Sage amps up AI offering ahead of Making Tax Digital deadline

One of the top accounting software platforms, Sage has today announced it will offer free access to its AI assistant, Sage Copilot. The platform says the new features will help accountants and bookkeepers to embrace the “new era of AI” in accounting.

Regulatory changes such as Making Tax Digital (MTD) will require sole traders to fully digitise their tax returns and record keeping from April 2026.

Coming less than a year before the April deadline, the Sage announcement is a clear sign that sector leaders are preparing for a wave of digitisation — one that sole traders and their accountants must ensure they stay ahead of.

What is Sage Copilot?

Sage Copilot is essentially an AI-enabled virtual assistant. Previously, it was only available as a paid-for add-on to the Sage for Accountants plan.

But from today, one free Sage Copilot licence will be included in the platform’s specialist bookkeeping product, Sage for Accountants, per practice. Available on the lowest-cost plan, Sage Individual, the features will support small firms, sole traders, and their accountants. 

In a press release, Sage said the move will help accountants and bookkeepers embrace the AI in the industry with greater confidence and less risk. Key features of Sage Copilot include:

• AI-driven compliance and accuracy for VAT and tax filings
• AI-powered forecasting, risk analysis and predictive cash flow management 
• AI-generated emails and messages for communicating with clients

Sage made the announcement at the world’s largest accounting and finance expo, Accountex London, which is being held at Excel London this Wednesday and Thursday. 

What is Making Tax Digital?

Next April, regulatory changes like Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) will take effect. 

As part of the new rules, sole traders with an income over £50,000 will need to keep digital records, use MTD-compatible software, and submit quarterly summaries of their income and expenses to HMRC. The threshold will decrease to £30,000 in 2027, and £20,000 in 2028.

Their accountants and bookkeepers must also adhere to the changes, drastically upping their administrative workload. 

Sage says its AI assistant, Sage Copilot will help to streamline the new processes and free up time, so that finance teams can focus more time on growing their practice.

Those who prepare now will find themselves at a competitive advantage. Research from IRIS Software Group this week revealed that 45% of sole traders feel unprepared for Making Tax Digital. Alarmingly, 31% said they have never heard of it.

Business finance expert and Managing Director of Aurora Capital, George Holmes, issued a warning to SMEs in response to the findings, declaring that without greater support for sole traders, “we could see thousands hit with penalties, delayed filings and unnecessary stress.”

There’s an AI in accounting

Accounting software brand, QuickBooks made a similar announcement of new AI features at Accountex today. The tools will apparently help users and their accountants streamline self-assessment through a single platform, as well as more quickly digitise records for MTD.

Combined, both declarations are a clear sign that accountants are being pushed to embrace AI and follow the new, digitalised direction that the sector is moving in.

Doing so will be imperative to ensure that accountants can keep up with changing client demands and expectations, as well as the incoming MTD regulatory changes.

“Accountants are at a pivotal point,” says Karen Ainley, SVP of Accountants at Sage. “AI is reshaping the profession and practices, and now’s the time for them to move into more strategic, future-ready roles.”