MTD for Income Tax pricing strategies

MTD for Income Tax isn’t just a change in legislation for clients; it will fundamentally alter how accountants and bookkeepers deliver their services. With new responsibilities and expectations on the horizon, it’s only natural to ensure your fees reflect the time, expertise and ongoing support your firm will be providing. To do that effectively, it helps to start by understanding exactly how MTD will impact your day-to-day workload.

An increasing workload

Practices will begin to move away from the annual Self Assessment scramble - the new cadence will be four quarterly updates and a final declaration at the end of the tax year, essentially increasing filing requirements from one to five for every affected client.

Adding to the complexity, practices are likely to face a period where the old and new submission methods overlap. For example, in 2026, accountants may be doing their first set of quarterly filings for their clients affected by the new rules at the same time as starting work on their 2025/26 Self Assessment filings, creating a period of double work that won’t easily be covered by one fee. It’s therefore a critical time to rethink pricing strategies.

You’ll also need to think about your clients’ different needs. Some will adapt quickly, while others will require more hand-holding, especially when it comes to digitalisation. This means providing comprehensive training and onboarding for new software, which will inevitably increase demand on your practice’s time. Every client is unique, with different business setups and tech skills, so a one-size-fits-all approach won’t always work - you’ll likely need to tailor your approach. For example, think about clients still using personal bank accounts for their business finances; transitioning them to a designated business bank account can lighten your workload and ensure prompt data collection.

It’s all a balancing act, evaluating and moving to the next step with each client.

Not sure where to start when assessing the impact of workload on your pricing strategy? Here are some thought starters to consider:

• What sort of clients (e.g. landlords, small or large businesses) are you currently serving and what is your practice’s ambition for the future?
• Are your staff and clients prepared for an increase in workload? Is further training required?
• Could you automate some of your processes to speed up work internally?

If you’re looking to gain clarity on the impact of MTD for Income Tax in your practice, book a free MTD consultation with one of our experts. It’s a great opportunity to assess your readiness and develop personalised next steps.

Getting your pricing structure right

Practices are still exploring a range of options when it comes to MTD pricing, and no single, universally adopted strategy has been established yet. In fact, according to a recent FreeAgent poll (May 2025), nearly half of respondents in practices remain uncertain about pricing for Making Tax Digital.

Some are considering a straightforward flat percentage increase, aiming for simplicity across their client base. Others are leaning towards a ‘per submission’ model, directly reflecting the increased workload. And finally, some are experimenting with different pricing models for different cohorts of clients (for example, a fixed model for landlord clients), even a year ahead of the deadline.

However, many are finding that a one-size-fits-all approach just won’t cut it. Client-specific pricing is emerging as a potential strategy, recognising the unique needs and complexities of each business. Public-facing pricing plans might serve as a starting point, but flexibility is key. This flexibility must also address clients resistant to software adoption, as it leads to a substantial increase in your practice’s workload, requiring adjusted pricing.

Since many practices are still in the process of determining what is best for them, there’s time to start looking at this if you haven’t already. You’ll be in a great position to adapt as the landscape evolves.

When asked about the specific challenges of pricing MTD services, Johann Goree Co-Founder at Engager.app, explained: “The industry often struggles to price new services. Clients’ perceived value only becomes clear after a few deliveries of the work.”

He then added that the majority of people he has spoken to about this issue are planning to maintain the annual filing fee and treat the quarterly filing similarly to VAT returns, charging a similar amount to the VAT service fee.

If you’re not sure where to start when exploring MTD pricing strategies, here are some thought starters:

• What service bundles will optimise client engagement and revenue?
• What innovative packages can attract new clients and deepen relationships with existing ones?
• How are you tackling this challenge against competitors?

Communicating changes to your clients

Let’s be honest, MTD pricing changes bring anxieties. Managing potential client pushback and even the fear of losing clients are real concerns. The key to tackling these worries lies in clear, proactive communication.

Don’t wait for clients to question the changes; explain the ‘why’ behind them, emphasising the need for compliance and the added value of your services. Highlight how your expertise simplifies the process.

And remember, your accounting software is a powerful ally. Showcase how it streamlines record-keeping, reduces errors, and saves your clients time – all of which contributes to a smoother MTD transition.

In fact, accounting software (like FreeAgent) can give your clients a clearer view of their finances and a better way to work with you. And if they have an eligible business bank account, they can even access it for free.

When clients see the benefits, they’re more likely to embrace the changes. Happy clients mean a happy and thriving practice, especially ahead of MTD for Income Tax.