Making Tax Digital · Accountants
Protecting practice margins when supporting MTD sole traders
ONLY£15A MONTHQuarterly reporting changes when work arrives at an accountancy practice.
Quarterly reporting changes when work arrives at an accountancy practice. It does not automatically make every small client unprofitable. The commercial task is to identify the work, price a clear scope and reduce repeated administration without removing the review that gives the service its value.
Cost the complete service
Include onboarding, authorisation, missing-record queries, bookkeeping corrections, review, filing and year-end work. Four quarterly deadlines do not mean every client has only four business submissions: separate trades and property businesses can add reporting work.
Measure staff time before setting a fee. Distinguish standard work from catch-up bookkeeping, foreign income, unusual transactions and advisory requests. An apparently low-cost licence can still be expensive if its workflow creates repeated support calls.
Use a transparent pricing structure
Separating software from professional fees can make changes easier to explain. Bundling can also work if the scope and economics are clear. Avoid treating a public retail price as evidence of an unpublished wholesale agreement.
Integrations with practice-management tools can reduce copying, but confirm the released integration and its failure handling. Do not build a capacity forecast on an assumed Karbon connection or an untested automatic filing feature.
Worked example: a service-cost model
Assume a practice charges a £60 monthly professional retainer, excluding VAT, with software paid separately. Annual professional revenue is £720. If delivery takes 12 hours at an illustrative £35 internal cost, labour costs £420, leaving £300 before other overheads.
If unresolved queries push delivery to 20 hours, labour rises to £700. The problem is now visible. These figures are a planning example, not a market fee benchmark or promised Avona margin.
Make responsibility visible at each stage
An effective practice process identifies who supplies the records, who resolves queries, who reviews the figures and who submits. Record those responsibilities in the engagement and workflow. Do not rely on the assumption that somebody else has completed the final step.
Agent authorisation is also separate from client consent to a commercial service. Use HMRC's correct MTD authorisation process and the agent's own access. A client should not hand over their Government Gateway password simply to make the process more convenient. HMRC explains how to authorise an agent.
Track each relevant business and period. A green client-level indicator can hide an outstanding property update if the sole-trade update has been completed. Store the approved figures and acknowledgement against the correct record.
For recurring work, use a short exception list rather than sending the client every transaction again. Give each question a reference, amount and clear request. Access controls and a secure reply route matter, especially where the same practice handles several family members or businesses. Good workflow design reduces repeated questions without replacing professional judgement.
Choose software by the work it needs to do
Start with your actual income sources and records. A sole trade, a UK property business and foreign property can involve different requirements. A product suitable for one set of circumstances is not automatically suitable for every annual-return item you might have.
HMRC's software guidance allows different approaches, including software connected to existing spreadsheets. Check the complete workflow: importing or recording transactions, reviewing the quarterly summary, submitting it, making corrections and completing the annual return.
Try a representative sample that includes a refund, a private transaction, a cash item and an awkward bank description. Ask how the system handles a missing period and how you export records if you leave. These questions are more informative than a long feature list.
Software support and professional tax advice are different services. Confirm who answers each kind of question, when help is available and what the quoted fee covers. Avona.app's entry-level self-service price is £15/month; professional services and additional product capabilities should be checked against the current scope rather than assumed to be included.
A review that checks more than the total
Start with coverage: the correct person, business and period, plus all relevant accounts and cash records. Then look at completeness. A feed can be connected today while still missing an earlier week. Confirm the earliest and latest transactions against the source.
Next, inspect unusual items. Large transfers, loan receipts, refunds, net settlements and private purchases often need more context than a bank description provides. Check for duplicate imports where a statement overlaps a live feed. An automatic warning is useful evidence to investigate, not proof that the entry must be removed.
Finally, review category totals. A category unexpectedly showing zero, a large increase or a negative amount deserves an explanation. You do not have to make every annual tax adjustment at this stage, but you should understand the records behind the summary you approve.
HMRC explains what quarterly updates contain. Keep the approved version and the resulting acknowledgement together. If something later changes, correct the source record and use the software's supported update process so you can explain which figures are current.
Improve the process before scaling it
Pilot a representative client group, measure query volume and review turnaround, and adjust the engagement before rolling out. Quote catch-up work explicitly. Give clients a simple record-supply routine and staff a clear escalation route for exceptions.
Take the next step
Avona.app offers a self-service route from £15/month. Bring your records together, review the figures and choose a workflow that fits your business. For professional help, discuss the scope and total price of Avona Concierge, managed by chartered accountants, before choosing a service.