For any business, knowing how to value and price what it sells is fundamental to success. Yet many small firms still rely on guesswork or simply copy competitors’ prices without understanding whether their own costs, quality or value proposition justify those figures. Accountants can play an important role in helping clients to take a structured approach to pricing and valuation, ensuring that products and services deliver both profit and sustainability.

Understand the true cost base
The starting point for any pricing decision is to establish the real cost of production or service delivery. This includes not only direct costs such as materials, wages and subcontractors, but also a fair allocation of overheads such as rent, utilities, marketing and administration. Once a business has a full understanding of its cost base, it can identify the minimum viable price required to cover costs and earn a profit margin. Accountants can assist by reviewing costing methods and ensuring that indirect costs are not overlooked.

Add value, do not just add margin
Too many businesses apply a simple markup to costs and call it pricing. A more strategic approach looks at the perceived value from the customer’s perspective. What problems does the product or service solve, how is it different and what benefits does it offer compared with competitors? Value-based pricing allows firms to charge more when the customer sees a clear benefit or saving. For example, if a service saves a client several hours each week, the price can reflect part of that time saving as additional value.

Use segmentation and flexibility
Not all customers are the same and pricing does not have to be either. Offering packages or tiers can help serve different market segments without undercutting core pricing. For example, a “standard,” “premium,” and “enterprise” level can target different budgets and expectations. Seasonal discounts, early payment incentives, or loyalty pricing can also be effective if managed carefully. The key is consistency and transparency.

Monitor performance and adjust regularly
Pricing is not a one-off exercise. Markets, costs and demand all change. Businesses should regularly review their margins, conversion rates and customer feedback to assess whether their pricing remains competitive and profitable. Accountants can add value by providing performance reports and benchmarking against industry standards.

If you would like help reviewing your pricing structure or working out how to value what you sell, please get in touch. We can help you analyse your costs, benchmark performance and design a pricing model that supports long-term profitability.

Companies can reduce their Corporation Tax bill through a range of reliefs, including R&D credits, Patent Box, and creative industry tax reliefs, all of which will help to lower the overall tax on profits. Your company can also claim capital allowances for assets such as equipment, machinery and cars bought to use in your business.

The basic Corporation Tax reliefs include the following:

Research and Development tax reliefs – The R&D expenditure credit (RDEC) and enhanced R&D intensive support (ERIS) came into effect for accounting periods beginning on or after 1 April 2024. While the expenditure rules for both are the same, the calculation methods differ. The merged RDEC scheme is a taxable expenditure credit available to eligible trading companies subject to UK Corporation Tax. Even if a company qualifies for the ERIS, it may choose to claim under the merged scheme instead, but both schemes cannot be claimed for the same expenditure.

The Patent Box – This relief allows qualifying companies to apply a lower 10% corporation tax rate on profits arising from patent exploitation.

Creative industry tax reliefs (CITR) – This is the term for a collection of Corporation Tax reliefs that allow qualifying companies to claim a larger deduction, or in some circumstances claim a payable tax credit when calculating their taxable profits. The relief applies to qualifying expenditure in the production of certain films, high-end television, animation, video games, children’s television, theatre, orchestra and museum & galleries exhibitions.

Relief on goodwill and relevant assets – If the relief is available, it is at a fixed rate of 6.5% a year. This is on the lower of the cost of the relevant asset or 6 times the cost of any qualifying IP assets in the business purchased.

Loss relief – There are various Corporation Tax reliefs that may be available where your company or organisation makes a trading terminal, capital or property income losses. For example, trading losses may be used to claim relief from Corporation Tax by offsetting the loss against other gains or profits of the business in the same or previous accounting period.

If you are UK resident and receive income from abroad, such as overseas wages, rent, or investments, you may need to pay UK Income Tax and report it through Self-Assessment.

Income Tax is generally payable on taxable income received by individuals including earnings from employment, earnings from self-employment, pensions income, interest on most savings, dividend income, rental income and trust income. The tax rules for foreign income can be complex. 

However, as a general rule if you are resident in the UK you need to pay UK Income Tax on your foreign income, such as:

• wages if you work abroad
• foreign investments and savings interest
• rental income on overseas property
• income from pensions held overseas

Foreign income is defined as any income from outside England, Scotland, Wales and Northern Ireland. The Channel Islands and the Isle of Man are classed as foreign. Different rules may apply if you’re eligible for Foreign Income and Gains relief.

If you are a UK resident, then you will usually need to complete a self-assessment tax return for foreign income or capital gains. The main exceptions are if your only foreign income is dividends and your total dividends (including UK dividends) are less than the £500 or you have no other income to report.

If you have tenants in your home, it’s essential to understand the Capital Gains Tax (CGT) implications. Typically, there is no CGT on the sale of a property used as your main residence due to Private Residence Relief (PRR). However, if part of your home has been let out, your entitlement to PRR may be affected.

Homeowners who let out part of their property may not qualify for the full PRR, but they could be eligible for letting relief. Letting relief is available to homeowners who live in their property while renting out a portion of it.

The maximum letting relief you can claim is the lesser of the following:

• £40,000
• The amount of PRR due
• The chargeable gain made on the part of the property let out

Example:

• You rent out a large bedroom to a tenant, making up 10% of your home.
• You sell the property and make a gain of £75,000.
• You qualify for PRR on 90% of the property (£67,500).
• The remaining gain of £7,500 relates to the portion of the home that’s been let.

In this case, the maximum letting relief due is £7,500, which is the lower of:

• £40,000
• £67,500 (the PRR due)
• £7,500 (the gain on the part of the property that’s been let)

As a result, you would not owe any CGT—the £75,000 gain is fully covered by £67,500 in PRR and £7,500 in letting relief.

Note that if you have a lodger who shares living space with you or if your children or parents live with you and pay rent or contribute to housekeeping, you are not considered to be letting out part of your home for tax purposes.

Employees who are working at home may be entitled to claim tax relief on certain work-related expenses. Where such costs are not reimbursed by the employer, either by direct payment or an allowance, employees can submit a claim for tax relief directly to HMRC.

Eligibility to claim tax relief applies when homeworking is a requirement of the role. This may be the case if an employee's job necessitates living at a distance from the office, or if the employer does not maintain a physical office. Tax relief is generally not available where homeworking is a personal choice, even if permitted under the terms of the employment contract or where the office is occasionally at capacity.

Employees may claim a flat-rate tax relief of £6 per week (or £26 per month for monthly-paid staff) to cover additional household costs incurred as a result of working from home, without the need to retain detailed expense records. The value of the relief depends on the individual’s highest marginal rate of tax, for example, a basic-rate taxpayer (20%) would receive £1.20 per week in tax relief (20% of £6). Alternatively, individuals may opt to claim the actual additional costs incurred, provided they can supply evidence to HMRC in support of the claim.

Backdated claims for up to four previous tax years are permitted.

Tax relief may also be available for the use of a personal vehicle be it a car, van, motorcycle or bicycle when used for business purposes. Relief is not available for ordinary commuting between home and a regular place of work. However, where travel is to a temporary workplace, or where the vehicle is used for other qualifying business journeys, tax relief may apply.

In addition, employees may claim tax relief on the cost of equipment purchased personally for work-related purposes, such as a laptop, office chair, or mobile phone, provided these are used exclusively or primarily for business use.