London, May 13, 2026, 18:07 BST
Sage Group plc slipped 3.55% to 847.6p in London trading on Wednesday, trailing the FTSE 100’s gains. The accounting-software company just rolled out a new, wider AI offering for UK tax, but investors are now waiting to see if next week’s half-year numbers will back up management’s AI ambitions with solid growth.
Timing is key here. The update arrives just a few weeks after the launch of the UK’s Making Tax Digital for Income Tax rules, which now require many sole traders and landlords to maintain digital records and submit quarterly reports to HMRC using approved software.
Sage has rolled out an updated MTD for Income Tax Agent that, according to the company, can spot eligible sole-trader clients, set up quarterly reporting jobs, check data, and match HMRC income sources with client records by using National Insurance numbers. The company expects quarterly update jobs to start around June, with the first submission deadline landing in August.
There’s little patience for underperformance right now. Sage is set to release its H1 FY26 results on May 21. Analysts tracked by the company expect organic revenue to climb 9.8%, with recurring revenue seen rising 10.0%. Underlying operating profit is forecast at £324 million for the half. Organic growth excludes both acquisitions and currency shifts; recurring revenue covers subscriptions and comparable contracts.
Lisa Ewens, Sage’s senior vice president for small business and accountants product, described MTD as “one of the biggest operational changes UK practices have faced in years.” Sage claims its software gives accountants the final say, yet automates more of the quarterly process ahead of review and filing. Sage
Sage competes for attention in the same compliance window as rivals, with both Xero and Intuit’s QuickBooks pitching their own MTD tools to UK accountants and businesses. HMRC, meanwhile, urges taxpayers to pick software from the list of compatible options before joining.
Sage continues its share repurchases. According to a Tuesday filing, the company picked up 1.44 million shares at a volume-weighted average of 869.0361p and plans to cancel them. The buyback is part of a programme that launched in March and wraps up by June 5.
Sage set a ceiling of £300 million for its March buyback, describing the move as consistent with its capital allocation policy and a sign of confidence in what’s ahead. That upbeat message is under strain, though, with shares struggling to recover last year’s peak.
Recent market action bought management a bit of breathing room. Back in January, Chief Financial Officer Jacqui Cartin pointed to what she called a “strong start to FY26”: first-quarter revenue hit £674 million, up 10%. Sage Business Cloud climbed 15% to £574 million, and software subscription sales rose 12% to £568 million.
Sage is pitching AI as a support tool for finance teams, not a mysterious system calling the shots. “Almost right isn’t good enough” in finance, CTO Aaron Harris said last month, as Sage rolled out more AI agents across finance, HR, and operations. These agents do more than respond to queries—they can handle tasks in a workflow, like generating reminders or processing approvals. Sage
The risk is hard to ignore. Should accountants drag their feet, or if clients balk at higher automation costs, there’s a real chance that AI tools end up shrinking the number of paid software seats companies require. That could make it tough for new products to counteract the broader squeeze on software valuations. Back in February, Schroders analyst Jonathan McMullan flagged the debate to Reuters — investors are questioning if AI spells trouble for the sector’s old “visibility premium.” Reuters
Newcastle-headquartered Sage, a FTSE 100 name, sells accounting, finance, HR, and payroll software to small and mid-sized businesses, with offerings like Sage Accounting, Sage Intacct, Sage X3, and Sage Payroll. But as the company readies its upcoming update, the question is blunt: is AI driving new software sales, or just rattling investors about the legacy model?
