Accountants for consultants
We review IR35 status on each engagement, plan your employer pension contribution before the year end and check your VAT scheme against your actual figures.
A consultancy’s company year
Pension, status and the VAT scheme reviewed
The pension contribution paid before it
Corporation tax due
Accounts at Companies House, then the CT600
- Every engagement
IR35 status reviewed for each engagement.
- Every VAT quarter
Return and payment, one month and seven days after the period ends.
- Month nine
Pension, status and the VAT scheme reviewed while the year end can still be planned for.
- Before the year end
The pension contribution has to be paid, and not simply decided.
- Your year end
Everything company-side is measured from it, including the pension deadline.
- +9 months, 1 day
Corporation tax due.
- +9 / +12 months
Accounts at Companies House, then the CT600 at HMRC.
Source: gov.uk Corporation Tax, VAT flat rate scheme and off-payroll working guidance, checked July 2026. See key tax dates.
Tax for a business with few costs
A consultancy has no stock, little equipment and very few purchases. With little to deduct, profit is close to revenue and so is the tax.
An employer pension contribution and IR35 status make the biggest difference to a consultant’s tax. Both have to be settled before the year end, so we review them around month nine of your financial year.
Corporation tax saved by an employer pension contribution
£5,300
£20,000 into your pension costs the company £14,700 after tax, because profit in the £50,000–£250,000 band carries an effective 26.5% marginal rate. The contribution has to be paid before the year end to count.
For a consultancy with no plant and few costs, an employer pension contribution from the company is usually the single largest legitimate reduction in the corporation tax bill.
A one-person consultancy, year to 31 March 2027, £120,000 of profit before any pension contribution. No associated companies.
| No contribution | £20,000 contribution | |
|---|---|---|
| Profit before pension contribution | £120,000 | £120,000 |
| Employer pension contribution | – | −£20,000 |
| Taxable profit | £120,000 | £100,000 |
| Corporation tax, 25% less marginal relief | £28,050 | £22,750 |
| Corporation tax saved | £5,300 |
Marginal relief of 3/200 × £130,000 and 3/200 × £150,000. Worked through at 2026/27 rates from our own calculators, which follow gov.uk guidance checked in July 2026. This is an example and your figures will differ.
Off-payroll working
If you work through your own company for a medium or large client, that client decides your IR35 status and issues a determination. If the client is small, the decision stays with your company — and so does the liability if it is wrong. The answer turns on control, substitution and mutuality of obligation. What the contract calls you does not settle it.
A medium or large client
The client decides your IR35 status and issues a Status Determination Statement, which you can challenge. The same applies to all public-sector bodies.
A small client
The decision stays with your company, and so does the liability if it is wrong.
What if I am working through my own company for one main client?
Then IR35 needs looking at properly, because a single long-term client with fixed hours and integration into their organisation is the pattern that attracts scrutiny. Status depends on control, substitution, mutuality of obligation and financial risk rather than on your job title or the fact you invoice. For medium and large private-sector clients and all public-sector bodies, they issue a Status Determination Statement, which you can challenge. Get the contract and the working practices reviewed before signing rather than after the determination arrives.
16.5%
The flat rate scheme
The flat rate scheme was designed for businesses that buy things. The limited cost trader rules put most consultancies on 16.5%, which for a business with almost no purchases is worse than the standard scheme once you account for the input tax you give up. Recalculate it each year on your actual figures.
Should I register for VAT?
Compulsory over £90,000 of rolling twelve-month turnover, which most full-time consultants cross. Below that, voluntary registration makes sense when your clients are VAT-registered businesses that reclaim it anyway, because you then recover VAT on your own costs. If you advise charities, small unregistered businesses or individuals, it makes you 20% more expensive. Check the Flat Rate Scheme carefully rather than assuming it saves money — consultants usually fall foul of the limited cost trader rule and end up on 16.5%, which removes most of the benefit.
The 24-month rule
Travel to a client site stops being allowable once you know you will be there for more than 24 months, and the clock starts when you know, which is earlier than the date you pass it. Long engagements at one client are where consultants most often have expenses disallowed.
Work in progress
Time spent on a fixed-fee engagement that has not been invoiced is still an asset and it belongs in the accounts, or the monthly figures understate the work done.
What we do for consultants
Status reviewed on every engagement
The contract and the working practices, because HMRC looks at both.
The pension decision, before the year end
Modelled on your actual profit while there is still time to pay it.
The VAT scheme recalculated
Flat rate against standard, once a year, on your actual figures.
The 24-month clock watched
On every long engagement, so travel stops being claimed at the right moment.
Work in progress in the numbers
Unbilled work on fixed-fee engagements included in the monthly figures.
A review in month nine
Pension, status and the VAT scheme reviewed while the year end can still be planned for.
Frequently asked questions
How much does it cost?
Accounts and tax start at £29 + VAT a month for a sole trader and £49 + VAT for a limited company, the fee rises with turnover, and the instant quote shows yours in four questions. Consulting is usually one of the simpler engagements — modest transaction volume, few or no staff — so the quote is straightforward, and the variables are whether you are VAT registered, whether you run a company or trade as a sole trader, and whether there is any payroll. FreeAgent is included, worth up to £330 a year. Questions, including a structure decision that comes up mid-year, are covered by the monthly fee.
Sole trader or limited company — which should I be?
Start as a sole trader unless something specific points the other way, and revisit it annually. The tax gap is narrower than it used to be once Corporation Tax at 19% to 25% and dividend rates are counted, and a company adds public accounts, payroll, filings and cost. The reasons to incorporate are profits consistently above what you need to draw, clients who will only contract with a company, and liability you want ring-fenced. Incorporating does not automatically save tax. See the comparison guide.
Is my income lumpy enough to be a problem?
Usually, yes. Consulting income arrives in blocks — a three-month engagement, then a gap — while tax, VAT and drawings fall due on fixed dates. Move a fixed percentage of every payment received into a separate tax account the day it lands, and keep a buffer of two to three months of personal costs.
What expenses can I actually claim?
Professional subscriptions and indemnity insurance, equipment and software, training that maintains existing skills, accountancy fees, and the business proportion of home working and phone. The two that get challenged most are travel and subsistence, where journeys to a client that has become your normal place of work are commuting rather than business travel, and training that develops a genuinely new skill rather than maintaining an existing one — the latter is often treated as capital and disallowed. Keep the records digitally as you go.
Advisory and finance support for growing businesses
Business Pulse
An annual budget, a rolling 12-month cash flow forecast, management accounts and a review meeting every month or quarter, on top of your accounts fee.
From£750+ VAT a monthOutsourced finance team
Bookkeeping, payroll, VAT, customer invoicing and month-end, done for you in Xero.
From£2,000+ VAT a monthPart-time finance director
Peter Allen as your fractional finance director: an annual plan, a cash flow forecast, a KPI dashboard and a quarterly board meeting.
Get a quote
Answer four questions to see the monthly fee. The full proposal is emailed to you.
Call or WhatsApp 07476 989568 or email hello@buzzaccounting.co.uk
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