The April 2026 Making Tax Digital for Income Tax Self Assessment (MTD ITSA) implementation represents a significant operational milestone for UK accounting practices. An IRIS Software Group survey conducted in January 2025 revealed that 42% of accountants are not yet prepared for the upcoming MTD requirements.[1] For Partners and HR Directors, the principal challenge extends beyond technological infrastructure it concerns workforce capability and capacity.
The Strategic Challenge
MTD ITSA will affect businesses, self-employed individuals and landlords earning over £50,000 from April 2026, with thresholds reducing to £30,000 in April 2027 and £20,000 in April 2028.[2] For accounting practices, this regulatory change presents critical workforce implications:
- Increased client advisory demands requiring personnel with comprehensive knowledge of quarterly digital reporting requirements and MTD-compatible software systems
- Fundamental workflow transformation necessitating team members proficient in digital tax administration and capable of managing higher transaction volumes
- Capacity constraints during periods of peak demand, particularly during traditional busy season
The IRIS survey indicated that whilst 44% of respondents felt somewhat prepared for MTD requirements, only 10% considered themselves very prepared. In contrast, 31% reported feeling somewhat unprepared, with 11% admitting they were very unprepared.[1]
MTD ITSA will affect businesses, self-employed individuals and landlords earning over £50,000 from April 2026, with thresholds reducing to £30,000 in April 2027 and £20,000 in April 2028.[2] For accounting practices, this regulatory change presents critical workforce implications:
- Increased client advisory demands requiring personnel with comprehensive knowledge of quarterly digital reporting requirements and MTD-compatible software systems
- Fundamental workflow transformation necessitating team members proficient in digital tax administration and capable of managing higher transaction volumes
- Capacity constraints during periods of peak demand, particularly during traditional busy season
The IRIS survey indicated that whilst 44% of respondents felt somewhat prepared for MTD requirements, only 10% considered themselves very prepared. In contrast, 31% reported feeling somewhat unprepared, with 11% admitting they were very unprepared.[1]
The Workforce Dimension
Current market data from ICAEW's Evolution of Mid-Tier Accountancy Firms 2024 research reveals that recruitment and retention were cited respectively by 67% and 60% of firms surveyed as their main talent concern. When asked to identify the top three challenges facing their firm, 70% of respondents listed a talent-related issue as their highest concern.[3]
Broader industry analysis confirms the severity of this challenge. The Advancetrack 2025 Accounting Talent Index indicates that 94% of UK accounting firms report recruitment issues affecting their growth in 2025.[4] Furthermore, 74% of firms are unable to take on additional clients or increase billable hours due to skilled staff scarcity.[5]
The MTD ITSA implementation intensifies these workforce pressures. Practices require professionals who demonstrate:
- Advanced proficiency with MTD-compatible software platforms
- Exceptional ability to communicate complex digital requirements to clients with varying levels of technical understanding
- Capacity to manage substantially increased transaction volumes whilst maintaining quality standards
- Capability to deliver concurrent training to both colleagues and clients
Strategic Responses from Leading Practices
High-performing firms have adopted a proactive approach, implementing three key strategies well in advance of the 2026 deadline:
Recruiting MTD-experienced professionals immediately: Practices are actively securing tax and accounting professionals with demonstrable MTD VAT experience to lead internal training programmes and client education initiatives.
Establishing internal MTD expertise centres: Firms are designating specialist team members within each service line to develop advanced technical knowledge, subsequently disseminating this expertise through structured internal training frameworks.
Developing phased client communication strategies: Leading practices are implementing systematic client outreach programmes commencing in early 2025, designed to educate clients progressively and mitigate last-minute implementation pressures.
Three Strategic Actions for Immediate Implementation
1. Conduct a comprehensive MTD capability audit: Assess your current workforce's technical competencies and identify knowledge gaps requiring remediation before 2026. Evaluate which team members possess transferable MTD VAT experience.
2. Develop your 2025-2026 recruitment strategy: If workforce expansion is anticipated within the next 18 months, prioritise candidates with demonstrable digital tax experience. Competition for qualified talent remains intense in an environment where the majority of firms cannot absorb additional work due to capacity constraints.
3. Initiate client segmentation analysis: Identify which clients will be subject to MTD ITSA requirements and develop your communication and support framework accordingly. This analysis will inform accurate capacity forecasting.
Market Context
The talent recruitment market continues to experience significant pressure. ICAEW's mid-tier research indicates that 52% of respondents cited talent shortages as a key macro trend driving change in the profession.[3] Firms that execute decisive action on MTD preparation encompassing both technological infrastructure and workforce capability, will secure substantial competitive advantage.
The question facing practice leaders is not whether MTD will fundamentally alter operational models. Rather, it is whether your practice will have secured the requisite talent to lead that transformation effectively.
What is your practice's primary MTD preparation priority, technological infrastructure, workforce capability, or client education strategy?
