SimpleReturns

Company tax returns for consultants and freelancers

Reviewed by Lee Jones, Founder · Updated 16 July 2026
The short answer

The filing duty is the same for every limited company in the UK: once a year, your company must send HMRC a Company Tax Return (a form called the CT600) with a set of accounts, even in a year it made a loss. Your version of it as a consultant or freelancer looks like this: every project fee and retainer your clients paid the company is company income, the real costs of doing the work come off, and the company pays Corporation Tax on the profit that is left. Your dividends are a separate, personal matter, and that boundary is the one thing this trade most often gets wrong.

Official source. This guide is a plain-English summary of official GOV.UK guidance, not advice. The authoritative source is Company Tax Returns on gov.uk. Always rely on that over our summary.

What counts as your company's income?

One quick signpost before we start. If you sell your time by the day, usually to one main client at a time, our guide for contractors is the closer fit. This page is for consultants and freelancers juggling several clients at once: project fees, monthly retainers, a workshop here, a rush job there.

Everything a client pays your company for your work is company income. A fixed project fee, a monthly retainer, a milestone payment when a phase wraps up, a paid discovery call: all of it lands in the company's bank account and belongs to the company first, not to you. One caveat: if your company is VAT registered, the VAT you add to an invoice is not your income; it is collected for HMRC and passed on. And if the company's income goes over £90,000 across any rolling 12-month period it must register for VAT, which is a separate job worth an accountant.

The good news is that Corporation Tax is not worked out on that total. It is worked out on profit: what came in, minus what it genuinely cost you to do the work. Say your company invoiced £48,000 across the year and spent £6,000 doing the work. The tax is worked out on the £42,000 that is left, not the £48,000.

Two rules catch people out. The return is due even in a quiet year: if HMRC has asked your company for a return, it must go in even at a loss, with nothing to pay. And filing late now costs £200 from the very first day.

What can your company claim?

One test decides it: was the money spent purely to run the business? If yes, it usually comes off the profit before tax. If a cost is partly personal, only the clear business part goes in. Here are the costs consultants and freelancers genuinely have:

  • Working from home. If you regularly work at home, the company can pay you a set £6 a week (£26 a month) towards the extra cost, with no receipts and no extra tax for you. It cannot pay your rent, mortgage or council tax.
  • Software and subscriptions. The tools you pay for purely to do the work: design software, cloud services, scheduling tools, a paid email service.
  • Professional fees. The accountant or bookkeeper who prepares the company's accounts is a normal company cost. Their fee for your own personal tax return is not: that one is yours.
  • Business insurance. Cover you buy purely because of the business, such as insurance in case a client says your work caused them a loss, passes the same purely-for-business test.
  • Paying other freelancers. If you bring in another freelancer to deliver part of a client project, their invoice is a cost of doing the work. One caveat: when you take someone on, whether they are genuinely self-employed (an employment-status or IR35 question) can matter, and that is worth an accountant's view rather than an assumption.
  • Conferences and business travel. The ticket for an industry conference you attend for the business, the train there, and a hotel if you must stay over. Driving your own car on a business trip is claimed at a set rate per mile (55p for the first 10,000 business miles in a year, then 25p). One caveat: a regular trip to the same usual workplace is normal commuting, and that is not claimable; a one-off trip to a client or a conference is different.

Keep a record of each cost, and where something is part personal, claim only the business share.

The trap: whose tax is it, the company's or yours?

Most consultants pay themselves with a small salary plus dividends, and this is where the company's return and your personal tax get tangled. Here is the boundary in one paragraph. The company's return (the CT600) covers the company's profit only. A salary the company pays you through payroll is a company running cost, so it comes off the profit before Corporation Tax is worked out. A dividend is the opposite: it is a share of the profit paid out after Corporation Tax, so it does not reduce the company's tax bill by a penny. Any tax due on your dividends is your personal tax, handled on your own Self Assessment if you go over your allowances (you get a £500 dividend allowance each year). So the company files its return on its profit, and your dividends live on your personal side of the fence. Our guide on paying yourself a salary and dividends walks through the whole thing.

One honest flag while we are here. If a client would treat you as one of their employees were it not for your company sitting in between, special rules called off-payroll working (IR35) can apply, and getting that judgement right is genuinely a job for an accountant, not a guide.

What does filing look like with us?

You upload your company's bank statement and answer a few plain-English questions. We sort the year's money into the right places, apply the rules above, work out the profit and the Corporation Tax, and build both filings: the tax return for HMRC and the accounts for Companies House. You see every figure before anything is sent. It is free to start, and one payment of £99 covers both filings.

Common questions

Is everything my clients pay the company taxed?

No. Corporation Tax is worked out on profit, not on everything invoiced. What your clients paid the company for your work is income, then the real costs of doing the work come off, and the tax is on the profit that is left. If the company is VAT registered, the VAT added to invoices is not income either; it is collected for HMRC.

Do my dividends lower the company's Corporation Tax?

No. A dividend is paid out of profit after Corporation Tax, so it does not reduce the company's bill by a penny. A salary paid through payroll is a company cost and does come off the profit. Any tax on your dividends is your personal tax, handled on your own Self Assessment if you go over your allowances.

Can the company pay me for working from home?

If you regularly work at home, the company can pay you a set £6 a week (£26 a month) towards the extra cost, with no receipts and no extra tax for you. It cannot pay your rent, mortgage or council tax.

Do I still have to file if the company had a quiet year?

Yes. If HMRC has asked your company for a return, it must go in even at a loss, with nothing to pay. Filing late now costs £200 from the very first day.

Want your consultancy's return filed for you?

You upload your company's bank statement and answer a few plain-English questions. We build your accounts and the CT600, work out the profit and the Corporation Tax, and show you every figure before anything is sent. Free to start, and one payment of £99 covers both filings, the tax return to HMRC and the accounts to Companies House.

Start your return

And if your year includes an IR35 question or an unusual salary and dividend mix, an accountant may be the better fit for that part, and that is an honest call to make.

General guidance, not advice. This guide explains how the rules generally work for small UK limited companies. It isn't tax advice for your specific situation, if you're unsure, check with us or an accountant.