SimpleReturns

Company tax returns for IT and software companies

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

The filing job is the same for every limited company in the UK: once a year your company sends HMRC a Company Tax Return (a form called the CT600) with a set of accounts, and it is due even in a year the company made a loss. Your version of it as a software business looks like this: your income is project fees, licence fees and subscriptions, your biggest costs are the software and cloud you run on plus the kit you buy, and the tax is worked out on the profit left after those costs. The one thing this trade gets wrong is putting a computer you also use at home "through the company", because a company cannot just claim a private share the way a sole trader can.

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 a customer pays your company for your work is company income: fixed project fees for a build, day rates for contract development, licence fees for software you sell, and subscriptions if you run a product. If you invoice several clients and also run a small SaaS on the side, it all goes in the same pot.

One thing to get right if you take card or subscription payments through a processor like Stripe. Your income is the full amount the customer was charged, not the slightly smaller amount that lands in the bank after the processor takes its fee. Your turnover is the gross figure, and the processor's fee is a separate cost the company claims. The processor's statements show both sides, which is why you keep them.

The good news is that Corporation Tax is worked out on profit, not on that total: what came in, minus what it genuinely cost to do the work. Two rules catch people out. The return is due even in a quiet year, so if HMRC has asked for one it must go in even at a loss with nothing to pay. And filing late now costs £200 from the very first day.

One more signpost: if your company's VAT-taxable sales go over £90,000 in any rolling 12 months (not a calendar or accounting year), it has to register for VAT, which is a separate job worth an accountant's time.

What can your company claim?

The test for every cost is simple: was it spent purely to do the work? If yes, it usually comes off the profit before tax. A company cost has to be for the business, though: a part-personal cost is not one you put a share of through the company (more on this trap just below). The costs software businesses genuinely have:

  • Software and cloud. The subscriptions and licences you run the business on: your cloud hosting bill, code and project hosting, developer tools and the paid coding tools your developers use, design and testing software, a domain. Bought purely for the work, claimed by the company. One honest flag: a lot of this is bought from suppliers outside the UK, and buying digital services from abroad can bring in extra VAT rules (the "reverse charge") worth an accountant's check.
  • Equipment. Laptops, monitors, a docking station, a server: kit the company buys for the work can usually be claimed in full against profit in the year you buy it, up to a very high yearly limit that covers most equipment. Our guide on claiming equipment and capital allowances goes deeper.
  • A company mobile phone. If the company takes out the contract in its own name and gives you one phone, the cost is the company's and there is no extra tax on you for it.
  • Paying other developers. If you bring in another developer to deliver part of a project, their invoice is a cost of doing the work. One caveat, below, on when that becomes a status question.
  • 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.
  • 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.

Two honest flags belong here. First, paying another developer is only simple while they are genuinely running their own business. If someone works for you like an employee would, special rules on employment status and off-payroll working (often called IR35) can apply, and getting that judgement right is a job for an accountant, not a guess. Second, if your company is building something genuinely new in software or technology, there is a Corporation Tax relief for research and development that can be valuable, but it is complex and easy to get wrong, so treat it as an accountant conversation, not a box you tick yourself.

The trap: putting your home computer "through the company"

Here is where a company works differently from a sole trader, and it trips people up. A sole trader who uses one laptop for work and home just claims the business share. A company cannot do that with kit it hands to you. A computer the company buys because you need it for the work, used privately only now and then, is fine and creates no personal tax. But something you genuinely use in your private life too, say a powerful machine that doubles as your gaming PC, HMRC can treat as a perk given to you, worked out under its own special rules, leaving the company with extra paperwork and a tax bill on the value.

So keep clearly-for-work kit in the company and keep your private gear yours. If you want the company to buy something you will also lean on heavily at home, ask an accountant first: the perk rules depend on the exact item and how it is used, and that is worth getting right.

What does filing look like with us?

At year end your company owes HMRC a Company Tax Return and Companies House a set of accounts, twelve months after the period ends at the latest, and a late return costs £200 from the very first day.

SimpleReturns is built for businesses like yours. You upload the company bank statement and answer a few plain-English questions. We sort the year's money into the right places, work out the profit and the Corporation Tax, and build both filings. You review every figure before anything is sent. It is free to start, no card needed, and one payment of £99 covers both.

Common questions

Is my whole Stripe payout my company's turnover?

No. Your turnover is the full amount the customer was charged, not the smaller amount that lands after the processor takes its fee. The processor's fee is a separate cost your company claims, and its statements show both sides.

Can my company claim a laptop or server in full?

Kit the company buys for the work can usually be claimed in full against profit in the year you buy it, up to a very high yearly limit that covers most equipment.

Can the company pay for my mobile phone?

If the company takes out the contract in its own name and gives you one phone, the cost is the company's and there is no extra tax on you for it.

Can I put a computer I also use at home through the company?

A computer bought because you need it for the work and used privately only now and then is fine and creates no personal tax. But something you genuinely use in your private life too can be treated as a perk with its own tax bill, so keep clearly-for-work kit in the company and ask an accountant about mixed-use items.

Want your software company's return filed for you?

You upload the company bank statement and answer a few plain-English questions. We sort the year's money into the right places, 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 one payment of £99 covers both filings.

Start your return

And if your year includes an IR35 question, an R&D claim, or kit you also use heavily at home, those parts are worth an accountant's view, 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.