What ‘making tax digital’ means for accounting firms (2026)

Making Tax Digital (MTD) for Income Tax is now live. From 6 April 2026, sole traders and landlords with income above £50,000 are required to keep digital records and submit quarterly updates to HMRC. Around 780,000 taxpayers are in scope from this April, with a further 970,000 joining when the threshold drops to £30,000 in 2027. For accounting firms and providers of outsourced accounting and tax services with any meaningful volume of sole trader or landlord clients, that's a significant portion of the book, and the compliance rhythm has fundamentally changed.

What was an annual event is now a rolling quarterly workflow. The deadline pressure is now continuous instead of once a year.

What MTD means for capacity at accounting firms

Firms that have historically structured their teams around year-end peaks are now carrying that same volume four times over, across a much larger portion of their client base. Four submission cycles per client per year means four times the client touchpoints, four times the deadline management, four times the exception handling, all running alongside existing workloads.

The accounting firms feeling this squeeze most acutely are the ones still running compliance on email, shared inboxes and spreadsheets. Work lands with whoever opens their inbox first. Deadlines live in someone's head. There's no real-time view of what's in progress, what's stuck, or where capacity is thin. In that environment, quarterly MTD submissions don't just add volume, they expose every gap in the operation.

It’s worth noting that research by Azets found 94% of businesses were either unprepared or only partially prepared for this transition. That's clients turning to their accounting firms for support, often at the same time.

MTD and the compliance vs. advisory squeeze

There's a bigger issue sitting underneath the capacity problem. Compliance work expands to fill available capacity if it's not properly managed, and MTD is adding volume to an already pressured system.

BDO UK reported that automating parts of their tax preparation workflows allowed them to repurpose staff into client-facing advisory roles. That's the right way to think about this. Getting the compliance grind under control isn't just about keeping pace with submissions, it's about protecting the capacity your best people need to do the work that grows the business.

Accounting firms and providers of outsourced accounting and tax services that absorb the MTD volume without re-engineering their workflows will find their advisors increasingly buried in processing work. Partners firefighting instead of advising. Margins flat despite growing client numbers.

Where orchestration fits into Making Tax Digital

Orchestration is what makes quarterly submission workflows manageable at scale. Every client's submission cycle tracked in one place, with deadlines visible across the team. With orchestration in place, work gets routed to the right person based on capacity and skill. Exceptions are flagged before they become missed deadlines. And, there's real-time visibility into what's in the pipeline and where things are stuck.

MTD isn't the last regulatory shift that will add volume to accounting firms plates, the threshold drops again in 2027 and 2028. The firms building proper workflow foundations now will be better placed for whatever comes next, and they'll have more of their best people doing the work that actually grows revenue.