MTD for IT increases the number of submissions clients need to make – replacing one annual assessment with four quarterly updates and a Final Declaration. This could mean existing clients need more support throughout the year, and business owners may seek an accountant or bookkeeper for the first time.
Practices and clients also need MTD software. These changes to process, clients numbers, and software all need to be factored into your pricing. In this article, we show you how to set fair, feel-good prices for MTD services.
What to consider before building your pricing model
● Client size and type: Freelancers and one-person businesses typically have less budget, and simpler requirements. Larger clients may require more help.
● Client industries: Certain industries may require more work for MTD. For example, retail clients may have high transaction volume, so you should shape your services and pricing around this.
● Software: Modern accounting software can reduce your compliance workload, making it easier and less costly to deliver services.
Choosing the right pricing model
Practices commonly use hourly, fixed fee, and value-based pricing for accounting.
Hourly pricing requires you to bill based on time, whereas fixed pricing combines the cost of service delivery plus your desired profit margin. But if you work quickly, hourly pricing can mean you earn less. And profit margin can disappear if a task requires extra resourcing. Value-based pricing requires that you set fees based on the value created for clients. This allows you to set fees that reflect the impact of your services (but it can be hard to determine prices).
Tiered pricing works for clients and practices. Clients can choose a package that meets their budget and requirements, and you get a guaranteed chunk of income each month. You could start with a basic package that requires the client to take care of their own bookkeeping, and you cover MTD software-set up and all submissions. A standard package might include MTD submissions, plus all bookkeeping and reconciliation. A premium package could include all of the above plus ongoing MTD advice, training, and tax planning.
How to address client concerns and communicate value
Some clients may show resistance to new MTD pricing. Here are some example scenarios and responses:
● ‘I don’t want to pay the extra fees’– Explain that MTD for IT is mandatory, and non-compliance could come at a high cost. Highlight the benefits of MTD services – such as reducing the pressure on clients and giving them more time to focus on their business.
● ‘I don’t have the budget – what are my options?’ – Suggest that they could take care of their own recordkeeping and opt for a submissions-only service. Point them towards software and apps that make MTD compliance easier – like Xero’s data capture tool, Hubdoc.
● ‘I don’t want to use MTD software’ – Highlight that MTD software is mandatory, but it can also be beneficial beyond compliance. Point to features that can save them time on financial processes and give them a better view of their cash flow.
Finding software to support MTD pricing
In our latest UK Accounting and Bookkeeping Industry Report 2025, 87% of practices say the use of cloud accounting software leads to increased client satisfaction, 51% of practices using cloud experience client growth, and 44% report that adopting or switching to cloud-based software has increased practice efficiency.
Xero is MTD-compatible and HMRC recognised. With automatic bank feeds, reconciliation predictions, and data that flows into client returns automatically – preparing submissions is faster and more accurate. Plus, you can show clients insights on cash flow, invoices, and key financial metrics with customisable dashboards.
If you’re not yet a Xero partner, visit our Xero Partner Programme where you can find out more about becoming a partner and join over 250,000 accountants and bookkeepers using Xero in their practice. Get the tools and resources you need to succeed.
