The new Making Tax Digital (MTD) process is an ongoing cycle, and the first wave has now given accountants and their clients real-world experience. For some, it’s been straightforward. For others, there were avoidable problems.

For everyone, there have been a few important lessons.

Don’t underestimate the work involved

Many accountants have reported that they had underestimated how long it would take to obtain the necessary information from some clients and turn it into the digital records needed for quarterly updates.

This is particularly relevant for clients who are used to providing their accountant with a box of receipts, a spreadsheet or a bank statement once a year.

The quarterly update is based on the digital records for each relevant business, so information needs to be available throughout the year. HMRC recommends creating digital records as close to the transaction date as possible.

Lesson: Don’t recreate a year’s bookkeeping every quarter. Build a process where income and expenses are captured as they happen.

Additionally, some practices were caught out by thinking that if they have X number of clients, there are X number of quarterly updates to deal with. But that isn’t necessarily how the workload works.

A client who has both a sole trade and a property business has two separate income sources, with quarterly updates required for each business. HMRC’s guidance confirms that quarterly updates are sent for each self-employment and property business.

So, one client can effectively mean multiple MTD workflows.

That distinction matters when accountants are planning resources, deadlines and fees.

Lesson: Count the MTD businesses, not simply the number of MTD clients.

Last minute is still a bad idea

MTD doesn’t require every transaction to be entered the second it happens. But that doesn’t mean you should leave everything until a quarterly deadline is approaching.

If you’re scrambling to reconstruct three months of income and expenses just before an update, you’re increasing the chances of missing transactions, losing receipts or incorrectly categorising expenses.

And if you’ve only just signed up partway through the tax year, you will need to catch up with digital records from the start of the relevant tax year.

Lesson: Start your digital records early and keep them current. “I’ll sort it out before the deadline” is not a great MTD strategy.

Software choices count

The first MTD cycle produced mixed experiences with software. Some accountants and clients had a seamless experience. Others encountered teething issues and needed to work with their software provider to resolve problems. In some cases, gaps in functionality only became apparent late in the process, resulting in firms having to find alternative software.

That’s a valuable warning.

Not every MTD-compatible product will work in exactly the same way, and different businesses have different requirements. For example, CleanBooks MTD imports your bank transactions automatically via secure, read-only open banking, appearing within seconds. Then Keeva, your built-in AI assistant, categorises your income and expenses, flags anything unusual, and prepares your quarterly update automatically.

Before you submit anything, CleanBooks shows you a plain-English summary of your quarter with a confidence checklist confirming everything is in order. Then, with one click, your update goes straight to HMRC via the official API. You get a reference number, a timestamp, and a running penalty score.

HMRC has a software finder that provides information about products and their functionality, but it can also be worth talking directly to the developer about your particular circumstances. Be sure to pick the software that meets your needs and makes your life simpler.

Lesson: Look beyond “MTD compatible”. Make sure the software you choose supports the way you actually earn, record and manage your income.

Don’t be caught out by bank feeds

One issue we’ve seen particularly clearly with some MTD sole traders and landlords is the assumption that connecting a bank account will be straightforward.

For many people, having bank transactions automatically feed into their chosen MTD platform is an important part of reducing manual data entry. But some clients found themselves unable to open a suitable bank account or establish the banking arrangements needed to get transactions flowing into their chosen platform.

For a landlord with rental income, or a sole trader who receives regular business payments, that can create a surprisingly significant bottleneck.

The problem isn’t necessarily the MTD software itself. It can sit further upstream in the process. So, get the right banking setup in place so the software can actually receive the information it needs.

Lesson: Check your banking arrangements as part of your MTD preparation, not afterwards. If automated bank feeds are important to your workflow, make sure your chosen combination of bank and software works before you depend on it.

Accountants can’t do everything

MTD has also highlighted the importance of agreeing responsibilities between accountants and clients. While an accountant can manage much of the technical side, they can’t record income they don’t know about or categorise an expense they haven’t been told about.

The first wave showed just how much time can be spent chasing information from clients who haven’t changed their bookkeeping habits.

For practices, this has also raised questions about pricing. If the actual time involved in gathering, checking and processing information is substantially greater than expected, the original fee may no longer reflect the work involved.

Lesson: Agree who does what, when information needs to be supplied and what the service includes. MTD works much better when the client and accountant share responsibility for the process.

Making MTD work

MTD itself may be less complicated than some initially feared. But the administration surrounding it, collecting information, choosing software, establishing bank feeds, understanding how many businesses each client has and keeping records up to date can create unexpected work.

For accountants, those lessons can help shape better processes, more realistic pricing and clearer expectations with clients.

For sole traders and landlords, the businesses that will find MTD easiest are the ones that establish a simple, repeatable process for recording their income and expenses and keeping everything ready for the next update.

MTD doesn’t have to mean more paperwork, more spreadsheets or more last-minute panic. With the right platform and the right process, it can become just another part of managing your business.

Jonathan Amponsah is from The Tax Guys and CleanBooks MTD. CleanBooks is a software system designed from the ground up, specifically to help sole traders and landlords to comply with MTD.