The main professional bodies have published ‘Topical guidance covering the application of professional standards to the provision of MTD for Income Tax services’. This aims to provide clarity on how Professional Conduct in Relation to Taxation (PCRT) will apply to Making Tax Digital for Income Tax.
Professional Conduct in Relation to Taxation (PCRT) sets out the fundamental principles and standards of behaviour that all members and students of the PCRT bodies (AAT, ACCA, ATT, CIOT, ICAS, ICAEW and STEP*) must adhere to in their tax work.
A working group was established by the PCRT bodies to draft topical guidance on the application of PCRT to the requirements of Making Tax Digital (MTD) for Income Tax (IT). In readiness for the mandation of MTD for IT from April 2026, interim guidance has now been published.
This applies to anyone who is:
- A member of a professional body that subscribes to PCRT.
- Providing any service that contributes directly or indirectly to the preparation, submission, agreement of, or advice on any or all aspects of an individual’s digital record keeping, filing of quarterly updates and the year-end tax return under MTD for IT.
Some of the issues discussed by the interim guidance include:
- There has been some suggestion of submitting four quarters of nil figures in quarterly submissions (even though there were income and expenses in those quarters) and including all entries in the year-end tax return. The guidance states this would not be the correct way to approach MTD for IT under PCRT principles.
- The PCRT bodies do not expect members to make ‘nil’ quarterly updates where this is factually incorrect, or include estimated figures based on the previous quarter/year, or submit quarterly updates based on partial information (except for where this is in line with HMRC easements or guidance).
The PCRT bodies state they expect this to be an iterative process, and future updates will be made to the guidance document as necessary.
The guidance (see External links, below) takes the form of ten frequently asked questions:
- What is expected of PCRT body members in respect of the requirements of MTD for Income Tax? Do the PCRT standards for submission of tax information and tax filings apply to MTD for Income Tax?
- I am an employee of a firm and I am not tax-trained. Does PCRT still apply to me in my work on MTD for Income Tax?
- I will be submitting the quarterly updates on behalf of my clients. How accurate should the quarterly update submissions be?
- Upon reviewing my client’s records before filing the quarterly update, I am unsure what a line item relates to. Should I delay filing the quarterly update?
- Having read the technical guidance issued by HMRC, I believe that it will be sufficient to submit ‘nil’ quarterly updates or estimates on behalf of clients and include details of their actual income and expenses only in the year-end tax return. Is this acceptable under the standards of PCRT?
- I noticed a digital record-keeping error following the submission of the Q3 update. Should I correct this on the Q4 submission?
- What implications will there be for members if it transpires that there appear to be substantial changes in data submitted across the quarterly submissions and year-end tax return? Will HMRC take steps against members if they see significant adjustments having to be put through?
- I have been engaged to submit the quarterly updates and the year-end tax return. What data checking must I undertake before submitting the quarterly updates? Should the checks that I carry out on the data at the quarterly stage be the same as the checks I make when making the year-end tax return submission?
- In cases where a third-party bookkeeper prepares the data for the quarterly submission and I have been engaged to submit the quarterly updates, are there instances where we can just accept the data provided by the bookkeeper?
- What are members’ responsibilities when transitioning clients from one agent to another?
*Association of Accounting Technicians (AAT), Association of Chartered Certified Accountants (ACCA), Association of Taxation Technicians (ATT), Chartered Institute of Taxation (CIOT), Institute of Chartered Accountants of Scotland (ICAS), Institute of Chartered Accountants in England and Wales (ICAEW) and Society of Trust and Estate Practitioners (STEP).
Useful guides on this topic
Professional Conduct in Relation to Taxation
The Professional Conduct in Relation to Taxation (PCRT), adopted by the main professional accounting and tax bodies, sets out the professional standards that are expected of a member when undertaking tax work.
MTD: Toolkit for accountants
What is the current timetable for Making Tax Digital (MTD)? When will MTD for Income Tax become mandatory? How will it work? Which clients will be excluded? What planning needs to be undertaken?
External links
MTD for IT, PCRT guidance: