Most conversations about Making Tax Digital for Income Tax sit firmly in compliance. Deadlines, software choices, and submission processes are helpful, but firms that treat MTD IT purely as a compliance change are missing the commercial point.
MTD IT does not fundamentally change what accountants submit. It changes how often the work happens, how early responsibility begins, and how visible firms are throughout the year. That shift has consequences for workload, accountability, and risk, whether or not the underlying mechanics feel efficient.
MTD is, at its core, a pricing decision. Handle it well and it can be commercially sustainable. Handle it badly and it quietly erodes margin, capacity, and your client’s confidence in your pricing.
The Hidden Profitability Risk in “Just Compliance”
At a minimum, MTD IT work involves professional judgement, review, error detection, and accountability for the accuracy of submissions across multiple touchpoints each year.
Internally, firms need to understand that they are not “just submitting quarterly updates”. They are providing year-round compliance assurance. Treating that work as an administrative add-on, or feeling pressure to soften the commercial impact, undervalues both the effort and the risk.
On the client side, earlier visibility brings fewer surprises, better decision-making conditions, and lower penalty risk. Clients who see MTD support as structured oversight, rather than bureaucracy for its own sake, stand to gain more.
Start With Your Economics, Not the Market
Sustainable pricing starts with the firm, not with competitor-led or benchmarked pricing.
Before setting any MTD fee, you need clarity on your own cost base and capacity. That means understanding what it actually costs to run your practice, including commercial salaries, overheads, and, crucially, the level of profit required to make the business worthwhile.
Capacity matters just as much. No professional practice runs at 100 percent billable time, so you need to know exactly how many hours are available for each professional in your firm.
This data means you can calculate your velocity, your minimum viable rate for sustainable delivery. That is what your pricing should be built on.
Client Behaviour Drives Your Pricing
Not all clients consume professional time equally. Quality of records, timeliness, digital competence, and responsiveness all have a direct impact on your delivery, and in turn, your costs.
Correcting errors, chasing missing data, or cleaning up records all consumes capacity. If that work is not priced explicitly, it's being quietly absorbed by your practice.
Firms that price as though all clients behave the same end up subsidising the most demanding ones, which can be easily avoided by building this behaviour into your pricing tiers.
Value Exists Beyond Filing
MTD IT does create opportunities. In-year data allows for earlier tax planning, forecasting, and better financial decisions. However, these benefits should never be implied or bundled by default. If advisory support is included informally, it’ll quickly become invisible and underpriced.
Firms that succeed with MTD will be the ones that build additional services into their higher pricing tiers, along with a strong value proposition. This makes it clear what's included for baseline compliance, and what additional value you can bring. You get to decide what services you offer beyond compliance, what does your team have the skills and capacity for?
These additional services might not be for everyone, but they can bring a healthy profit margin if you price to reflect the value you’re providing, instead of an hourly rate.
Communicate Change Without Apology
Fee conversations for MTD changes do not need to feel defensive. The most effective communication starts with context. Five required touchpoints instead of one, new software, earlier involvement, and greater oversight are valid reasons for increasing price.
Position your services around the benefits of risk reduction, peace of mind, and financial visibility rather than “compliance support”. It’s also essential to translate annual fees into monthly equivalents that make costs more manageable.
Most importantly, be consistent in the face of objection. Making exceptions can undermine your client’s confidence in your pricing faster than you pushing back ever will. It’s okay to let clients go if they don’t want to pay your minimum fee.
Want the How-To? Join the live session on 25th February 2026
MTD works best when it sits on clear commercial foundations, supported by simple structures and practical tools that remove friction from delivery.
In our upcoming live webinar, we walk through the how-to framework, with examples. Plus you’ll be able to take it one practical step further with access to our MTD IT resources, including:
- An MTD for Income Tax pricing calculator to test fees against your real costs.
- Compliance expert, Ian Waters’ hot-off-the-press MTD for IT service schedule template.
- An in-app pricing menu template that you can adapt for client proposals and conversations.
- A practitioners guide on pricing MTD, plus a client-facing template to communicate MTD changes without diminishing your value.
If you want to design MTD IT pricing that works commercially before the rollout pressure hits, join us for the practical session and access the full set of resources.
🎙️ Wednesday, 25th February at 1pm GMT
