What counts as your company's income?
Everything your company earns for teaching, however it arrives. That means one-to-one lesson fees, group sessions, block bookings paid up front, online lessons, and money from selling a course or a set of materials. If a student books and pays through a tutoring platform that keeps a slice as commission, the full amount the student paid is your company's income, and the slice the platform kept goes on the costs side instead.
Two things catch teaching businesses out here. First, cash counts. The £30 a parent hands you after a lesson is company income the moment you take it, exactly like a bank transfer. More on that below. Second, quiet years still count. If the company earned very little, or made a loss, it still has to send the return.
One to watch as you grow: your turnover for VAT is the gross lesson income before any platform takes its commission. If that goes over £90,000 across any rolling 12 months, and that means the last 12 months at any point, not a calendar or accounting year, the company must register for VAT. You may have heard that private tuition is "VAT-exempt". That exemption is for a teacher working for themselves, not for a limited company, so a tuition company that crosses the threshold generally does have to register and charge VAT. This one is genuinely worth an accountant.
What can your company claim?
One test decides it: was the money spent purely to run the business? If yes, the cost comes off your income before Corporation Tax is worked out, so it is money you do not pay tax on. These are the costs teaching businesses genuinely tend to have.
- Teaching materials. Textbooks, workbooks, printing, a whiteboard, stationery and the practice papers you buy to run lessons. A plain cost of the work.
- Equipment. A laptop or tablet, a webcam, a graphics pad for online lessons. For almost every small company the full cost comes straight off your profit in the year you buy it, up to a very high yearly limit. If a piece of company equipment is also used privately at home in a real way, that has its own tax angle and is one to raise with an accountant rather than guess at.
- Online tools and room hire. The video-calling tool, the booking and scheduling software, the online whiteboard, and a room or hall you hire to teach in. Costs you pay purely to deliver lessons.
- DBS and registration checks. The checks and memberships you need before you are allowed to teach, especially with children, are a genuine cost of doing the work.
- Insurance. Public liability and professional cover for teaching.
- Courses and CPD. Training that keeps the skills you already sell up to date, or adds new ones for the teaching your company already does, sits on safe ground: a subject refresher, a new teaching qualification, a safeguarding course. The company can fund work-related training like that with no extra personal tax for you. The one to check with an accountant is a genuinely unrelated retraining, into a field that is not really your company's teaching.
- Mileage to students. If you drive your own car to a student's home or to a hall you visit for one session, the company can pay you a set rate per business mile: 55p a mile for the first 10,000 business miles in the tax year (6 April to 5 April), then 25p after that. Your everyday drive to a fixed base you always teach from is a commute, not a business journey, so it does not count. Our guide on claiming travel and mileage goes deeper.
What if a lesson is paid in cash?
Here is the one that catches tutors more than anything else, and it is almost never dishonesty. It is habit. A parent pays £30 in cash at the door, it goes in your pocket, and by the weekend it has become a food shop. It never touches the company's bank account, so when filing time comes, it is invisible.
The rule is plain: your company's records must cover all the money it received, not just the money that reached the bank. Income is income whether it was banked or not. A return built only from the bank statement, when cash lessons happened off it, understates your income, and HMRC can fine a company £3,000 just for poor records, before any question about the tax itself.
The fix is small. Either pay cash takings into the company account, or write every cash lesson down the same day, even in a notes app: date, amount, done. Then the income is on the return where it belongs. One more thing: that cash was the company's money, so spending it on your own food shop is really you taking money out. Taking company money is its own question, a salary, a dividend or a director's loan, each with its own rules, so if you have been dipping into cash all year it is worth an accountant's look, not just declaring the income and moving on.
What does filing look like with SimpleReturns?
You upload your company's bank statement and answer a few plain-English questions, and one of them is about cash, asked straight: did any lessons get paid in cash that are not in the bank statement? You tell us the figure, and it lands in the right place.
From there we sort your year into income and costs, apply the rules above, work out the profit and the Corporation Tax on it, and build your accounts and your CT600. Most tutoring companies sit comfortably in the small profits band, meaning profits up to £50,000, where the rate is 19 percent. You check every figure, then we file to HMRC and Companies House for you. One flat £99 for the submission, free to start, no card needed.
One honest deadline note: the return is due 12 months after your company's year end, the tax is usually due earlier, at 9 months and 1 day, and a late return now costs £200 from the very first day. Filing early costs nothing and ends the worry.