Accountants for UK agencies and consultancies
Agencies and consulting firms bill for time, not stock, which makes the accounting different from most small businesses. We keep retainers, contractor payments and client recharges in the right place, so you can focus on client work.
In short: NDCA is an ACCA-regulated accountancy practice for UK agencies and consultancies. We handle bookkeeping, VAT, payroll, project margin reporting, IR35 status checks for your contractors and your company accounts and Corporation Tax. Your agreed services are covered by one fixed monthly fee, with a named accountant who knows your numbers.
Agencies and consultancies do not run on steady monthly income. A retainer renews, a project closes, a client pays late, a new contract starts mid-month. Your accountant needs to keep up with that rhythm, not force your business into a shape that suits their software.
What NDCA clients say
Verified Google reviews from NDCA clients.
In short: NDCA is an ACCA-regulated accountancy practice for UK agencies and consultancies. We handle bookkeeping, VAT, payroll, project margin reporting, IR35 status checks for your contractors and your company accounts and Corporation Tax. Your agreed services are covered by one fixed monthly fee, with a named accountant who knows your numbers.
Agencies and consultancies do not run on steady monthly income. A retainer renews, a project closes, a client pays late, a new contract starts mid-month. Your accountant needs to keep up with that rhythm, not force your business into a shape that suits their software.
What is on this page?
- The accounting problems that catch agencies and consultancies out
- What can an agency or consultancy claim as an allowable expense?
- Who we work with
- How NDCA works
- Cloud accounting that keeps your numbers current
- Apron for invoice capture
- Switching from another accountant
- Agency and consultancy accounting FAQs
The accounting problems that catch agencies and consultancies out
Most agency owners and consultants set up the business to do the client work, not to think about revenue recognition. But the way retainer income is booked, the way client recharges are tracked and the way contractor payments are documented for IR35, none of it works the same as a normal trading business. Get it wrong and it turns up at the worst possible time: in a cash flow squeeze, in front of HMRC or when a client query reveals nobody actually knows the project margin. We set it up properly from the start.
Retainer income booked on the wrong day
A retainer paid upfront is not three months of income on day one. It is recognised across the period the work covers, with the unearned balance held back. Get this wrong and your management accounts show a spike that has nothing to do with how much work you actually delivered.
Client recharges mixed in with fee income
Travel, software, stock photography, third-party subcontractors: when you recharge these to a client, the recharge still counts as turnover and usually carries VAT, unless it is a true disbursement paid on the client’s behalf. Mix them in with fees and your margin looks better than it is, which makes it much harder to price the next project correctly.
Contractor payments without an IR35 check
Agencies lean on a flexible bench of freelancers and associates. If your agency is small, the off-payroll rules leave the IR35 decision to each contractor’s own company, but you still need to be sure a sole trader freelancer is genuinely self-employed. Get that status wrong and HMRC can reclassify the relationship, leaving you liable for tax and NIC that should have been deducted at source. Once your agency passes the medium-sized thresholds, you must issue status determinations yourself.
No real picture of utilisation or margin
Turnover tells you almost nothing about whether a project made money. You need chargeable hours, project-level margin and a clear read on which clients and which types of work are actually profitable: numbers a year-end set of accounts never shows.
What can an agency or consultancy claim as an allowable expense?
Allowable expenses for an agency or consultancy cover most operating costs, provided they are wholly and exclusively for the trade. Common claims include:
Tools, software and subscriptions
- Project management and time-tracking tools (Asana, Monday, Harvest, Float)
- Design and creative software (Adobe Creative Cloud, Figma, Canva Pro)
- Invoicing, proposal and client-management software
- Domain names, hosting and licences for client or company websites
Team and contractor costs
- Salaries, employer NIC and pension contributions for employees
- Payments to freelance contractors and associates (subject to IR35 checks for off-payroll workers)
- Remote-working equipment provided to staff (laptops, monitors, home office kit)
- Recruitment fees for hiring staff and associates
Office, travel and client costs
- Office or studio rent, utilities and business rates
- Travel to client sites, pitches and industry events
- Professional fees: accountancy, legal, company secretarial
- Business insurance, including professional indemnity cover
Who we work with
NDCA agency and consultancy clients fall into a few groups:
- Marketing, creative and digital agencies
- Management and strategy consultancies
- Professional services firms and boutique advisory practices
- PR and communications agencies
- Recruitment and HR consultancies
- Architecture and built-environment consultancies
- Multi-partner consulting practices
- Founder-led consultancies growing into a team
Not on the list? Send us a message and we will tell you honestly whether we are a good fit.
How NDCA works
What you can expect:
Fixed monthly fee
You pay one price every month for everything we agreed at the start: bookkeeping, retainer and project income tracking, VAT, payroll, year-end. No clock-watching, no per-question charges.
Direct answers from your accountant
You get a named accountant who understands retainer billing and project margins. You normally get a reply the same day, which matters when a client query lands the same week as a VAT deadline.
Built around how client work actually moves
Agency income does not arrive in steady amounts. Income lands in uneven amounts, and one month rarely looks like the last. We build the workflow to handle that rhythm, not to be surprised by it.
Cloud accounting that keeps your numbers current
We run your bookkeeping in Xero. For agencies and consultancies, that matters.
Time-tracking and invoicing tools such as Harvest or Float feed into Xero through structured monthly journals: retainer income, disbursements and client recharges all coded correctly. Multi-currency invoicing for international clients is handled automatically. VAT is calculated and submitted directly to HMRC under MTD, including the correct place-of-supply and reverse-charge treatment for clients based outside the UK. Bank feeds reconcile against actual deposits. You see the same numbers every month, not whatever your project tracker happens to show on the day. If you are not yet on Xero, we migrate you across as part of onboarding. If you are already there, we plug straight in.
Apron for invoice capture
Agencies and consultancies still generate paperwork: software subscriptions, freelancer and contractor invoices, co-working memberships, travel costs and client-event spend, most of it scattered across a handful of different cards.
We use Apron to capture all of it. Forward an invoice from a software supplier, a freelance contractor or your landlord to your dedicated Apron email address or snap a photo and the supplier, date, amount, VAT and line items are pulled out automatically and pushed into Xero, coded to the right cost line and matched to the bank transaction. By the time year-end arrives, every cost is documented and ready to claim.
Retainer income and contractor payments keeping you up at night?
Agency accounting has its own traps: retainer income that does not match invoices, contractor payments that blur the IR35 line, client recharges missed at year-end. Send us your situation and we will give you a fixed monthly quote at the end of your free consultation call.
Reviews
Discover why businesses trust us for dependable accounting services and practical financial advice.
What NDCA clients say
We work with businesses across the UK and beyond, delivering results that speak for themselves. Browse our reviews to see the impact we have made, and if you have worked with us, we would love for you to leave a review on Google
Switching from another accountant
If you already have an accountant and the reporting cannot keep up with your retainers and contractor payments, switching is simpler than people think. We send your current accountant a professional clearance letter, collect your records and pick up where they left off. How long it takes depends mainly on how quickly your previous accountant sends the records across, and we keep you updated throughout.
You do not need to wait for year-end. You do not need an awkward call with your old accountant. We handle the switch, including the handover paperwork, so your invoicing and client work carry on without a gap.
Agency and consultancy accounting FAQs
From 6 April 2026, the basic and higher rates of dividend tax rose by two points: 10.75% at basic rate and 35.75% at higher rate. The additional rate stayed at 39.35%, and the £500 dividend allowance is unchanged. The personal allowance also stays frozen at £12,570 until 2031. In practice, that is an extra £20 to £30 of tax for every £1,000 of dividends drawn at the basic or higher rate, worth factoring into your salary/dividend split for the year ahead.
IR35 (the off-payroll working rules) decides whether someone working through their own limited company (a personal service company, or PSC) should be taxed as an employee for that engagement. Who makes the call depends on the size of your client: medium and large clients (turnover above £10.2m, balance sheet above £5.1m or 50+ employees) determine your status themselves. Small clients leave the determination to you. These are the thresholds in force for now. New, higher thresholds are being phased in from the 2027/28 tax year.
There is no single income level at which incorporation automatically becomes more tax efficient. The right structure depends on your profits, personal income requirements, other income, how much you plan to retain, pension contributions, extraction strategy and the additional costs and responsibilities of running a company. For agencies and consultancies, IR35 exposure and growth plans matter too. Corporation tax sits at 19% to 25%, and with a sensible salary/dividend split that typically beats paying income tax at up to 45% as a sole trader. The April 2026 dividend tax rise narrows that gap slightly, but for most consultants past that profit threshold, incorporating still wins on the numbers.
It depends on your situation, but the common benchmarks are £12,570 (the full personal allowance) or £5,000 (the secondary NI threshold, and sole-director companies with no other employees can pay up to this without triggering employer NI or needing to register as an employer for PAYE). We run the numbers each year against current thresholds before recommending a figure.
Yes. Employer pension contributions are normally a deductible business expense and do not create an income tax or NI charge for you personally. As dividend tax rates climb, this is one of the more efficient ways to take money out of the company, particularly once you are near the higher-rate threshold.
The usual list: laptops and equipment, software subscriptions, the business share of your phone bill, home office costs, travel and mileage, accommodation when working away, professional membership fees, indemnity insurance, training and CPD, marketing and networking costs, accountancy fees and any staff you employ. Client entertaining and everyday clothing do not qualify, even if work-related.
Only if you trade as a sole trader. The threshold for gross self-employment income started at £50,000 from April 2026, drops to £30,000 from April 2027 and falls again to £20,000 from April 2028. If you operate through a limited company, MTD for Income Tax does not apply to you: it is an individual taxpayer rule, not a business one.
Yes. NDCA is regulated by the ACCA, the Association of Chartered Certified Accountants.
We work remote-first. Our consultant, agency and freelancer clients are spread across the UK, and since everything runs through Xero, location does not really factor into how we work together.
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Ready to hand over the spreadsheets?
Most agency and consultancy clients send us their invoices and contractor payments once a month, and we take care of retainer reconciliation and year-end from there. Send us a few details and we will take it from there.
