Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is fast approaching, bringing with it significant changes to the way many unincorporated landlords need to store and file their financial information.
HMRC estimates that around a million UK landlords will be affected by the new rules, which will require those with annual property and/or self-employment income above £10,000 to keep digital records and make quarterly submissions to HMRC from April 2024. So it’s important to start thinking about how to prepare your landlord clients for these changes as soon as possible. Here are five things you can do to help get them up to speed.
1. Segment your clients
A great place to start is by dividing up your client base and creating a specific segment for your landlord clients. This will allow you to tailor your approach and communications to their particular needs.
You can even think about splitting your landlord segment further by creating groups based on digital expertise. Tech-savvy clients can be brought up to speed relatively quickly, leaving you more time to nurture those who are less experienced using a more comprehensive communications plan.
Not only will segmentation ensure that your landlord clients receive the right kind of support, it can also help you to streamline your workflow, plan your resources and build more effective communication strategies. Check out our handy guide to segmenting your clients for MTD.
2. Design a communication plan
Once you’ve segmented your landlord clients, you can start thinking about how to share the relevant information with them in an effective way. A well-organised communications plan will not only make it easier for you to identify the key messages you want to share but also how best to communicate those messages with your different client segments.
Some important things to consider are:
- Your communication methods - while some clients are happy to receive all their information via email, others might prefer a phone call or even a meeting in person.
- Your messaging - dividing the information you want to share into various topics will help avoid overloading your clients with long emails that cover lots of complex information. You can also tailor the information based on the level of digital expertise your different audiences have.
- Your timings - laying out what information needs to be delivered and when will help give structure to your communication plan
Discover more tips on how to communicate to your clients about MTD.
3. Set targets for migrating your clients
With new MTD for ITSA rules coming into effect in April 2024, it’s vital that you give your practice plenty of time to migrate all your landlord clients to suitable accounting software, such as FreeAgent for Landlords.
Assess how many of your landlord clients will be affected by the rule changes and consider the hours needed per month to migrate them.
For example, say you have 100 clients and 18 months before the rule changes are implemented. Your practice will need to migrate six clients per month in order to meet the deadline. The industry average for migrating a client is around four hours, meaning you will need to set aside 24 hours per month for the task.
By establishing a clear plan with internal monthly goals, you are much more likely to avoid having to tackle a mountain of work just before the deadline.
4. Tailor your client training
Different clients will likely require different levels of support when it comes to preparing for MTD for ITSA. Consider running training sessions tailored to the level of client involvement - for example, one session for clients who won’t have any involvement in their bookkeeping and quarterly filings, another for those who will pick up some elements, and another for clients who will do all of it.
5. Communicate your pricing
If you decide to review the pricing of your services, make sure you take the time to explain to clients why you’re making the change. Give plenty of notice and be clear about what each of your services will cost so your clients can plan effectively. Find out more about how you can package MTD for ITSA into your pricing strategy.
For more information on preparing your landlord clients for MTD, check out our recent webinar where Jon Martingale, FreeAgent’s Accountancy Group Product Manager, talks through everything you need to help your landlord clients conquer the change.
You can also sign up for our MTD and landlords: getting your clients ready webinar on 24th May to get some more top tips on preparing your practice and landlord clients.