Making Tax Digital · UK Accountancy Firms · April 2026

Your practice is
carrying an invisible
HMRC liability.

Using Xero, QuickBooks or Sage is not sufficient for MTD compliance. If client data passes through Excel at any point before submission, the mandatory Digital Link is broken — and HMRC is enforcing penalties from April 2026.

Request a Gap Analysis Understand the risk →

HMRC Penalty Exposure — Broken Digital Link

£3,000

per entity · per quarter · effective April 2026

Affected clients (example) 20 entities
Penalty per entity/qtr £3,000
Quarters in Year 1 × 4
Total annual exposure £240,000

Based on HMRC Notice 700/22 and Schedule 55, Finance Act 2009. Figures are illustrative per firm profile.

£3,000
Per entity, per quarter
April '26
Enforcement begins
5 days
Audit turnaround
1 report
Written. Risk-rated. Actionable.

The Hidden Risk

Most firms have the software. Very few have the link.

MTD compliance requires a continuous, unbroken digital chain from source data to HMRC submission. Software is part of that chain — not all of it.

Common assumptions — and the reality
❌
"We use Xero, so we're compliant." — Compliance depends on the data journey, not the software. If a client touches the data in Excel before uploading, you have a broken link regardless of what software is at the end.
❌
"Our clients handle their own data." — You are responsible for advising on compliant workflows. A penalty on your client reflects on your practice and may engage your PI cover.
❌
"There'll be a grace period." — HMRC has confirmed enforcement from April 2026. Schedule 55 penalties apply from the first non-compliant submission. There is no informal warning period.
01

What is a Digital Link?

A Digital Link is a compliant, automated transfer of data between systems — with no manual re-entry or copy-paste at any stage. HMRC's definition is explicit: any manual intervention in the data chain breaks the link.

02

Where breaks typically occur

The most common break point: a bookkeeper exports figures to Excel for a "quick adjustment," then pastes them back into the accounting system. This is widespread, largely invisible, and fully penalisable.

03

Why this affects your whole client base

A single broken link per client per quarter. Across 20, 30, 50 clients — the liability is not theoretical. It compounds every 90 days. The only protection is knowing exactly where your breaks are before HMRC finds them.

Our Methodology

The Digital Link
Gap Analysis

A fixed-scope independent audit. We map, test, and report on the compliance status of your client workflows — delivered in five working days.

Stage What We Do Output Timeline
01 Data Journey Mapping We trace the complete movement of tax data for a sample of 5–10 client files — from source system through every handoff point to HMRC submission. Workflow map per client Days 1–2
02 Digital Link Testing Every identified handoff is tested against HMRC Notice 700/22's Digital Link definition. Manual steps, copy-paste points and Excel adjustments are isolated and documented. Risk-flagged link inventory Days 2–4
03 Gap Analysis Report A written report: every broken link identified, the specific compliance risk it creates under Schedule 55 FA 2009, and a prioritised remediation recommendation for each one. Written report — risk-rated Day 5

Your Deliverable

What you receive

One written document. Everything you need to understand your position, remediate the breaks, and demonstrate due diligence.

Digital Link Gap Analysis Report

Written · Risk-Rated · Actionable
✓
Complete workflow map — every data movement across the sampled client files, from source to submission, documented in plain English.
✓
Risk-rated breach inventory — every broken Digital Link identified, assigned a risk level (High / Medium / Monitor), with the specific HMRC compliance risk it creates.
✓
Remediation recommendations — for each breach, a practical, prioritised fix — including software solutions, workflow changes, or bridging tool guidance.
✓
Legislative references — HMRC Notice 700/22 and Schedule 55 FA 2009 citations throughout, so your report stands up to any query from a client or regulator.
✓
PI documentation trail — a formal, dated record of due diligence that significantly strengthens your position if a client challenge arises post-April 2026.

A note on Professional Indemnity

If a client receives an HMRC penalty for a broken Digital Link and you had not advised them of the risk, your PI position is substantially weakened. A completed Gap Analysis demonstrates that you identified, investigated and communicated the compliance risk within the available window. This is the document you want to exist before April 2026 — not after.

Act Before March Closes

Request your Digital Link
Gap Analysis briefing.

Leave your email and we'll send a one-page scope overview, the HMRC legislative references, and two suggested times for a 20-minute scoping call. No sales sequence.

We respond within one working day. No obligation beyond the initial conversation.