The tax world is constantly changing. Tax rates or thresholds can go up or down, tax reliefs can be expanded or scrapped, and new taxes can be introduced. Even a new tax case ruling might alter the understanding and application of tax rules.

MTD will create billing challenges 

For 2026, the main change is going to be the introduction of Making Tax Digital (MTD) for income tax and the impact it’s likely to have on the sector.

From April, sole traders and landlords with combined gross income exceeding £50,000 on their 2024/25 tax return will fall within the scope of MTD income tax. They’ll be required to keep digital accounting records and submit quarterly updates of their income and expenditures using MTD-compliant software, as well as completing their year-end tax returns in compatible  software.

According to Lindsey Wicks, Senior Technical Manager, Tax Policy at ICAEW, getting clients ready for this change will create additional administrative and time costs for accountants who may struggle to pass these on in full to their clients.

“A lot of time is already spent on the phone to HMRC, whether it’s trying to get their call connected or chasing information. Accountants can’t bill this time to clients,” says Wicks.

“But with the introduction of MTD for income tax, they’re going to spend additional time setting their clients up and getting them ready and they may not be able to charge for these one-off preparation costs either.”

If accountants are assisting their clients with digital recordkeeping and MTD quarterly submissions, the annual billing cycle may also need reviewing. But transitioning to more frequent – perhaps monthly – billing does have challenges. This is because accountants will be dealing with the 2025/26 tax year for their clients at the same time as closer   to real-time work for the 2026/27 tax year.

Pricing shift from time-based to value-based?

Conversely, if accountants are able to use the right tools and processes, many tasks could start taking less time thanks to artificial intelligence (AI) and automation, which are affecting billing in a different way.

Taken together, it could signal a shift away from time-based billing. Being unable to charge clients for additional administration time, while at the other end of the scale having to charge less for advice because research can be pulled together quicker, is no longer sustainable. Instead, there could be a gradual move towards value-based billing, Wicks believes.

Risk profile of tax advisers will change

New legislation introduced in the Finance (No. 2) Bill 2025-26 will also result in changes to the framework within which tax advisers operate. Under the measures, HMRC will be given stronger powers to act against tax advisers and, from May 2026, tax advisers will be legally required to register with HMRC and meet minimum standards. Mandatory registration is just one of three sets of HMRC powers affecting tax advisers in the Finance Bill .

“The risk profile of tax advice is changing,” Wicks warns. “Accountants might find that the risk and reward no longer works for them. They might not want to take the risk of giving tax advice to certain taxpayers or on certain areas. That in itself can impact taxpayers and businesses if that affects the cost of getting advice or even the availability of that advice.”

Tech advisory and carbon accounting

2026 will bring opportunities too. Wicks believes there will be increased demand for more tech advisory work amid the need for MTD-compliant software, while the introduction of new taxes, like the Carbon Border Adjustment Mechanism (CBAM) from January 2027, will create opportunities for new service lines. “Carbon accounting could be a new opportunity for accountants,” she says.