Direct from the experts at Sage, who are running free MTD practice consultations, here’s how to build a value-driven, transparent, and sustainable pricing model that works for both you and your clients.
The urgent need for a strategic pricing model
As MTD for Income Tax looms, many firms are facing a familiar dilemma: how to manage the significant increase in workload and compliance demands without a corresponding rise in fees.
For most, however, the real challenge lies in the absence of a systemised pricing approach, combined with client unawareness and internal capacity pressures.
The new requirements involve quarterly reporting, additional processing, and software costs, all of which must be reflected in your service offerings. But fear of client pushback or fee sensitivity often stalls these conversations. That’s why starting now – with a clear plan – is essential.
The first step? Treat pricing as a deliberate business process, not an afterthought.
Sage recommends building your strategy around three key pillars: People, Process, and Proposition. This means empowering your team – even if it’s a team of one! – to have consistent conversations, mapping your service delivery, and clearly articulating the value you provide beyond compliance.
Foundations and implementation of value-based pricing
To avoid burnout and maintain profitability, your pricing strategy should be built on five key foundations:
- Transparency – Be clear about what your service includes, from setup and training to final tax return submission.
- Consistency – Use a structured framework so every client goes through the same journey.
- Value-Focus – Charge based on the value delivered, not hours worked.
- Systemisation – Ensure any team member can follow the process, improving efficiency and client confidence.
- Efficiency – Keep pricing discussions streamlined for both parties.
Breaking down MTD services into identifiable components helps you assign value clearly. Services include:
- Setup and training
- Quarterly updates
- Data processing
- Bank reconciliation
- Bookkeeping
- Tax return preparation
- Ongoing tax planning
For instance, data processing can be priced based on volume (eg, bands of transaction counts), while bank reconciliation can be tiered by number of accounts and frequency. This modular approach not only justifies your fees but also highlights your ongoing role in keeping clients compliant and informed.
By communicating these as part of your proposition – “Here’s what we do, here’s why it matters, and here’s how we charge” – you reposition the pricing conversation from cost to value.
Planning for MTD: a timeline and tools for success
With MTD requirements coming into effect for self-employed individuals and landlords from April 2026, the timeline to act is now. A typical medium-sized practice might need to reprice and re-engage 50–60 clients per week for a full year to be ready.
Tools like Sage’s GoProposal make re-engaging and re-pricing clients easy, with the ability to ensure compliance with regulatory changes, too.
Monthly billing can smooth revenue flows while preparing clients for a new service norm. For example, turning a one-off £600 fee in April 2026 into £50/month from mid-2025 not only boosts cash flow but normalises MTD as a monthly service.
Ultimately, success with MTD will depend not just on compliance – but on your ability to communicate and deliver value at every step.
