The Modern Accountant | 📊 MTD: How AI Tools Are Saving Accountants Time

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Editors Pick 📣

💼 Accounts Payable: From Fragmented to Fully Automated

Only 1 in 3 firms have automated their accounts payable processes — and according to Modulr’s Product Lead Joe Lines, that’s costing accounting professionals over 40 days a year in manual admin.

At Accountex 2025, Joe shared how fragmented workflows, approval bottlenecks, and switching between systems continue to hold firms back — and how automation can reclaim both time and control.

📖 Read the full piece on how accountants are transforming AP with automation

🌟Sector Spotlight

PAYMENTS MODERNISATION

Digital Payments Surpass Paper Checks in Security, Cost, and Operational Efficiency

Paper cheques are fast becoming relics in a digital-first economy, and the federal government’s pivot away from them is more than a nod to modernisation—it’s a necessary overhaul. The facts are hard to ignore: paper cheques are slow, costly, and 16 times more likely to be lost or stolen than digital payments. Their use burdens taxpayers with hundreds of millions in avoidable expenses, while dragging business efficiency into the past.

However, inertia lingers in private sector payments, with 75% of companies still clinging to cheques despite better alternatives. Digital payments not only slash costs and fraud risks, but provide transparency and a real-time audit trail—benefits that can’t be overlooked. For industries like real estate and construction, digital collaboration platforms are already streamlining transactions and enhancing capital flows. It’s time for businesses to treat digital payments as a strategic priority for resilience and agility—not just a back-office upgrade.

ACCOUNTING TECHNOLOGY

Auditable AI Systems Enhance Transparency And Accountability In Modern Accounting Practices

Trust in accounting AI hinges on its auditability, especially as CFOs shoulder the final risk for automated outputs. While AI promises efficiency—offering relief from talent shortages and heavy workloads—it introduces challenges in transparency and compliance. Traditional approaches like manually retracing every AI-generated calculation are unsustainable. Expecting auditors to master complex algorithms isn’t feasible either.

The practical solution lies in making AI systems traceable and using natural-language prompts that generate clear, testable code. This enables accounting teams and auditors to validate every step of the process without specialist programming skills, turning AI from a black box into an auditable tool. Ultimately, AI-powered accounting systems must prioritise trust and compliance to unlock real benefits—otherwise, errors may go unnoticed, risks escalate, and the promise of AI-driven growth evaporates.

TAX COMPLIANCE SCRUTINY

HMRC Scrutinises 2023/24 Investors Relief Claims for Capital Gains Tax Compliance

Taxpayers claiming investors relief on their 2023/24 tax return are currently under increased scrutiny from HMRC. Investors relief sets capital gains tax at 10% for qualifying share disposals but strict eligibility conditions apply. Many claimants are now receiving letters questioning whether they meet these requirements, and responses within 30 days are essential to avoid penalties or further checks.

Two types of HMRC letters are landing: one prompts recipients to double-check their claim and amend errors, while the other requests missing information before a claim is accepted. Any amendment or disclosure after receiving these letters is treated as a prompted disclosure and may lead to interest and penalties on unpaid tax. This targeted approach highlights HMRC’s growing emphasis on compliance and the risks of making unsupported claims, reminding investors and their advisers to review eligibility closely and ensure full, accurate disclosures when claiming relief.

ACCOUNTING INNOVATION

AI Empowers Accountants to Manage Making Tax Digital Compliance Efficiently

AI and Making Tax Digital (MTD) have collided at the perfect moment for accountancy. With MTD ramping up reporting requirements, AI isn’t replacing accountants—it’s letting firms manage spiralling admin, streamline workflows, and keep headcount steady. For example, AI now chases up clients for late records, filters crucial warnings from background noise, and arms accountants with real-time client insights.

The message is clear: AI-driven tools like Sage Copilot embedded in accounting platforms aren’t a luxury—they’re quickly becoming essential. Rather than scrambling each quarter, practices can pivot from endless admin to added client value and strategic advice. Ultimately, embracing AI isn’t just about surviving MTD’s demands; it’s about preparing for continuous, real-time reporting and a profession that’s poised for even bigger technological transformation.

TAX TECHNOLOGY ADOPTION

Accountants Prepare Clients For Making Tax Digital Income Tax Compliance Requirements

Making Tax Digital (MTD) is quickly becoming the driving force behind a digital overhaul in the accounting world, particularly affecting sole traders and landlords. With staged rollouts lowering the turnover threshold from £50,000 in 2026 to £20,000 by 2028, both accountants and clients are racing to adopt MTD-compatible software—many opting for AI-powered solutions and reshaping service offerings accordingly. Practices that proactively segment clients, communicate early, and test systems are best positioned to manage this transition smoothly, as evidenced by increased client engagement when compliance timelines are clearly communicated.

Yet, stumbling blocks remain. Many landlords, for example, are only just becoming aware of digital requirements, and onboarding clients into this new framework has costs that may outstrip immediate returns. The key challenge is nurturing staff skills and designing efficient client experiences, all while maintaining service sustainability. Collaboration with software providers and transparent client education will be essential to minimising disruption and realising the long-term benefits of MTD.