Running a small practice in 2026 means fitting two HMRC timetables, MTD for Income Tax and tax adviser registration, around the same team you had last year. The parts you control are how you price the work, how your own fees get paid and how much routine admin your software takes off people. Agreeing the fee and the way it's collected in writing, before the work starts, tends to do more for cash flow than chasing harder later.
In this article
The short version
- MTD for Income Tax applies from April 2026 above £50,000 of qualifying income, falling to £30,000 in 2027 and £20,000 in 2028.
- If your firm already has a Self Assessment or Corporation Tax agent account, your tax adviser registration window runs from 18 August to 18 November 2026.
- The professional bodies leave prices to you but expect the basis of your fee agreed in writing before work starts.
- Practice fees tend to be paid later than other invoices, so settle how each client pays at onboarding.
- Software can take on routine chasing within rules you set, while partners keep the difficult conversations.
What HMRC has changed this year
MTD for Income Tax is live. Sole traders and landlords whose qualifying income was over £50,000 on their 2024-25 return have had to keep digital records and send quarterly updates since 6 April 2026. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028, each tested on the return from two years earlier. Qualifying income is gross turnover from self-employment and property added together, before expenses, so a client with £25,000 of rent and £27,000 of trading income is in scope whatever their profit.
For clients in scope, an annual job becomes five deadlines: quarterly updates by 7 August, 7 November, 7 February and 7 May, then the return by 31 January. Each update is cumulative from the start of the tax year. HMRC isn't charging penalties for late quarterly updates in 2026-27, but the return deadline still carries penalty points and late payment of tax is penalised separately. Your Self Assessment authorisations carry over, but you still have to sign each client up.
Separately, anyone paid to deal with HMRC on someone else's behalf now has to register as a tax adviser. The firm registers, not each member of staff. If your practice already holds a Self Assessment or Corporation Tax agent account, your three-month window opened on 18 August 2026 and runs to 18 November 2026. HMRC says an adviser who doesn't register may not be able to act with HMRC for clients, so if you haven't applied, check which window covers your firm on gov.uk.
Neither change says anything about how you bill or collect, but MTD does change the shape of the work you're billing for.
How to price the work and agree fees
None of the professional bodies will tell you what to charge, or whether to bill by time, by the job or by the month; the joint engagement letter guidance from ATT, CIOT, ACCA and AAT treats that as a commercial matter. Their requirements are about paperwork. Engagement letters are mandatory, your client should understand how fees will be charged before any work starts, and payment terms go to them in writing.
That paperwork is also your recovery position. Without an engagement letter, recovering unpaid fees through the courts is much harder, and neither CIOT nor ATT will arbitrate a dispute about the size of a fee, so most fee recovery is decided before the work begins.
A few pricing choices tend to matter most:
- Price quarterly MTD work for what it is. If last year's annual fee now has to cover four updates and a return, you're either absorbing the extra work or sending invoices your client didn't expect. A monthly fixed fee often fits recurring work better.
- Add a late-information charge to your schedule of services. The joint guidance contemplates extra fees where records arrive after the date you asked for them or a return has to be rushed. Agreed in advance, it's a line in the letter, not an argument in January.
- Reprice instead of writing off. If the same client's extra work gets written off two years running, it's a pricing problem, and the renewal is the place to fix it.
- Take fees in advance if it suits you. CIOT and ATT permit it on reasonable amounts, with the terms in the engagement letter and a refund for any work you don't end up doing.
Monthly billing can also change your VAT rhythm, because each instalment has its own tax point, so check your arrangement with your VAT adviser first.
How your own fees get paid
Practice fees can be slow to arrive. On Adfin's platform, invoices raised by small accountancy practices and paid when the client chose to pay arrived on or before the due date about 60% of the time, against about 72% for other small businesses. When practice fees were late, the median delay was 10 days, twice the other group's. It's one platform's data, so treat it as a direction, not a benchmark.
One likely reason is that your fee is easy to put off: nothing stops arriving if it waits a fortnight, and a firm reminder to someone you advise feels costly. Agreeing how the money moves before the work starts takes that decision out of the relationship.
The cheapest moment to set the arrangement up is onboarding, when a new client is already handing over ID and ledger access and expects you to tell them how things work. If the payment method comes up when you discuss the fee and the client signs a mandate along with the letter, it's simply part of joining. Raised with an established client, the same request can feel like new terms.
Adfin is set up for this. Through its integrations with Socket and Engager.app, a client can sign the direct debit mandate along with your proposal or engagement letter. Fees that change from month to month are collected under the same mandate with advance notice, you don't need your own Service User Number, and every payment reconciles to Xero or QuickBooks. Clients who can't use direct debit get a payment link to pay by card, pay by bank or bank transfer instead.
Lock-up, software and the routine work
NatWest's 2024 benchmarking report puts median lock-up for accountancy practices at around 105 days, with smaller firms carrying about 26 days of work in progress and 66 days of debtors. Your own figure depends on how you count WIP, so measure it the same way every month and watch the trend.
On software, judge each tool by the handoffs it removes. A fee note should be raised once and appear everywhere it needs to. Payments should match to invoices on their own, including part payments and transfers with no reference. And a sync that breaks should tell somebody. "MTD-compatible" only tells you what a product can file, not how anyone gets paid.
Some collection work needs a partner: the client whose business is struggling, the decision to keep working while a fee is outstanding, and ceasing to act, which CIOT and ATT leave to you with reasonable notice. The rest is the same reminder sent to a different name each week. Adfin chases unpaid fees over email, SMS and WhatsApp from your own email domain, on a schedule you set, and its AI Customer Agents can adjust timing and channel for each client within rules you approve. The professional bodies' guidance on AI still applies when you use it: review AI output the way you'd review a junior colleague's work, and you stay accountable for it.
Common questions
When does MTD for Income Tax apply to my clients? From 6 April 2026 where qualifying income was over £50,000 on the 2024-25 return, from April 2027 over £30,000 on the 2025-26 return, and from April 2028 over £20,000 on the 2026-27 return. Qualifying income is gross self-employment and property turnover before expenses.
Do I have to register with HMRC as a tax adviser? Yes, if you're paid to deal with HMRC about other people's tax affairs; the firm registers, not individual staff. Practices with an existing Self Assessment or Corporation Tax agent account have a window from 18 August to 18 November 2026.
Should I price MTD quarterly work differently? Often, yes. If last year's annual fee now has to cover four quarterly updates and a return, a monthly fixed fee tends to fit the recurring work better.
When are MTD quarterly updates due? By 7 August, 7 November, 7 February and 7 May, with the tax return still due by 31 January. Each update is cumulative from the start of the tax year.
When should a practice agree how its own fees are paid? At onboarding. Write the payment method into the engagement letter and have the client sign a direct debit mandate along with it, with a payment link for anyone who can't use direct debit.
Can AI chase clients for unpaid fees? Yes, within limits you set. Adfin's Customer Agents send reminders over email, SMS and WhatsApp and adjust to each client, while you decide the rules and review what goes out.
Sources
- HMRC - Find out if and when you need to use Making Tax Digital for Income Tax (accurate as of October 2026) https://www.gov.uk/guidance/find-out-if-and-when-you-need-to-use-making-tax-digital-for-income-tax
- HMRC - Check if and when you need to register as a tax adviser with HMRC (accurate as of October 2026) https://www.gov.uk/guidance/check-if-and-when-you-need-to-register-as-a-tax-adviser-with-hmrc
- ATT - Engagement letters (joint ATT, CIOT, ACCA and AAT guidance) (accurate as of October 2026) https://www.att.org.uk/engagement-letters
- CIOT - Professional Rules and Practice Guidelines (accurate as of October 2026) https://www.tax.org.uk/professional-rules-and-practice-guidelines
- NatWest - The accountancy trends shaping 2024 (accurate as of October 2026) https://www.natwest.com/business/insights/sector-trends/professional-and-business-services/the-accountancy-trends-shaping-2024.html
- Adfin - Payments and credit control for accountants (accurate as of October 2026) https://www.adfin.com/accountants
