How to identify which clients need help with MTD ITSA

Written by

Parth Shah

The impending roll-out of MTD for ITSA in 2026 will fundamentally alter how your clients maintain and submit their financial data. Many may need your help when they start using accounting software to keep digital records and send paperwork to HMRC.

However, the basic question remains – who needs to use MTD for ITSA? Under the new legislation, the self-employed and landlords earning above £10,000 must submit quarterly updates, a Final Declaration, and one End Of Period Statement (EOPS) every tax year.

For the same, they need MTD-compatible software for digital record-keeping and sending updates to the taxman.

No one-size-fits-all strategy to work in MTD ITSA

Knowing how to give the best degree of support and to which clients is crucial as your accountancy practice gets ready for MTD ITSA.

When defining software options and ensuring correct information is conveyed to the right people at the right time, the recommended strategy is segmenting your clientele to help them cultivate new habits and behaviours for Making Tax Digital.

A one-size-fits-all strategy to introduce MTD might not work if you have a diverse clientele. You can divide your clients into groups based on their individual needs to make a good support plan that meets their needs. To help you and your clients migrate to MTD as smoothly as possible, we have compiled some segmentation advice in this blog post:

What is client segmentation for MTD ITSA?

Client segmentation is the process of putting your customers into groups based on things they have in common or what they need. Part of segmenting clients for MTD is figuring out whether and when your clients will need to follow the MTD rules, how ready they are, and how much help they will need from you.

What are the benefits of segmenting clients for MTD for ITSA?

Do all businesses need to register for MTD for ITSA? Depends. Where MTD is concerned, client segmentation is crucial in getting ready for it. It can help you:

  • Recognise the diverse needs of your clients
  • Determine which clients will want further coaching and guidance to prepare for MTD for ITSA
  • Create a strategy to assist clients with the MTD for ITSA transition and customise your services to meet the needs of individual clients

When should your accountancy practice commence segmenting its clients?

Developing a client segmentation plan right now is a good idea. Although MTD for ITSA may seem far off, you should prepare for the April 2026 deadline sooner rather than later. The shift will go more smoothly and without as much stress if you prepare your practice and clients well in advance.

How to segment clients for MTD for ITSA

Naturally, as an accountant, you will have to take on a more advisory role with your clients, teaching them how to use a cloud-based accounting tool, helping them file quarterly submissions, and ensuring compliance. There is a lot on your plate! Here is how you can segment your clients for MTD ITSA:

1. Collate updated information

As the first step, ensure that all your client information is up-to-date. Analyse your client list to see if any have begun using bookkeeping or bridging software without your notice. You might run a survey of your clients to learn more about their existing record-keeping practices, level of digital literacy, and familiarity with MTD for ITSA.

2. Organise your client data

Assemble the most important information about your clients on a spreadsheet. Create columns for details such as their existing bookkeeping technique, the number of employees they have, and whether they already use any tools for filing taxes or record-keeping.

3. Place scores against your clients

During client segmentation, a rating system can be beneficial. To assign points to each client based on how they meet the criteria, you may select the criteria that show how much assistance a client would require to move to accounting software.

For instance, “experience with technology” could be one of your requirements. A client who already utilises many business applications and does online banking on their smartphone would receive good scores. On the other hand, a client who does their banking in person and maintains their accounts on paper would receive a lower score, indicating that they are more likely to need help.

4. Analyse the outcomes of your segmentation

The spreadsheet and subsequent scores you draft will tell you how well-prepared your clients are for MTD ITSA. As a result, you can find out how many resources will be needed to make the switch to accounting software as smooth as possible.

The spreadsheet will indicate which software is best for your clients based on the type of business and the number of employees. You can get your practice and your clients off to a good start with MTD and avoid complications in the future by guaranteeing that you have chosen the most appropriate software for every customer.

5. Define your Making Tax Digital workflow

Once you know which client groups you have, you can determine how to familiarise each segment with MTD and transition them to your preferred accounting software. Start with the group you have specified will be the easiest to migrate as this will allow your practice to gain experience with the process.

Then you can start building a structure for all the other groups and making communication plans that will involve your clients, and give them all the required details. Your strategy could include webinars, video meetings, events, and one-on-one calls, depending on your clients’ wants and how many resources you have.

Depending on the number of MTD clients you oversee, you can categorise them all based on the potential assistance requirements for each client. For instance:

  • Class A: Will require little help – they will take care of filing quarterly updates, and you will handle the annual changes and confirmation.
  • Class B: Will require some help – they will manage the data gathering, and you will handle the confirmation and annual adjustment changes.
  • Class C: Will require additional guidance – they will probably need help collecting data consistently and may require ongoing support for submitting at the end of the year and every quarter.
  • Class D: You can offer an outsourced solution to those who cannot handle the MTD ITSA requirements or are not interested at all.

This is merely a recommended format; you can create one that works for your accountancy practice. You could also include other information like if they are using software, have a business bank account, or have any special tech needs.

In a nutshell

By asking your clients the questions mentioned above, you may get to know them better and decide how to best expose them to technologies that will benefit them in the long run. The good news is that Stellaripe offers support in MTD-related client data migration.

Our staff can ensure that your clients are ready for the transition to MTD for ITSA well before the deadline. Our experts have experience with all the commonly used software and can help you easily. Book a free consultation to get expert insights on MTD for ITSA today!

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