT rules, matched to a bank transaction, and coded.
Not in theory, this is happening on live MTD clients today. We have no choice but to allocate the extra workload to AI. Luckily and just in time, it is good enough to handle it.
Daily was always better
Many AI-forward practices are experiencing the early-mover advantage. They’re seeing MTD combined with reliable AI not as a compliance burden, but as a huge market opportunity. A chance to serve clients at a scale that was previously impossible.
Quarterly isn’t the problem. Bookkeeping is best done daily. Capture the receipt the day it’s spent. Reconcile the transaction the day it clears. Code it while the context is fresh.
You know this and obviously this has not been practical in the past. Thankfully, AI doesn’t have the same limitations.
This work has always needed doing. MTD doesn’t create a new burden, it exposes an existing shortfall.
So, the first questions are not which software vendor do I choose and how can I onboard my clients. Instead, we should be asking who is the AI partner to carry this workload?
Only once that is answered will onboarding happen smoothly.
With thanks to Tom Herbert and Robyn Milstead at AccountingWeb for advancing this conversation.
Meet the Briefcase team on stand 1740 at Accountex London, taking place at Excel on the 13-14 May 2026.
