How to Turn MTD IT Compliance Into a Revenue Opportunity for Your Practice
Making Tax Digital for Income Tax (MTD IT) is often framed as a compliance headache for UK accounting firms. Quarterly updates, digital record keeping, new client behaviours, and increased HMRC oversight can understandably feel like added pressure, especially when many practices are already stretched.
But for forward-thinking accountants, MTD IT is also a significant revenue opportunity.
As MTD IT becomes mandatory from April 2026 (with thresholds widening in 2027 and 2028), firms that proactively redesign their services, pricing, and client segmentation can increase recurring fees, deepen client relationships, and deliver higher-value advisory services, all while remaining fully HMRC-compliant.
We explore how to turn MTD IT compliance into a profitable, scalable service line.
Why MTD IT Is a Commercial Opportunity (Not Just a Regulatory Change)
MTD IT fundamentally changes how and when clients interact with their accountant. Instead of a single annual tax return, accountants will now be involved in quarterly reporting, ongoing digital record reviews, and year-end final declarations.
This shift creates three important realities:
- Accountants are required more frequently, not less
- Clients need more support, especially during the transition to digital
- The value of professional oversight increases, particularly for complex or multi-income clients
Firms that continue to price MTD IT as a “free add-on” to existing services risk absorbing a significant workload increase without additional revenue. Firms that reframe MTD IT as an ongoing service (with clear scope, structure, and value) can create predictable, recurring income.
Packaging MTD IT Services the Smart Way
One of the most effective ways to monetise MTD IT is through clearly defined service packages that reflect different client needs, behaviours, and price sensitivities.
Rather than offering a single MTD IT service, successful firms typically introduce tiered packages, for example:
Entry-Level: DIY / Software-Led MTD IT
This package suits digitally confident clients who are happy to maintain their own records using MTD IT software.
The accountant’s role focuses on:
- Initial MTD IT setup and HMRC authorisation
- Light-touch quarterly reviews
- Final declaration submission
This is a lower-cost option for clients but still generates recurring quarterly fees with minimal time investment when supported by the right MTD IT software.
Mid-Tier: Review & Submit
This is often the most popular option for sole traders and landlords.
Clients maintain digital records, but the accountant:
- Reviews quarterly data for accuracy and completeness
- Corrects obvious errors
- Submits MTD IT quarterly updates to HMRC
- Provides basic tax visibility throughout the year
This tier balances efficiency with professional oversight and can be priced comfortably above traditional self-assessment fees due to the increased touchpoints.
Premium: Fully Managed MTD IT
Designed for complex, time-poor, or higher-value clients, this package positions the accountant as a proactive partner rather than a compliance processor.
It typically includes:
- Full digital record keeping
- Quarterly submissions and year-end filing
- Ongoing tax insight and forecasting
- Advisory conversations based on real-time data
This tier delivers the highest margins, strongest client retention, and the greatest opportunity for upselling advisory services.
Client Segmentation Is the Key to Profitability
Not all clients should be treated the same under MTD IT.
A common mistake firms make is offering identical MTD IT services to every client, regardless of digital ability, income complexity, or willingness to engage.
Instead, MTD IT provides the perfect reason to re-segment your client base, using criteria such as:
- Digital confidence
- Number of income sources
- VAT registration
- Desire for involvement vs delegation
Segmented services allow you to:
- Price appropriately
- Protect staff time
- Avoid over-servicing low-fee clients
- Focus advisory effort where it delivers real value
MTD IT Opens the Door to Advisory Services
Quarterly reporting means quarterly data, and that data is invaluable.
With MTD IT-compliant software, accountants gain access to up-to-date income and expense information throughout the year, rather than months after the year end. This creates natural opportunities for advisory conversations, including:
- Tax planning before liabilities are fixed
- Cash flow insights
- Profitability reviews
- Forecasting and budgeting
- Structuring advice for growing businesses
Rather than selling advisory as a separate, abstract service, MTD IT allows advisory to be embedded naturally into the compliance process, making it easier to justify fees and easier for clients to understand the value.
Technology Is What Makes This Scalable
None of this works without the right technology.
MTD IT software should reduce manual work, not increase it. The right solution enables:
- Digital record keeping
- Automated data flows
- Clear separation between record keeping and submission
- Efficient quarterly reviews
- Seamless HMRC submissions
When your MTD IT technology is designed for accountants, not just end users, you can scale services profitably without adding headcount for every new client.
MTD IT Rewards Proactive Firms
MTD IT is unavoidable. But how it impacts your practice is a choice.
Firms that delay action or treat MTD IT as a compliance burden risk margin erosion and client frustration. Firms that act early, educate clients, redesign pricing, and invest in the right MTD IT software can transform regulatory change into a long-term revenue engine.
MTD IT isn’t just about meeting HMRC requirements.
It’s about building a more resilient, recurring, and advisory-led accounting practice.
Get in touch with our team to find out how Capium can help your practice with preparing for MTD IT today.
