Why MTD IT is becoming a service model decision
Key Takeaways
MTD IT is forcing practices to define who does what. The real decision is no longer whether quarterly updates can be filed, but who owns each step of the process.
Service models will need to vary by client. Different levels of capability, confidence, and cost sensitivity mean practices cannot apply one MTD IT model to everyone.
Responsibility will shift as clients adapt. Even if roles are agreed at setup, clients and practices will rebalance ownership as the quarterly rhythm becomes clearer.
Quarterly updates create more flexibility, but not less oversight. Because updates are cumulative, practices can let clients do more, provided accountants still monitor submissions, corrections, and deadlines.
Software must support the service model in practice. To make MTD IT work at scale, firms need tools and MTD softwares that reflect client-by-client responsibility without giving up control.
Making Tax Digital for Income Tax (TD IT) is here. Practices are onboarding clients, completing HMRC setup, checking obligations, and building the quarterly rhythm. With the first submission deadline opening in July, the focus is shifting from whether the update can be submitted to who is responsible for getting it there.
A quarterly update has four stages
A quarterly MTD IT update includes four stages: data collection, bookkeeping, review, and submission to HMRC. In MTD IT, the service model defines who is responsible for each stage of the quarterly update.
That allocation defines the work the practice is taking on, the time required, and the price the service needs to carry. More client ownership can create a lighter-touch model, but only where the client is capable of carrying that responsibility.
Clients will not all use the same model
Clients have different levels of financial fluency, interest in their numbers, and sensitivity to the cost of additional accounting work. They will sit at different points on the service model spectrum.
At one end, the practice owns most of the operational loop: data collection, bookkeeping, review, and submission. That may include work around the records themselves, such as chasing missing information or dealing with third parties on the client’s behalf.
At the other end, the client owns more of the process. They keep records moving, check the quarterly position, and may submit the update themselves. Between those points are the models most practices will need to define client by client.
Responsibility will move through the year
The model agreed at setup will not always hold in practice. As clients learn the quarterly rhythm, some will take on more of the work. Others will decide they want the practice to do more.
Even where responsibilities are clear, work will drift between client and practice as both parties learn what is involved.
Quarterly updates change the review burden
MTD IT quarterly updates are cumulative and do not represent the final tax position submitted to HMRC. Errors and omissions can be corrected in later updates or at finalisation.
Accuracy still matters. But the review burden is different from the final position. That gives practices more room to let clients take on parts of the process that would traditionally have sat firmly with the accountant or bookkeeper.
That only works if the advisor remains in an oversight position. The client can own more of the work, but the advisor still needs visibility of what is being prepared, submitted, and corrected over time.
The advisor always needs oversight
Client-led preparation in MTD IT does not mean the advisor steps out of the process. Regardless of the service model, the advisor remains the expert and the advisor.
That means the advisor still needs visibility of the quarterly position, submission status, and upcoming HMRC deadlines. They also need the ability to step in if the client cannot complete the submission themselves, particularly at deadline time where the risk of penalties becomes real.
Client submission should not remove the advisor's ability to submit. It should give the client the option to submit as well.
HMRC submission needs to reflect who actually submits. In MTD IT, submissions must reflect the true filer: agents submit as agents, and clients submit as clients under HMRC rules.
That distinction matters. It lets the advisor give capable clients more responsibility without losing control of the client relationship or the ability to intervene when the model breaks down in practice.
The service model has to exist in the software
The service model cannot just sit in the engagement letter. It has to shape how the client works through the quarter.
That is why Solo lets practices enable client access to reports and, where appropriate, client submission. Those controls can be set separately, so the practice can match Solo to the service model agreed with the client, then adjust as that model changes.
Solo remains practice-led. Client submission is not a move away from that. It is how practices support different MTD IT service models without losing oversight.
