Every accountant is familiar with the shoebox. The one crammed with crumpled receipts, delivered annually with a sheepish grin. Or the client who stubbornly clings to their trusty spreadsheet, resisting any mention of cloud-based software.

Working in a service-led profession, you’ve likely adapted to these ways of working in an effort to support your clients, even when better tools are available. But with Making Tax Digital (MTD) for Income Tax looming, it's time to shake things up, not just for clients but for your practice too. This isn't just another regulatory hurdle; it's a generational shift that demands a new approach.

Out of 5.5 million UK businesses, only about 2 million are using accounting software. And of the 2.75 million that need to switch to MTD-compatible software by April 2028, just 1.23 million have made the move so far.

That’s a staggering gap! It's a goldmine of potential, yes, but also a stark reminder of the challenges accounting professionals face. Why the slow uptake? Is it resistance, cost or simply a lack of awareness? Whatever the reason, the reality remains: MTD for Income Tax is coming, and practices will need to act as navigators, guiding clients through this digital sea change.

So, how can you help your clients make the leap and ensure your firm is ready for the changes ahead?

Meet clients where they are

Getting clients to embrace digitalisation might be easier said than done. After all, no client is exactly the same. They come in all shapes and sizes, and their tech-saviness varies wildly. To effectively support them, you’ll need to understand their unique requirements and digital readiness and tailor your approach accordingly.

Think of clients as falling into one of three broad categories:

• ‍Digital natives. These are your digitally savvy clients who are already comfortable using technology in their day-to-day working life. ‍
• Willing but uncertain. They understand the need for change but might require more hand-holding. ‍
• Resistant to change. They’re the traditionalists, the ones who prefer the familiar comfort of spreadsheets - or even pen and paper.
  

Segment your client base

Once you have a general picture of how ‘digitally ready’ your clients are, you can begin to segment your client base further to help prioritise your communication. Identify those that will need to comply with MTD for Income Tax from April 2026 - your self-employed and landlord clients with qualifying income over £50,000. These clients will require immediate attention and a clear understanding of the impending changes.

Within this segment, use the clients you identified as digital natives as your test subjects. Engaging with them proactively will allow you to refine your communication, anticipate potential challenges, and build confidence in your own MTD expertise.

Team up with the right tech

The new rules mean that using digital tools is no longer a choice. To comply with the legislation, clients need to use MTD-compatible software to keep digital records and make submissions to HMRC electronically.

For all three groups, it's crucial to recommend software that strikes a balance between ease of use and functionality. Forget the complex, corporate-grade systems – small businesses need tools that simplify their lives, not complicate them.

Look for software that’s easy and intuitive for your clients, yet robust enough to handle all their compliance needs. And it should work just as well for your practice - think smart automation, time-saving bulk actions, and clear, insightful reporting. Support matters too: is it just chatbots, or can you actually talk to a human when it counts?

Nail your communication

Once you have a plan of action in place, you can start contacting your clients about what’s ahead. HMRC has already started reaching out to taxpayers, letting them know that a change is coming, so it’s important to be proactive and demonstrate you’re on top of the new rules.

As Stuart Pedlar, Digital Advisory Lead at Westcotts Chartered Accountants says: "It's on us as accountants to be preemptive rather than reactive. This is our opportunity to be ahead of the game rather than behind it."

Begin by contacting all your sole trader and landlord clients. This will help raise awareness of MTD and catch anyone whose circumstances may have changed over the past year, making them newly eligible for the first threshold. From there, you can use your client segments to develop a targeted follow-up plan, sharing more specific details and next steps to help guide them through the process.

Whether you prefer a face-to-face chat, a phone call, or a well-crafted email, there are a few things to keep in mind.  

• ‍Give clarity. Communicate what’s changing and when, how this will affect the way you work together, and how you plan on supporting them during the transition. ‍
• Lead with the positives. Instead of dwelling on the ‘burden’ of change, highlight the benefits: the potential for improved accuracy, real-time insights, and streamlined financial management.
• ‍Set clear expectations. Update your Letters of Engagement to reflect the changes brought about by MTD. Clearly outline how your services will evolve, what is expected from the client, and the associated timelines.
  

You’re likely to get questions about next steps, so consider how you’re going to build momentum and educate your clients beyond the introductory conversation. You could host workshops, webinars, or offer one-on-one training.

“Start small - little and often is key. Don’t overwhelm your clients. You’ll lose engagement straight away if you simply pile in and say ‘this is everything that we’re doing’,” says FreeAgent Sales Manager, Kris Sawford.

If that feels like a lot to manage, look to your software providers, who should be able to provide you with support. FreeAgent Partners have access to a whole library of resources as well as personalised training from FreeAgent’s specialist team to help them get set up on the software and up to speed with MTD.

Perfect your pricing

MTD for Income Tax isn't just a change in legislation for clients; it will fundamentally alter how accountants and bookkeepers deliver their services.

Practices will begin to move away from the annual Self Assessment scramble - the new cadence will be quarterly updates and a Final Declaration, essentially increasing filing requirements from one to five for every affected client. This could mean an initial surge in workload as practices straddle the old and new systems for different clients. It’s therefore a critical time to rethink pricing strategies.

But with the economy in a tricky place for small businesses, clients may be wary of increasing fees. So, how do you balance delivering the service your clients need with the price they’re willing - and able - to pay?

Here are some solutions that may work for your practice:

• ‍Per submission: Charging for each quarterly update and the final declaration offers a clear, pay-as-you-go structure for clients to understand. It works well for clients who prefer to pay only when services are delivered, though it may feel less personalised and more transactional. ‍
• A fixed subscription model: A monthly fee covering all ongoing work, as well as the cost of MTD-compatible software, can simplify things for clients and provide a steady income stream for your practice. This approach can build stronger long-term relationships and smooth out cashflow, but may limit your ability to adjust pricing quickly. ‍
• More flexible, menu-style pricing: Offering a menu of services based on complexity allows you to guide clients to a package that best fits their needs. This also opens doors for your practice to upsell additional services, such as taking over bookkeeping entirely.
  

There’s no perfect strategy to tackle MTD - you’ll need to consider the pros and cons of any approach, as well as market competition and the financial objectives of your practice.

In any case, remember that you're not just charging for time; you're charging for expertise, compliance, and peace of mind. The role of the accountant has evolved into something akin to a financial partner, offering personalised advice and strategic guidance. Don't undervalue your services!

“By the time the £30,000 threshold comes into effect in April 2027, the market will tell us what clients are willing to pay. It’s up to us to adapt internal processes and automate as much as possible,” says Russell Frayne, Director of Transformation at Gravita.

Seizing the Opportunity

MTD for Income Tax is a significant shift, but also a chance to diversify, digitalise, and boost profitability. By simplifying pricing, communicating effectively, and investing in client education, you can guide clients through this transition with confidence.

Russell Frayne says: “The key question to ask yourself is: how can you get your client to be a better client with MTD as the driver?”

Instead of viewing MTD as a daunting obligation, see it as an opportunity to strengthen client relationships, enhance service offerings, and embrace the digital future of accounting. The more practices prepare now, the smoother the transition, and the better equipped clients will be to thrive in the MTD era.