Do I need an accountant for Making Tax Digital compliance?

Do I need an accountant for Making Tax Digital compliance?

Making Tax Digital (MTD) can feel like one of those phrases that sounds simple until you actually have to do it. At its core, MTD is about moving tax administration into a more digital, software-led world: keeping records digitally, using compatible software to send information to HMRC, and following rules about how those records and submissions are handled. If you’re a sole trader, landlord, limited company director, or you run a small business with a busy day-to-day, the question often becomes less “Can I do this?” and more “Should I do this myself, or do I need an accountant?”

The honest answer is: you don’t always need an accountant to be MTD compliant, but many people benefit from one. Whether you do depends on your setup, your confidence with bookkeeping, how complex your tax situation is, and how much time you can realistically devote to staying on top of it. This article breaks down what MTD compliance involves, what you can do yourself, when an accountant becomes particularly valuable, and how to decide what’s right for you.

What Making Tax Digital compliance actually involves

Before deciding whether you need an accountant, it helps to understand what MTD compliance asks you to do in practice. The headline idea is digital record-keeping and digital submission through compatible software. But “compliance” isn’t just owning some software; it’s also about how you operate your bookkeeping routines and whether your records and submissions meet the required standards.

In practical terms, MTD compliance typically involves:

1) Keeping certain accounting records digitally (sales, expenses, VAT details where relevant, and the related dates and amounts).
2) Using software that can connect to HMRC to send required updates or returns.
3) Ensuring “digital links” exist between different parts of your record-keeping where required (in other words, avoiding manual copy-and-paste processes in certain circumstances).
4) Submitting information on time and retaining records appropriately.

The details vary depending on which taxes you’re dealing with. Many people have encountered MTD via VAT, because MTD for VAT has affected a wide range of businesses. But the broader MTD programme extends beyond VAT, and different timelines and requirements apply depending on whether you’re VAT-registered, self-employed, a landlord, or operating through a limited company. The direction of travel is clear: more digital record-keeping and more software-based interaction with HMRC.

Why people think they “need” an accountant for MTD

MTD can introduce new terminology and processes that feel unfamiliar, especially if you’ve managed for years with spreadsheets, paper receipts, or a once-a-year “shoebox” approach. For many, the worry isn’t the act of submitting a return; it’s the fear of doing it wrong and triggering penalties, investigations, or extra tax.

Common reasons people assume an accountant is necessary include:

Fear of mistakes. Digital submissions can feel final and unforgiving. People worry that a wrong figure sent to HMRC is harder to fix than a spreadsheet error kept in-house.

Confusion about software. There are many accounting packages, bridging tools, and add-ons. Choosing and setting them up can feel like a project.

Uncertainty about rules. MTD isn’t only about “submit online.” There are record-keeping expectations, deadlines, and rules around how data flows from your records to HMRC.

Time pressure. Business owners often have limited time. Even if they could learn the basics, they may not want to spend evenings reconciling transactions.

Existing complexity. Multiple income streams, mixed VAT treatments, overseas sales, staff payroll, or property portfolios can make bookkeeping and tax more involved.

These are all valid concerns. But they don’t automatically mean you must hire an accountant. Many people self-manage MTD compliance successfully, particularly when their finances are relatively straightforward and they choose software that suits them.

When you can realistically handle MTD compliance without an accountant

There are plenty of scenarios where you can handle MTD compliance yourself, especially if you’re comfortable with basic admin and you’re willing to establish consistent routines. If your records are simple, your transactions are easy to categorise, and you don’t have lots of tricky tax edge cases, MTD compliance can be manageable with good software and a disciplined approach.

You may be able to do it yourself if:

Your business is small and straightforward. For example, you have a single bank account, a manageable number of monthly transactions, and a clear set of expense categories.

You are comfortable using software. You don’t need to be an accountant, but you should be able to follow a setup process, connect bank feeds, and learn how to reconcile transactions.

You have good record-keeping habits. If you already capture receipts (even if it’s via an app) and you can maintain records throughout the year, you’ll find MTD far less stressful.

Your VAT position is uncomplicated (if you’re VAT-registered). If you’re on standard VAT accounting with straightforward sales and purchases and you aren’t dealing with complex VAT rules, software can handle much of it.

You’re happy to learn the basics. MTD is a good prompt to understand your numbers better. If you like having control and you’re curious, doing it yourself can be empowering.

In these cases, your main job is selecting suitable MTD-compatible software, setting up a chart of accounts/categories that makes sense, reconciling regularly, and following submission deadlines. You can also use “light-touch” support from an accountant or bookkeeper for setup and then run it yourself going forward.

Where accountants add real value beyond “pressing submit”

It’s easy to think an accountant’s role in MTD is simply to file returns. In reality, the biggest value often comes from everything around compliance: setting up systems correctly, avoiding costly errors, choosing tax-efficient approaches, and keeping you calm when the rules are confusing.

An accountant can help in several specific ways:

1) Choosing the right software and setup. The best accounting software is the one that suits your business workflow. An accountant can recommend tools that align with your transaction volume, invoicing needs, inventory, multi-currency, payroll integration, or property income. They can also help configure the system properly from day one so your VAT codes, categories, and reporting are accurate.

2) Ensuring accurate VAT treatment (where relevant). VAT is full of nuance: reduced rates, zero-rated items, exempt supplies, partial exemption, reverse charge, imports and exports, place of supply rules, and more. Even if your bookkeeping software is excellent, it can only apply the VAT logic you tell it to apply. An accountant helps you apply the right treatment in the first place and avoid mistakes that can compound over multiple periods.

3) Helping you maintain clean, audit-friendly records. MTD encourages more consistent record-keeping. Accountants can build a routine that reduces your year-end panic: monthly reconciliations, proper documentation, and processes that keep everything tidy. If HMRC ever asks questions, clean records are your best friend.

4) Planning and forecasting. Once your data is digital and up to date, you can use it to make decisions. Accountants can turn your bookkeeping into insight: cashflow forecasts, profit analysis, pricing decisions, and planning for tax bills.

5) Handling corrections, disclosures, and HMRC queries. If you’ve made a mistake, it’s not the end of the world, but it can be stressful. An accountant can guide you through corrections, explain the best way to resolve issues, and communicate clearly with HMRC if needed.

6) Saving you time and reducing mental load. For many business owners, the biggest benefit is simply not having to think about it. If your time is better spent earning money, serving clients, or managing your team, outsourcing can be cost-effective even if you could do it yourself.

Key situations where hiring an accountant is strongly recommended

Even confident DIY bookkeepers can hit situations where professional support becomes the safer option. Here are common triggers that suggest you should seriously consider hiring an accountant for MTD-related compliance and the wider tax picture.

You’re VAT-registered and your VAT isn’t straightforward. If you deal with partial exemption, international services, goods imports, reverse charge, margin schemes, the construction industry scheme (CIS), or you sell a mixture of standard-rated and exempt supplies, VAT can become complicated quickly. Mistakes can be expensive and can go unnoticed for months.

You operate as a limited company. Limited companies come with extra obligations: corporation tax considerations, directors’ remuneration strategies, dividends, benefits in kind, and statutory accounts. Even if MTD-related submissions are manageable, the overall compliance and planning value of an accountant is often higher for companies.

You have multiple income streams. For example: a combination of trading income, employment, rental income, overseas income, and investment income. Mixing these can affect allowances, tax bands, and how you should plan payments.

You’re growing quickly. If your transaction volume is increasing, you’re hiring staff, taking on premises, or expanding into new services, your bookkeeping needs can change. Accountants can help you upgrade systems and avoid chaos.

You’re behind on bookkeeping. If your records are months out of date, MTD can be the moment where everything becomes urgent. An accountant (or bookkeeper) can help you get back on track faster and more accurately than trying to fix it yourself under pressure.

You have anxiety about compliance. This matters. If the thought of getting it wrong keeps you up at night, that stress has a cost. Hiring help isn’t just about numbers; it’s about peace of mind.

You’ve had penalties or disputes before. If you’ve had issues with late filing, late payment, or HMRC queries, a professional can reduce the risk of repeat problems and handle correspondence more effectively.

DIY, hybrid, or fully outsourced: three common approaches

You don’t have to choose between “do everything myself” and “hand everything over.” Many businesses adopt a hybrid model where they keep day-to-day control but bring in professional help at key points.

1) DIY approach. You do your own bookkeeping, reconciliations, and submissions. This works well for simple businesses where you’re confident with software. The upside is lower cost and full control. The downside is the time requirement and the risk of hidden errors if you’re not sure about certain treatments.

2) Hybrid approach. You keep records and do most bookkeeping, but an accountant reviews periodically, handles year-end accounts and tax returns, and provides advice when needed. Sometimes the accountant also helps with software setup and creates a checklist for you to follow. This approach often gives the best balance: you stay involved, but you have a safety net.

3) Fully outsourced approach. You provide documents (or use software integrations), and your accountant/bookkeeper handles bookkeeping, reconciliation, and submissions. You get reports and guidance without doing the day-to-day admin. This is ideal when your time is better spent elsewhere or when your finances are complex.

Choosing the right approach depends on your confidence, how much you enjoy admin, and how consistent you can be. The biggest risk in a DIY approach is not the capability, but the tendency to postpone. MTD rewards consistency. If you’re not likely to keep up, outsourcing may be cheaper than fixing problems later.

How software changes the “need” for an accountant

Modern accounting software has made compliance more accessible. Bank feeds import transactions automatically. Receipt scanning tools capture data quickly. Invoicing can be integrated. Many platforms produce VAT reports and other summaries at the click of a button.

This reduces the mechanical burden of bookkeeping, but it doesn’t eliminate the need for judgement. Software can:

- Pull transactions in and suggest categories based on previous behaviour.
- Help you match payments to invoices.
- Store digital copies of receipts and bills.
- Produce reports and send required submissions through connections to HMRC.

But software cannot automatically understand your business context. It may not know that a certain purchase should be capitalised rather than treated as an expense, or that a specific sale has a particular VAT treatment. It can’t advise you on whether you should register for VAT, change schemes, incorporate, or adjust pricing to account for tax impacts. That’s where accountants remain useful, even in a highly digital system.

In other words: good software makes DIY more achievable, but accountants provide interpretation, strategy, and assurance.

Common MTD pitfalls for DIY filers

If you’re thinking of going it alone, it’s useful to understand the mistakes that frequently cause issues. Avoiding these can make DIY compliance far smoother.

Inconsistent reconciliations. If you don’t regularly reconcile your bank account to your bookkeeping records, errors can build up. A missing transaction here and a duplicated one there can distort your reports and submissions.

Incorrect categorisation. Misclassifying expenses can affect your taxable profit and VAT claims. Some items need special treatment, such as capital assets, motor expenses with mixed personal use, or entertainment costs.

VAT coding errors. Even a handful of incorrectly coded transactions each period can lead to underpayment or overclaiming. Over time, these errors can become harder to trace.

Mixing business and personal finances. If you use the same bank account for everything, bookkeeping becomes more time-consuming and error-prone. It also makes it harder to evidence business expenses.

Late record keeping. Doing everything at the last minute increases the chance of mistakes and the stress involved. Digital tools work best when used regularly, not as an emergency fix.

Assuming software settings are correct. If your VAT settings, tax rates, or reporting basis are configured incorrectly, the outputs may look professional but still be wrong.

These pitfalls don’t mean you must hire an accountant, but they do mean you should implement a routine and check your work. A hybrid approach often solves this: you do the regular admin, and an accountant periodically reviews and corrects issues before they become expensive.

How to decide: a practical self-assessment

To decide whether you need an accountant for MTD compliance, consider these questions honestly. Your answers will usually point clearly toward DIY, hybrid, or outsourced support.

How complex are your finances?
If you have a simple service business with straightforward expenses, DIY is more realistic. If you have complex VAT, multiple income streams, or a limited company with varied transactions, support becomes more valuable.

How many transactions do you have each month?
If you have 30 transactions a month, you can probably reconcile quickly. If you have 800, the time burden rises sharply, and errors become easier to miss.

How comfortable are you with digital tools?
If you can confidently use apps, manage bank integrations, and learn a new platform, DIY is feasible. If software setup makes you dread the process, you may lose time and make avoidable mistakes.

Will you do it consistently?
MTD is less forgiving of “I’ll do it later.” If you know you procrastinate, outsourcing or hybrid review can prevent last-minute stress.

How much is your time worth?
If bookkeeping takes you six hours a month and your billable rate is high, paying someone else may be cost-effective. This is especially true if the professional also helps you reduce tax or improve cashflow planning.

Do you want strategic advice, not just compliance?
An accountant can help you make decisions that affect profitability: pricing, structure, allowable expenses, and planning for tax payments. If you want that input, a professional relationship is valuable even if you could technically file on your own.

What “using an accountant” can look like in an MTD world

Some people avoid accountants because they imagine handing over boxes of paper once a year. MTD-friendly accountancy can be very different. In many cases, the accountant is a collaborator inside your digital ecosystem. You both see the same numbers in real time (or near real time), and the accountant can nudge you before issues become problems.

Common modern arrangements include:

Software setup and training. An accountant helps you choose and configure software, then trains you to do the basics confidently.

Quarterly reviews. You keep books monthly, and the accountant reviews periodically, fixing issues and advising on upcoming tax bills.

Bookkeeping plus compliance. A bookkeeper handles day-to-day entries and reconciliations, and an accountant handles tax submissions and planning.

Full finance function outsourcing. For growing businesses, accountants may provide management reports, cashflow support, and ongoing advisory, not just tax filing.

This flexibility is important because it means you can choose the level of help that matches your needs and budget. You don’t have to pay for a full service if what you really need is a monthly check and occasional advice.

Cost vs value: how to think about fees

It’s natural to look at accountancy costs and think, “I could do that myself for free.” But compliance is only one part of the value equation. The real comparison is often between the cost of professional support and the cost of mistakes, time, and missed opportunities.

Consider the potential “hidden costs” of DIY:

- Time spent learning software and tax basics.
- Time spent reconciling, chasing receipts, and correcting errors.
- Stress and distraction, especially close to deadlines.
- Risk of penalties for late submissions.
- Risk of overpaying tax because you missed allowable deductions or didn’t plan efficiently.
- Risk of underpaying tax because something was coded incorrectly, potentially leading to interest and penalties.

On the other hand, hiring an accountant doesn’t guarantee perfection, and it doesn’t eliminate your responsibility. You still need to provide accurate information and stay engaged. The best outcomes happen when the accountant-client relationship is proactive: good communication, timely records, and clear roles.

If cost is your main concern, the hybrid model is often the sweet spot. You keep your costs down by doing routine admin, and you reduce risk by paying for professional review and annual tax work.

Practical steps if you want to stay compliant without an accountant

If you decide you don’t need an accountant right now, you can still set yourself up for success with a few practical habits.

Choose one core system and stick to it. Switching tools frequently creates confusion and can break consistency. Pick software that fits your needs and commit to learning it properly.

Separate finances. Use a dedicated business bank account and, if appropriate, a dedicated card. This makes reconciliation faster and reduces errors.

Reconcile weekly or monthly. Treat reconciliation as a routine, not a rescue mission. Short sessions are easier and more accurate than marathon catch-ups.

Capture receipts immediately. Use a receipt capture app or the built-in feature in your software. Don’t rely on memory.

Create a simple checklist. Include tasks like “reconcile bank,” “review uncategorised transactions,” “check VAT codes,” and “run the report.” A checklist reduces missed steps.

Keep notes on unusual transactions. If you buy something unusual or have a one-off deal, add a note to your records. Future you will thank you.

Schedule time ahead of deadlines. Don’t aim to submit on the final day. Build in buffer time to review and fix issues.

This approach can work very well. Many business owners successfully handle MTD compliance themselves using these habits and a bit of discipline.

Practical steps if you want an accountant’s help

If you decide that professional help is right for you, you can make the relationship smoother and more cost-effective by approaching it strategically.

Be clear about what you want. Do you want full bookkeeping, VAT submissions, year-end accounts, tax planning, or just a quarterly review? Clarity helps you avoid paying for services you don’t need.

Ask how they work with software. A good MTD-ready accountant should be comfortable with digital platforms and able to guide you through setup and workflow.

Discuss responsibilities. Who reconciles the bank? Who codes transactions? Who reviews VAT codes? Who files what and when? Clear roles prevent misunderstandings.

Provide records on time. Accountants can only work effectively with the information you give them. Timely, organised records reduce fees and improve outcomes.

Use the accountant for advice, not just compliance. If you’re paying for expertise, ask questions. How should you plan for tax? Are you missing allowances? Should you change how you pay yourself? This is where the value can multiply.

Accountancy support isn’t one-size-fits-all. The best fit is usually someone who understands your industry, communicates clearly, and can support you digitally without making you feel out of your depth.

So, do you need an accountant for MTD compliance?

You don’t necessarily need an accountant to be compliant with Making Tax Digital, especially if your finances are straightforward and you’re comfortable with software. Many small businesses and individuals can manage their own digital records and submissions effectively, particularly with modern accounting tools that automate much of the admin.

However, an accountant becomes increasingly valuable as complexity rises: VAT nuance, limited company obligations, multiple income streams, higher transaction volume, or simply a lack of time and headspace. Even if you can do it yourself, you may decide that outsourcing is worth it for peace of mind, accuracy, and the potential for better tax planning.

For many, the best answer is a hybrid approach: handle routine bookkeeping with software, but have an accountant set things up, review periodically, and manage year-end and tax planning. That way you stay compliant, reduce risk, and still keep control over your day-to-day finances.

Ultimately, MTD isn’t just a compliance hurdle. It’s an opportunity to run a cleaner, more informed financial system. Whether you do that alone or with an accountant depends on your confidence, complexity, and priorities. The right choice is the one that keeps you compliant without draining your time, your focus, or your peace of mind.