Sage, a leader in accounting, financial, HR, and payroll technology for small and mid-sized businesses, has announced the UK's first MTD for Income Tax Agent. Unveiled at Accountex Manchester, this AI-powered agent simplifies quarterly updates into a single, end-to-end workflow, ensuring accountants and clients maintain full compliance without oversight.
The MTD for Income Tax Agent arrives just in time to prepare practices for the April 2026 mandate, where self-employed individuals and landlords above £50,000 in earnings must maintain digital records and submit quarterly updates via compatible software. With more than 4 million taxpayers entering scope in the coming years, this shift intensifies demands on accountants already facing capacity constraints. The agent's first release, powered by Sage Copilot features launching in October, organizes client data, minimizes manual tasks, and streamlines oversight to build readiness.
By automatically categorizing clients by complexity, assigning tasks and reminders, pursuing missing documents, and highlighting risks proactively, the MTD for Income Tax Agent cuts through routine workloads. This functionality supports accountancy practices in upholding Making Tax Digital standards while redirecting efforts toward advisory services and client engagement, transforming compliance from a challenge into a streamlined process.
“With more people soon required to file under Making Tax Digital, practices are going to be under real pressure,” said Lee Coombes, Head of Accountancy and Tax, Lee Coombes Accountancy Digital. “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.”
Drawing on the Sage Platform's robust infrastructure, the agent enables rapid, secure deployment of AI innovations without altering established workflows for accountants and small businesses. Extending Sage Copilot's proven automation—which already aids tens of thousands in task efficiency and insight generation—the agent incorporates stringent data security and compliance guardrails, fostering trust in AI-driven operations.
“The Sage Platform allows us to deliver products and services such as our agents faster, more securely, and with trust at the heart of everything,” said Walid Abu-Hadba, Chief Product Officer, Sage. “By connecting agents across our products, we take away complexity and make innovation practical. This is how we help accountants and businesses stay compliant and focus on growth, while experiencing new capabilities faster, with less disruption to how they already work.”
Beyond income tax, Sage is developing interconnected AI agents to manage compliance, payroll, and cashflow across its ecosystem, eliminating repetitive duties and preempting risks. This proactive approach keeps accountants in control while scaling admin reductions, positioning practices to adapt swiftly to regulatory changes and prioritize business development.
“We are moving beyond task automation to agents that anticipate needs and act proactively whilst keeping accountants in control,” said Neal Watkins, EVP, Small Business and Accountants, Sage. “This is about reducing admin at scale, giving accountants and businesses the confidence and control to meet change head-on and focus on growth. By embedding agents across our platform, we’re creating an ecosystem of trusted AI that will augment and transform how work gets done.”
Sage's MTD for Income Tax Agent signals a forward-thinking commitment to AI in accounting, empowering professionals to navigate Making Tax Digital with efficiency and foresight. Integrated across Sage's UK MTD portfolio and Sage for Accountants, it equips users to meet evolving tax demands, ultimately driving sustainable growth for small and mid-sized businesses.
Find out more about Sage Copilot here: https://www.sage.com/en-gb/sage-copilot/
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