1. Get your firm up to speed
It’s important to get your internal team, and in particular your fee earners, up to speed on the implications of the new mandate. And everyone needs to be kept up to date with the latest news. Some useful resources include HMRC and ICAEW, but don’t forget to look out for updates on the Xero resource centre.
As you gear up your team, think about setting up an MTD task force in your firm. This group can identify who’s responsible for onboarding, training and providing ongoing support to clients. Depending on the size of your firm, consider formal project management administration and have a sponsor or decision maker, plus a project manager. For more information, read our blog.
As part of your preparation for MTD, join us on our MTD Learning Journey. We offer a suite of education that lets you upskill and prepare for future compliance. Once you’ve completed the initial part of the learning journey, you’ll be recognised as an MTD-ready firm in Xero’s Advisor Directory. You can find out how to become an MTD-ready firm here.
2. Plan your segmentation
Making Tax Digital is a great motivator for going digital. An important part of your segmentation plan is to understand within your customer base which clients you’ll need to migrate to digital accounting and when. It is mandatory for those with revenue above the £85k VAT threshold but optional for those below the threshold.
There’s a significant opportunity to migrate desktop software users and spreadsheet users to cloud accounting software. Moving accounts online may be met by some resistance by some clients, but it’s easy to defeat any concerns when you’re armed with the right information.
Remember that for your clients already on Xero, the new MTD for VAT compatible functionality will be available to them with no additional fees and no need to upgrade.
For more information on segmentation, complete our Migration Certification which forms part of Xero’s MTD learning journey.
Moving clients from desktop software? Contact your account manager who can talk you through your conversion options. One conversion option is Movemybooks, which will migrate your clients and their historical data for free.
3. Plan for communication
Communication to clients is absolutely key. To help you with the process of communicating to your clients, we’ve developed a Practice Marketing and Communications Toolkit.
This toolkit will provide guidance about how to communicate the change with your clients, so you can make sure they’re MTD-ready with minimal fuss, well ahead of the deadline.
You’ll find some guidance and resources to help you with your marketing and communications strategy, including:
Why Xero for Making Tax Digital?
Getting your team up to speed
Communicating MTD and Xero to clients
Hosting an MTD event
4. External training
Your clients will appreciate MTD training. For many small businesses there is little awareness of MTD so include this key content in your training agenda:
Inform clients about the timing of the MTD mandate and changes to their responsibilities
Make sure clients are ready to keep digital records or, as an agent, you can do it for them
Make sure they have access to their Business Tax Account even if they have an agent working on their behalf as there are some things they may need to do through their BTA for MTD
For spreadsheet users and desktop users, make them aware of the benefits of cloud accounting software
Contact your account manager for more information on client training.
5. Sign up to the Agent Services Account
As an agent submitting MTD VAT returns on behalf of your clients, you’ll need to sign up for an Agent Services Account. This is a process managed by HMRC.
You only need one Agent Services Account for your organisation, and you can use this for all new digital services, including ones developed in the future.
HMRC encourages you to sign up immediately, but you can complete the process alongside any of the other MTD-ready steps.
Once you create a new account, you can link existing agent-client relationships to it. For more information on the process, please visit the GOV.UK website.
Xero helps practices to thrive
Digital software can help practices to grow, and there’s no better example than Xero – online accounting software that makes your processes more efficient and profitable.
Submit online VAT returns
Xero makes it easy to submit VAT returns online – with simple, accurate tracking.
Run your practice from one place
Xero HQ gives you the tools you need to get your processes humming, all in one place.
Solutions for clients of all sizes
Move your smallest clients off spreadsheets and onto Xero with Ledger and Cashbook.