Accountants for consultants and professional services

Consultancy is one of the few businesses where your biggest tax decision has almost nothing to do with your invoices. You sell expertise, your costs are low, and your margins are healthy, which means the real question is how you’re set up and how you take your money out. Get the structure right and you keep noticeably more of your fees, entirely legitimately. Get it wrong, or never revisit it, and you quietly overpay year after year. That decision is exactly where we earn our keep.

Reviewed July 2026. Tax rules change and the right structure depends on your circumstances. Always check GOV.UK or speak to us before acting.

What’s different about consultancy accounting

Unlike a shop or a builder, a consultant has few materials, little stock and not much to reclaim VAT on. So the levers that matter are different: your business structure, how you pay yourself, your allowable expenses, whether IR35 touches you, and how you handle VAT on work for clients at home and abroad. These are advisory questions, not just compliance ones, and they are the sort of thing a generalist accountant rarely raises unprompted. We raise them, because they are where the money is.

Sole trader, limited company or LLP?

This is the decision that shapes your tax bill, and there is no single right answer.

• Sole trader is simplest, with profits taxed as personal income. It often suits consultants in the earlier years, where the difference from a company is marginal.
• Limited company usually wins once your profits are comfortably into the higher range, because you can take a tax-efficient mix of salary and dividends and, importantly, retain profit in the company to defer personal tax rather than being taxed on everything at once.
• LLP suits two or more people who want the tax treatment of a partnership with the protection of limited liability. Members are taxed as self-employed on their profit share.

The nuance most people miss: an LLP member cannot leave profit in the business to defer tax the way a company director can. You are taxed on your profit share when it arises, whether or not you draw it. So consultants who take everything each year can be better off in an LLP, while those who want to retain and reinvest often prefer a company. We run the numbers for your situation rather than reaching for a default.

LLPs and professional firms

A lot of professional practices (management consultancies, solicitors, architects, surveyors and the like) operate as LLPs, and they have their own points to get right. The LLP files accounts at Companies House, needs at least two members and designated members to handle its filings, and each member reports their profit share through Self Assessment. There is also an anti-avoidance rule to be aware of: the “salaried member” rules can treat a member as an employee for tax if they look more like staff than a genuine partner, which changes the tax and National Insurance position. Getting the membership terms, capital and profit-sharing right keeps everyone on the correct footing, and it is exactly the kind of thing we handle for professional firms.

Keeping more of your fees

Once your structure is right, the day-to-day planning does the rest. We make sure you claim every legitimate expense (professional subscriptions, indemnity insurance, equipment and software, training, allowable travel and a share of home-office costs), extract profit efficiently, and use pensions and timing sensibly. One warning specific to consultants: if you register for VAT and consider the Flat Rate Scheme, watch the “limited cost trader” rule, because with barely any goods to buy, many consultants land on a 16.5% rate that removes the benefit. Our VAT schemes guide explains it, and we always check before you choose.

IR35, where it applies

If you work through your own company on client contracts, IR35 (the off-payroll rules) can be relevant. Genuine, deliverables-based consultancy is usually outside IR35, but if in practice you are filling a role like an employee, it can bite, and the take-home difference is significant. We review your contracts and how you actually work so your position is sound rather than assumed. Our contractors hub covers the mechanics in more depth.

VAT and international clients

Consultants often work for clients abroad, and the VAT treatment of services depends on where your client belongs. Many B2B services to overseas businesses fall outside UK VAT, with the customer accounting for it under their own rules, but the detail matters and mistakes are common. We make sure your invoicing and returns are right, at home and across borders, and keep an eye on the £90,000 threshold as you grow.

Making Tax Digital

If you’re a self-employed consultant (sole trader) with income over £50,000, Making Tax Digital for Income Tax applies from April 2026, meaning digital records and quarterly updates. We get you set up so it’s routine. Our MTD for Income Tax guide has the detail.

What we handle for you

On one fixed monthly fee: advice on the right structure (and switching structure when it’s time), company or LLP accounts, members’ or director’s tax, tax-efficient profit extraction, IR35 reviews, VAT including international work, expenses, and MTD. You get a dedicated accountant, our 3-hour email promise, and plain-English advice, whether you’re a solo consultant or a growing firm.

Why consultants and firms choose Xpert

Most consultants come to us either unsure whether their setup still fits, or with a generalist accountant who files the numbers but never advises on them. We are proactive: fixed monthly fees, a real person who understands professional services, no long tie-ins, and we handle the switch from your current accountant for you.

Consultant or professional firm wondering if your setup is costing you? Take our 2-minute quiz or book a free consultation, and we’ll show you the most efficient way to run it.