How Accounted Handles MTD Compliance for Practices

Making Tax Digital for Income Tax is the most significant change to the UK's tax administration in a generation. From April 2026, sole traders and landlords earning above £50,000 must keep digital records, submit quarterly updates to HMRC, and file an End of Period Statement and Final Declaration digitally. The threshold drops to £30,000 from April 2027.

For accountancy practices, this means a fundamental shift in workload patterns. Where Self Assessment previously required one annual filing per client, MTD requires four quarterly submissions plus year-end declarations. The compliance work has, in effect, quadrupled for affected clients.

This post explains how Accounted handles MTD compliance from the practice perspective — not the client-facing features, but the specific tools and workflows that help accountants manage the increased filing burden across their client base efficiently.

The MTD Compliance Workflow in Accounted

The quarterly submission process in Accounted follows a structured workflow designed around the accountant's role as reviewer and authoriser, with Penny handling the data preparation. This represents a fundamental shift in the relationship between accountant and bookkeeper, where AI handles the bookkeeping layer and the accountant focuses on oversight and compliance. For practices comparing platforms, our Accounted vs Xero guide covers how the MTD workflow differs between approaches.

Continuous Record-Keeping

Unlike traditional bookkeeping where records might be prepared in batches (monthly or quarterly), Accounted maintains continuous digital records for each client. As bank transactions flow in via Open Banking and the client uploads receipts via WhatsApp, Penny categorises and records them in real time.

This means that when a quarterly submission deadline approaches, the client's records are already substantially complete. There is no scramble to catch up on three months of unrecorded transactions. The data is there, categorised, and ready for review.

For clients who are less diligent about uploading receipts promptly, Penny sends WhatsApp reminders throughout the quarter. By the time you sit down to review, most gaps have been addressed through this automated prompting. The remaining gaps appear as flagged items in your review queue, so you know exactly what is outstanding.

Pre-Submission Review

Two to three weeks before each quarterly deadline, Accounted generates a pre-submission review pack for each affected client. This includes:

• Quarter summary: total income, total expenses, and net profit/loss for the quarter
• Flagged items: any transactions that Penny has been unable to categorise confidently or that have other flags
• Missing receipts: a list of transactions that require receipts but do not have them
• VAT summary: for VAT-registered clients, the VAT position for the quarter
• Comparison: how the quarter compares to previous quarters and the same quarter in the prior year

This pre-submission pack serves as your starting point for the review. You can see at a glance whether the client's records are in good shape or whether significant work is needed before submission.

The Review Process

The review itself uses the same exception-based approach described in our review queue guide. You process the flagged items for each client, approve or amend categorisations, resolve any outstanding queries, and ensure the records are accurate and complete.

For most well-maintained clients, this takes thirty to sixty minutes per quarter. For clients with more complex circumstances or less diligent record-keeping, it may take longer. The point is that the AI pre-processing has already done the bulk of the categorisation work, and your review focuses on the exceptions.

Submission Preparation and Authorisation

Once you are satisfied with the review, Accounted prepares the quarterly update in the format required by HMRC's MTD API. The submission data is presented for your final review, showing exactly what will be sent to HMRC:

• Business income for the quarter (broken down by income type)
• Allowable expenses for the quarter (broken down by expense category)
• Any adjustments

You review this summary and authorise the submission. Accounted then files the update with HMRC via the MTD API, and a confirmation is stored in the client's records. The workpapers for the quarter are finalised simultaneously, documenting the entire review and submission process.

The submission is not automatic. It requires explicit accountant authorisation. This is a deliberate design choice: the professional responsibility for the filing remains with you, and the system ensures you have reviewed the data before anything is sent to HMRC.

Deadline Management Across Your Practice

With four quarterly deadlines per client per year, plus End of Period Statements and Final Declarations, the deadline management burden for a practice is significant. A practice with a hundred MTD clients faces four hundred quarterly deadlines per year, plus year-end filings. Missing even a small percentage of these creates client issues and potential penalties.

Centralised Deadline Dashboard

The practice portal includes a deadline dashboard that shows all upcoming MTD deadlines across your client base. Each deadline is colour-coded:

• Green: on track — records are current, review is complete or not yet due
• Amber: attention needed — the deadline is approaching and the review has not been completed, or there are outstanding flagged items
• Red: urgent — the deadline is imminent and the submission has not been authorised, or there are critical issues preventing submission

This dashboard is the first thing many practice managers check each morning. It provides an immediate view of where the practice stands on compliance across the entire client base.

Automated Reminders

The system generates automated reminders at configurable intervals before each deadline:

• Four weeks before: an internal reminder to the assigned reviewer that the quarterly review should be scheduled
• Two weeks before: a more urgent internal reminder if the review has not been started
• One week before: a high-priority alert if the submission has not been authorised

Client-side reminders are handled by Penny, who prompts clients to upload any missing receipts and resolve any outstanding queries well in advance of the deadline.

These reminders are configurable. If your practice prefers to start reviews six weeks before the deadline, you can set the reminder intervals accordingly. If you have a team member dedicated to compliance filing, the reminders can be directed to them specifically rather than to the primary reviewer.

Bulk Submission

For practices managing many clients with the same quarterly deadline, the portal supports bulk operations. You can:

• View all clients with the same deadline in a single list
• Process their review queue items in sequence without switching between client records
• Authorise multiple submissions in a batch once reviews are complete

This is significantly more efficient than processing each client individually, particularly for practices with fifty or more MTD clients.

Handling Complex MTD Scenarios

Not every client fits neatly into the standard MTD workflow. Accounted handles several common complex scenarios that practices encounter.

Multiple Income Sources

Clients with income from both self-employment and property (or from multiple self-employment businesses) need separate quarterly updates for each income source. Accounted manages these as distinct business records within a single client account, with separate categorisation, review, and submission workflows.

Your practice portal shows each income source separately, so you can review the client's plumbing business and their rental property independently. The deadline tracking covers all income sources, ensuring nothing is missed.

Transitional Arrangements

Clients transitioning into MTD for the first time may have overlap periods, transitional adjustments, and changes to their reporting periods. Accounted handles the transitional calculations, including basis period reform adjustments, and presents them clearly for your review.

If a client has overlap relief to claim, the system identifies this and includes it in the appropriate submission. The transitional provisions are complex, but the system ensures they are applied correctly and documented in the workpapers.

Voluntary Quarterly Submissions

Some clients below the £50,000 threshold may choose to submit quarterly updates voluntarily, either because they want to stay on top of their records or because they anticipate exceeding the threshold in the near future. Accounted supports voluntary MTD submissions with the same workflow as mandatory ones.

Penalties and Points

The new MTD penalty regime uses a points-based system. Each late submission adds a penalty point, and when a client reaches the threshold (typically four points), financial penalties apply. Accounted tracks penalty points for each client, warns you when a client is approaching the threshold, and highlights any deadlines where the consequences of late filing are escalated.

This tracking is particularly useful for practices managing clients who have historically been casual about deadlines. The points-based system means that every late submission has cumulative consequences, and your ability to demonstrate that deadlines were met (through submission confirmations and timestamps) is your client's primary defence.

End of Period Statements and Final Declarations

Beyond quarterly updates, MTD requires an End of Period Statement (EOPS) for each income source and a Final Declaration that crystallises the tax liability for the year. Accounted manages both of these as natural extensions of the quarterly workflow.

End of Period Statement

After the fourth quarterly update, the EOPS brings together the full-year figures for each income source. Accounted pre-populates the EOPS from the four quarterly updates, identifying any adjustments needed (for example, year-end accruals, depreciation, or capital allowances that are calculated annually rather than quarterly).

Your review of the EOPS follows the same pattern as the quarterly review: exception-based, with flagged items for your attention and auto-applied items for routine entries. The workpapers for the EOPS are particularly detailed, as they represent the definitive record for the income source for the tax year.

Final Declaration

The Final Declaration replaces the existing Self Assessment return as the final step in the annual tax process. It brings together all income sources, personal allowances, tax reliefs, and calculations to determine the client's tax liability.

Accounted prepares the Final Declaration from the EOPS data, incorporating any additional information (employment income from P60s, pension income, dividend income, etc.) that has been entered during the year. The tax calculation is presented for your review before submission.

Preparing Your Practice for MTD

If your practice has not yet begun preparing for MTD for Income Tax, the April 2026 deadline is imminent. Here are the practical steps to get ready.

Identify Affected Clients

Review your client base to identify which clients have gross income above £50,000 from self-employment or property. These clients are mandated from April 2026. Clients earning between £30,000 and £50,000 are mandated from April 2027, so identifying them now allows for early preparation.

Onboard Clients to Accounted

Moving affected clients onto Accounted before the mandate begins means they are already keeping digital records and you are already familiar with the quarterly review workflow. The client onboarding guide covers the step-by-step process, and most clients can be set up in under fifteen minutes.

Set Up Your Practice Portal

If you have not already created your practice portal account, the setup guide walks through the process. Getting your team configured with appropriate roles and client assignments before the first quarterly deadline avoids last-minute scrambling.

Trial Run

Consider running a trial quarterly submission for one or two clients before the mandate begins. This lets you experience the full workflow — from continuous record-keeping through review to submission — without the pressure of a live deadline. It also gives you an opportunity to calibrate your review approach and confidence thresholds.

The Efficiency Imperative

The arithmetic of MTD is unforgiving. If you manage a hundred clients affected by the mandate, you face four hundred quarterly reviews, a hundred EOPS reviews, and a hundred Final Declaration reviews per year. At three hours per quarterly review (the traditional comprehensive approach), that is 1,200 hours of quarterly review alone — equivalent to one full-time staff member doing nothing but quarterly reviews.

With Penny's AI-assisted review, the same workload takes a fraction of the time. At forty-five minutes per quarterly review (a typical figure for well-maintained clients using exception-based review), the total drops to 300 hours — a quarter of the traditional workload.

This difference is not marginal. It is the difference between a practice that can handle MTD within its existing team and a practice that needs to hire additional staff or turn away clients. For a deeper look at the capacity implications, our guide on managing twice the clients covers the broader efficiency strategies.

Getting Started

Accounted is HMRC-recognised as MTD-compatible software. The quarterly submission workflow, EOPS, and Final Declaration filing are all built in and tested against HMRC's sandbox and production APIs.

If you are ready to prepare your practice for MTD, sign up for your free practice portal and start onboarding affected clients. The sooner you begin, the more time you have to calibrate your workflow before the first mandatory deadlines arrive.

For a comprehensive overview of how Accounted supports practices, visit our page for accountants.

You may also find our The Accountant's Guide to Recommending AI Bookkeeping helpful.

See our detailed comparison: Accounted vs Traditional Practice Management.

Related reading: Referring Clients: The Partner Programme.

Related reading: Why Accountants Should Recommend AI Bookkeeping.

Accounted gives accountants a free practice portal — manage all your clients, file to HMRC, and let Penny handle the routine work. See the accountant portal →