SimpleReturns

Company tax returns for dance schools and fitness studios

Reviewed by Lee Jones, Founder · Updated 17 July 2026
The short answer

If you run classes through a limited company, whether that is a dance school, a yoga or pilates studio or a martial arts club, the yearly filing job is the same as for every company in the country: a Company Tax Return (the CT600) to HMRC and accounts to Companies House, even in a year you made a loss. Your version has its own shape: class fees, term fees and memberships coming in, often through a booking app that pays you after taking its cut, and a studio, equipment, a music licence and several instructors on the costs side. The instructors are also your trade's big trap. If you are a solo trainer without premises or a team, our guide for personal trainers is the better fit.

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?

Everything people pay your company so they, or their children, can train with it: class fees and memberships, term fees paid up front, workshops and holiday camps, and the exam or grading fees you charge students. Two more that get missed: selling costumes, uniforms or belts to students is ordinary trading income too, with the stock you bought on the costs side, and money other teachers pay to hire your studio between classes is company income as well.

Two habits of this trade need care. First, booking apps pay you net. If a student pays £10 for a class and the app passes on £9.40 after its fee, your company's income is the full £10 and the 60p is a cost. Record both in full; do not just book what landed in the bank. Second, cash at the door counts. The £5 notes parents hand over at a Saturday kids' class are company income the moment you take them, banked or not. Records must cover all money the company received, and HMRC can fine a company £3,000 just for poor records, so write cash takings down the same day.

Your Corporation Tax is then worked out on the profit. Small companies pay 19% on profits up to £50,000, and bigger profits move towards 25%.

One growth warning: if your company's taxable takings pass £90,000 over any rolling 12-month period, not a calendar or accounting year, it must register for VAT. And do not assume classes are exempt as "education": there is a narrow VAT carve-out for private tuition, but it applies only to sole traders and partners personally teaching a subject of the kind ordinarily taught in schools. A limited company cannot use it, so count all your class income towards the £90,000 line. This is one of the few places where running a company genuinely changes the tax answer.

What can your company claim?

The rule behind every cost is simple: it has to be for the business. For a studio business the usual list looks like this:

  • The studio itself. Rent for the studio or hall time, business rates, electricity, heating and water.
  • Mirrors, barres, mats and kit. Wall mirrors, ballet barres, crash mats, weights, reformers and the sound system count as business equipment, and an allowance lets the company claim the full cost against its profit in the year you buy it, up to a very high yearly limit. That matters in the year you fit out a new studio.
  • Instructor payments. Wages paid to employed instructors through payroll, and invoices from genuinely self-employed instructors, are company costs. The word "genuinely" is doing real work there; see the trap below.
  • The music licence. To play recorded music at your business you generally need TheMusicLicence from PPL PRS. For a dance or fitness studio that is a real, ordinary cost of running classes, and the company claims it.
  • Insurance. Public liability cover for students in your care and cover for the studio and its equipment.
  • Exam board and affiliation fees. What the school pays its exam board or governing association so students can train and grade under it.
  • Cleaning. The cleaner and the supplies for the studio are company costs.

One honesty note: a company cost has to be for the business, full stop. Something bought for your own life does not become claimable because the company paid, and company kit you also use personally in a real way raises a separate personal tax question, a perk, rather than a part-claim. If something big sits in both worlds, ask an accountant before you book it.

The trap in this trade: calling an instructor self-employed does not make it so

Most studios use a mix of regular instructors and cover teachers, and the comfortable habit is to treat everyone as self-employed and pay against invoices. But employed or self-employed is a legal status, not a label you and the instructor pick. It decides the person's rights, your company's responsibilities as an employer, and how tax is handled, tax law can even answer it differently from employment law, and in a dispute a tribunal makes the final call, not your contract.

Getting it wrong is expensive in arrears, so check up front. HMRC has a free online tool that asks about the real working relationship and says whether someone should be treated as employed or self-employed for tax, and HMRC stands by the answer as long as what you told it is accurate. If the answer is "employed", or you are hiring your first regular instructor, this is a part of running a studio where proper advice pays for itself. Our guide on taking on your first employee walks through what being an employer involves.

What does filing look like with us?

At year end your company has two deadlines to keep apart. The accounts go to Companies House within 9 months of your year end, and the Corporation Tax itself is due at about the same time, 9 months and 1 day after the year end. The Company Tax Return then goes to HMRC within 12 months. A late return costs £200 from the very first day. HMRC's own free filing service has closed, so every company now files through commercial software.

SimpleReturns is built for businesses like yours. You upload the company bank statement and answer a few plain-English questions, and one of them is about cash, asked straight: did any class money arrive in cash that is not in the bank statement? We sort your year into income and costs, build the accounts and the CT600, you review every figure, then we file both returns for you. It is free to start, no card needed, and filing costs £99 flat for both.

Common questions

My instructors all invoice me as self-employed. Is that fine?

Only if it matches reality. The status depends on the real working relationship, not the invoice. Run HMRC's free status checker for each regular instructor, and if it says "employed", or you are not sure, talk to an accountant before the arrears build up.

Parents pay cash at the door for the kids' classes. Does that really need recording?

Yes, every pound. Company records must cover all money received, banked or not, and HMRC can fine a company £3,000 for poor records. A same-day note of date and amount is enough: £45 taken at Saturday juniors, done.

The booking app pays me after taking its fee. Which number goes on the return?

The full amount your students paid. If they paid £1,000 and the app passed on £940, your income is £1,000 and the £60 fee is a company cost. Booking only the £940 understates both your income and your costs.

Are dance or yoga classes exempt from VAT as education?

No. There is a narrow exemption for private tuition, but it applies only to sole traders and partners personally teaching a subject of the kind ordinarily taught in schools. A limited company cannot use it, so all your class income counts towards the £90,000 VAT line.

Want your studio's return filed for you?

You upload the company bank statement, add any cash takings, and answer a few plain-English questions with no accounting words. We sort the class-fee income and the studio and instructor costs, work out the profit and the Corporation Tax, and build both filings: the tax return for HMRC and the accounts for Companies House. You review every figure before anything is sent. Free to start, no card needed, and £99 flat covers both.

Start your return

And if an instructor's status is in doubt, or your takings are near the £90,000 VAT line, we will flag it plainly so you can get an accountant to sort that one part.

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.