Making Tax Digital
MTD PLANNING CHECKLIST FOR AGENTS
PREPARING YOUR CLIENTS
 MAKE CONTACT WITH YOUR CLIENTS
Now is a good time to get in touch with your clients
to let them know that MTD is on the horizon. We
appreciate that for some practices it would be very
time consuming to telephone every single client so
we have put together a factsheet which you can top
and tail with your firm’s details. We suggest emailing
this as a PDF document with a covering email, perhaps
offering a follow up phone call in the future once you
have assessed which clients will be impacted first.
quarters so that the obligation to send updates to
HMRC are on the same quarterly cycle, rather than
having obligations falling into different months. This
could have a significant impact on agent workloads.
 TYPES OF INCOME
Now that you know which clients will be affected in
2018/19 you can start to categorise them according to
the complexity of their affairs. This will help you plan
how much time and resource you need to put into
managing each client. Consider segmenting as follows:
 SEGMENT YOUR CLIENTS
• Clients with one business and no other income.
To manage the transition to quarterly digital
reporting you will need to segment your clients
and prioritise those who are affected first. We have
suggested some ways of doing this below.
• Clients with one business and some rental income.
 START DATE
Start by identifying which clients are exempt from
MTD, which will be in from April 2018, which will
benefit from the one year deferral to April 2019
and those that are not affected until April 2020.
To determine when your clients are in MTD you
will need to know the client’s expected turnover
from each business (remember, partnerships are a
separate business and the rules are applied to them
in isolation), rental income (or their share of it if jointly
held property) and accounting period. Detailed rules
can be found on our website, see icaew.com/mtd.
If you have clients with income below the exemption
threshold it will be important to keep an eye on
them as the following year their turnover may
increase, bringing them into the MTD regime.
A LIGNMENT OF QUARTERLY
 REPORTING DATES
Clients with multiple trades and/or rental income
sources are at risk of having quarterly update
obligations with dates that are not aligned for each
source. If they are also VAT registered the VAT update
cycle may not be aligned with the dates for income
tax. Early consideration should be given to whether
to change clients’ accounting periods and/or VAT
• Clients with multiple businesses and rental income.
• C
lients with business income, rental income and
other income such as interest and dividends.
 BANKING
Some clients may benefit from reviewing their banking
arrangements. For example, if they are not using a
business bank account or don’t have a separate bank
account for each MTD income source, they may not be
able to use bank feeds successfully. Separate accounts
might be needed for each business under MTD.
 DIGITAL ABILITY
Some agents might have clients who are used to using
excel or accounting software. Other clients might
favour keeping their records on paper. You could
identify the clients who you feel will be less able to
cope with the requirements of MTD and consider how
to work with them going forward, perhaps pointing
them in the direction of an online excel training course
or thinking about whether you will need to provide
bookkeeping services going forward. For more on the
use of excel, see icaew.com/mtd.
Either way it will be vital that you set your clients up and
talk through how the new rules will impact what they
do and when.
icaew.com/mtd
Making Tax Digital
MTD PLANNING CHECKLIST FOR AGENTS
PREPARING YOUR CLIENTS
 SERVICES YOU WILL OFFER
 FEE STRUCTURES
It will be necessary to review your firm’s current
offering and consider whether you wish to offer some
‘standard’ packages to clients or will tailor your services
to match the client’s exact needs. Some things to
consider will be:
How will you bill your clients going forward? You might
find that you need to move away from a fixed fee basis
and charge your client for the work undertaken for
each quarterly submission with a final payment due
on completion of the End of Year Declaration. It is
inevitable that clients will be concerned about a rise in
fees so make sure you have the conversation early on.
• W
ho will record the transactions digitally in
accounting software? If your firm does not currently
offer a bookkeeping service, would this be a new
stream to bring on board?
• W
ho will assist and train clients to make the transition
to using accounting software? Is this a new service
you can provide?
• W
ho will submit each quarterly return? Does your
client feel able to do so?
• H
ow will you provide ongoing support to clients? Will
you communicate one-to-one or via your website/
webinars/emails/tweets.
 SOFTWARE
 INTERNAL RESOURCES
Staffing considerations are vital especially if your firm
will take on more bookkeeping work and data entry.
Take time to review the skill level of your employees
and assess whether you need to take on some more
junior members of staff.
 ENGAGEMENT LETTERS
Engagement letters will need updating and ICAEW
Tax Faculty will communicate more information in
due course.
Your firm will need to submit client information to
HMRC via third party software. Various software houses
will be providing MTD compatible software and you will
need to decide which software your firm will support
and communicate this to clients. At the moment very
little is known about the software choices but HMRC
intends to publish a software register on GOV.UK which
will confirm the software applications compatible
with MTD obligations. A key issue will be whether the
software links easily with the accounting software being
used by clients. We will be updating our web pages
once more information is available, see
icaew.com/mtd.
 YOUR MTD BRAND
Do you have a page on your website with the
latest MTD developments? Depending on the size
of your practice we suggest appointing one individual
within the firm to lead on MTD matters and
disseminate information to all staff members. You can
keep up to date by visiting our dedicated web pages
icaew.com/mtd and watching the demystifying MTD
webinar series.
For all the latest MTD
developments and more practical
resources, see icaew.com/mtd
icaew.com/mtd