Making Tax Digital for Bookkeepers and Freelance Accountants —
Yes, It Applies to You Too
The Irony Isn't Lost on Anyone: You Help Clients With MTD, and It Applies to You Too
Self-employed bookkeepers and freelance accountants spend their working lives helping clients navigate Making Tax Digital, but it's easy to lose track of your own position while focused on everyone else's. If you're self-employed rather than working through your own limited company, your qualifying income for MTD is assessed exactly the same way as any other sole trader: total self-employment income from your most recently filed Self Assessment return.
Retainer Clients, One-Off Work, and Software Reselling
Most bookkeepers run a mix of ongoing monthly retainer clients (predictable, recurring fees) and one-off project work (year-end tidy-ups, catch-up bookkeeping, VAT return preparation). Many also resell or take a margin on accounting software subscriptions for clients. Under the cash basis, retainer income counts when you're paid each month, and if you're reselling software with a markup, your qualifying income is the amount the client actually pays you, not the wholesale cost you pass through to the software provider.
Records for Retainers, One-Off Work and Software Commissions
Bookkeepers keep other people’s records, and the income is a mix of monthly retainers, one-off clean-ups and sometimes commission from software resellers. Each type needs its own line.
- Record each client’s retainer, and any extras, in a client ledger.
- Record one-off clean-up and catch-up projects separately.
- Record software reseller or referral commission as its own income, and keep the statement.
- Keep professional body, indemnity and software costs with receipts.
- Keep training and CPD costs, particularly for new software or rule changes.
Common MTD Mistakes for Bookkeepers
- Assuming you are exempt because you do it for clients. Your own income is tested like anyone else’s.
- Forgetting commissions. Software referral commissions are self-employed income.
- Mixing client money with your own. Client money is not your income, so keep it separate.
- Treating subscriptions as one lump. Itemise software and tools so each is easy to trace.
- Using a spreadsheet without bridging. You need compatible software to send updates.
A Sample Quarter: What the Update Looks Like
A sample quarter for a bookkeeper with a dozen small business clients.
| Q2: 6 July to 5 October 2026 | Amount |
|---|---|
| Monthly retainers | £9,600 |
| Clean-up and catch-up projects | £3,100 |
| Software referral commission | £700 |
| Total income | £13,400 |
| Software subscriptions | £980 |
| Indemnity and memberships | £540 |
| Training and CPD | £360 |
| Home office and phone | £420 |
| Total expenses | £2,300 |
| Profit for the quarter | £11,100 |
Retainers make a bookkeeper’s quarters steady, which makes the threshold easy to predict across the year.
Worked Example
Monthly retainer income (14 clients): £28,000
Year-end and VAT return project work: £9,400
Total qualifying income: £37,400 — above the £30,000 Phase 2 threshold. Neve joins MTD from April 2027. Having spent years explaining quarterly deadlines to clients, she now applies the same digital record-keeping discipline to her own bookkeeping business.
What You Can Claim
- Software subscriptions — the accounting platforms you use to serve clients
- Professional body membership — AAT, ICB, or equivalent, and CPD costs
- Professional indemnity insurance
- Home office costs proportionate to business use
- Anti-money laundering supervision fees (HMRC AMLS or professional body supervision)
- Marketing and client acquisition costs
Best MTD Software for Bookkeepers & Accountants (Your Own Business)
Software links are affiliate, help fund CheckMyMTD. Recommendations based on ease of use for self-employed income tracking.
Frequently Asked Questions
I'm a bookkeeper who helps clients with MTD. Does it apply to my own business too?
Yes, if you're self-employed, your own qualifying income is assessed exactly the same way as any other sole trader, regardless of how well you understand the rules for clients.
Does my monthly retainer income count differently to project-based work?
No, both combine into the same qualifying income figure. Under the cash basis, retainer payments count when received each month, and project fees count when paid.
If I resell software subscriptions to clients with a markup, what counts as my income?
The amount the client actually pays you is your qualifying income. What you pass through to the software provider is claimed back as a cost, but doesn't reduce your gross income figure.
Can I claim my AAT or ICB membership fees?
Yes, professional body membership and required CPD are normal allowable business expenses.
Does AMLS supervision cost count as a business expense?
Yes, anti-money laundering supervision fees required to legally operate as a bookkeeper or accountant are an allowable business expense.