It confuses me why it took so long as late WWII for major militaries to employ APCs on a large scale. It seems really obvious in hindsight.
It's important to bear in mind that the tank only enters service in 1916, as a British response to the conditions of the Western Front and the inability of existing military vehicles - armoured cars - to effectively cross the terrain.
While large vehicles, early tanks were incredibly cramped, quite unreliable and very, very slow, travelling at about 4 mph. You can go and look inside surviving examples at the Tank Museum in Bovington and see that the engine takes up most of the interior. In order to accommodate and protect an effective number of soldiers would have required a significantly larger vehicle, which would have likely been even slower, or required an even larger engine. Combine this with the amount of fire that such a large vehicle would have drawn, and it's quite likely that any infantry would have in fact been quicker and safer advancing behind a tank, as indeed they were.
Actually yes, attempts were made to carry machine gun teams in Mk V tanks but this was found to be unsatisfactory. The conditions inside these tanks was appalling anyway, being extremely hot and cramped, no suspension, and with noxious fumes from the exposed engine, adding an extra squad of soldiers into the mix just rendered them unfit for combat.
To get around this, the British designed the Mk IX tank which was basically a stretched Mk V with the spot deleted, and oval doors added for access, but it arrived too late to see action. The design was supposed to allow for up to 30 troops to be carried in addition to 4 crew, but there was still no separate engine compartment and not that much extra space so I don’t know how successful it would have been.
There is a surviving example at the Tank Museum in Bovington, which you can clamber around inside.
See David Fletcher, The British Tanks 1915-1919