MTD readiness for 3–5 people practices

The entry test for this phase

What the practice needs to check
Duties start	6 April 2027
Qualifying income	More than £30,000
Tax year HMRC checks	2025–26
Practice workflow	A 3–5 person practice benefits from one shared status language and a clear hand-off for follow-up.

Illustrative practice snapshot

The figures below are an example of an anonymised review sheet, not HMRC data or a client prediction. They show how a practice can separate clear and unclear cases.

Example cohort counts for a 3–5 people practice
Cohort	Clients	Next review
£30,000 or below	27	Keep the cohort visible for the next annual review.
Over £30,000	12	Allocate a reviewer to eligibility, records and software questions.
Income unclear	4	Review exceptions together before drafting any client message.

This is a triage aid, not a tax position. Confirm the qualifying-income calculation and check exemptions or deferrals before telling a client they must use MTD.

Sources: Find out if and when you need to use Making Tax Digital for Income Tax

What to put on the review list

Agree one set of cohort labels before reviewing client records.
Assign each client review to a named team member.
Review exceptions together before sending any client communication.

Keep the boundary clear

Aggregate counts are enough for an initial practice view. Do not put client names, addresses, tax returns, or personal financial details into this demo.

Questions practices ask

Does practice size change the HMRC threshold?

No. The HMRC entry test is based on qualifying income and the relevant tax year. Practice size changes the review workflow, not the statutory threshold.

What should a 3–5 people practice review first?

Agree one set of cohort labels before reviewing client records.

Need this in your practice workflow?

We can adapt the cohort labels, sample mix and client-letter draft for your practice.

Request £250 adaptation