TLDR: Sage has launched the UK’s inaugural AI-driven Making Tax Digital (MTD) for Income Tax Agent, designed to significantly reduce administrative burdens for accountants and enhance compliance confidence ahead of the 2026 MTD deadline. The new agent, revealed at Accountex Manchester, leverages AI to automate complex quarterly updates and streamline workflows.
London, UK – September 23, 2025 – Sage (FTSE:SGE), a leading provider of accounting, financial, HR, and payroll technology for small and mid-sized businesses, today announced the introduction of the UK’s first AI-powered Making Tax Digital (MTD) for Income Tax Agent. Unveiled at Accountex Manchester, this innovative solution aims to transform the intricate process of quarterly tax updates into a seamless, end-to-end workflow, providing accountants and their clients with enhanced confidence in compliance and significant time savings.
The new AI agent is specifically engineered to address the growing administrative pressures faced by the accounting profession due to the government’s MTD for Income Tax (MTD IT) scheme. This initiative, which mandates digital record-keeping and quarterly submissions, is set to impact self-employed individuals and landlords with annual incomes over £50,000 from April 2026, with further thresholds planned for subsequent years. The MTD IT program has been characterized by delays and concerns, particularly regarding the increased workload from four quarterly submissions annually.
Sage’s MTD for Income Tax Agent is designed to tackle this ‘capacity crunch’ by automating and streamlining numerous administrative tasks. Key functionalities include automatically segmenting clients based on complexity, setting up tasks and reminders, proactively chasing missing documents, flagging potential issues early, producing quarterly submission reports for review, obtaining client approval, and facilitating direct filing with HMRC. This comprehensive automation is projected to reduce administrative work by up to 50%.
Unlike traditional software that requires users to navigate through menus for each step, Sage’s AI agent operates by anticipating needs and completing multiple, interlinking tasks autonomously. If configured, it can organize information, send reminders, and identify anomalies without constant manual instruction, allowing accountants to shift their focus from routine compliance to more strategic client advisory work.
The first iteration of the MTD Agent will be enabled through new Sage Copilot capabilities, which are scheduled to roll out in October. This integration paves the way for full automation well in advance of the critical 2026 deadline.
Lee Coombes, Head of Accountancy and Tax at Lee Coombes Accountancy Digital, commented on the announcement, stating, “With more people soon required to file under Making Tax Digital, practices are going to be under real pressure. Sage’s MTD for Income Tax Agent takes a big part of that burden away by automating admin and flagging issues early. It means we can manage the extra demand without losing focus on the clients who need our advice most.” This sentiment underscores the agent’s potential to alleviate significant operational stress within the industry.
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By leveraging artificial intelligence, Sage aims to empower accounting practices to maintain compliance, minimize manual effort, and dedicate more time to fostering client relationships and offering strategic support in an evolving digital tax landscape.
