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If I've had a client since my first years of career, and he remained a recurring client for 3 years, is it fine if I increase this year's quotation (accounting for inflation and a "seniority rate" of about 5%)?
Should I explain the changes when I send my quotation?
Absolutely.
Not only is it okay, but it should be in written agreements that billing may increase annually.
It is part of cost of doing business increases - your costs are probably increasing annually from your own vendors.
It maintains a healthy business. While you and your client(s) would best be served by reviewing your billing annually, it is also a good time to review your relationship(s) and learn from your clients.
It help keep clean out clients who are not growing with you. If you business is (hopefully) growing, you are likely increasing your rates with your success. If you have clients who are not growing with you, it might help to discuss alternatives with them.
Since you are in UK the 3 year compound inflation is 4.28-5.31%* since you added 2.6% for inflation for this year only then the net result is that your price hike was only about 2.6%. Which is not much considering you gave non inflation adjusted prices for interim sounds like very moderate price hike.
I wouldn't explain unless the client asks. But then my current clients dont pay anything for my services**, and its been a long time since ive had to do this.
* Bit depending on how you calulate 3 years. Using this data source
** Essentially somebody else pays for them and i negotiate against that unit. But that is totally invisible for my clients, some of them have used 20,000 worth of my services and others 100 its all same to the users their pay does not change. But then I dont do primarily GD services although i do that too if im asked (happened 2 times last year).
