Software Development Agency Accountant UK
Accounting for software agencies that bill by project, day rate and retainer. NDCA keeps contractor payments, project billing, VAT and tax under control on a fixed monthly fee.
As an accountant for software development agencies UK, NDCA is an ACCA-regulated accountancy practice working with UK software development agencies, run on Xero. We charge a fixed monthly fee, so your bookkeeping, VAT and year-end are managed every month.
As your accountant for software development agencies UK, NDCA is a UK ACCA-regulated accountancy practice providing accounting, tax and bookkeeping support to software development agencies across the UK.
What we handle for software development agencies
Software development agencies need specialist accounting because they combine project-based billing with employees, contractors, freelancers and often international clients, where revenue on the invoice is not the same as a project’s economic performance.
Know which projects actually make money
A project can look profitable on the invoice while contractor costs or extra development time quietly erode the margin. Good accounting shows what has been billed, delivered and spent on contractors, and what each project is actually contributing.
Contractors, freelancers and IR35
Most agencies work with a mix of permanent developers, freelancers and specialist contractors. Where the off-payroll working rules apply, we help you understand the accounting and payroll implications and keep the records in order, though we do not provide legal employment-status opinions.
Fixed-price, day-rate and retainer billing
Fixed-price projects need revenue, costs and progress monitored carefully. Day-rate work is billed against days delivered, with contractor costs directly affecting margin. Retainers need recurring invoices tracked against the agreed service period.
R&D tax relief
Some software development projects may qualify for R&D tax relief under the merged RDEC regime, where the relevant HMRC conditions are met. Routine development, or work done for a client rather than the agency itself, will not automatically qualify. We help identify potentially qualifying work and organise the supporting information.
See our full accountant for UK tech, SaaS and AI businesses page for how we work with the wider tech sector.
VAT, international clients and expenses
UK VAT registration is generally required once your taxable turnover exceeds £90,000. Voluntary registration can sometimes make sense depending on your customers and costs, though it is not automatic just because a client is VAT registered. See our VAT returns page for more detail.
Many UK software agencies invoice US, European and other international clients. We handle foreign-currency invoices, GBP reporting and exchange differences as part of the monthly close. VAT treatment of development services supplied overseas depends on the nature of the service, the customer and the applicable place-of-supply rules, so we look at your actual client base rather than a blanket rule.
Business costs may be allowable where they meet the relevant tax rules and are incurred for the purposes of the trade, such as developer software, cloud services, contractor costs, recruitment, professional fees and office costs. Where an item is used for both business and personal purposes, only the business element may be allowable.
As your accountant for software development agencies UK, we keep VAT correct across every market you invoice.
Know your numbers before year-end
You should not have to wait for annual accounts to understand how the agency is performing.
Depending on your agency, useful monthly management accounts reporting can include revenue, gross margin, contractor costs, project profitability, and your Corporation Tax and VAT liabilities. We structure your reporting around what actually helps you run the business.
Get in touch with an accountant for software development agencies UK who already understands IR35 and project billing.
How Your Accountant for Software Development Agencies UK Works
Three things make our service different for software development agencies specifically.
You get a named accountant who understands agency margins, not just someone who files your year-end accounts. We work on a fixed monthly fee agreed up front, with a direct point of contact who replies within one working day.
NDCA is an ACCA-regulated practice on Xero, working remotely with software development agencies across the UK, wherever your business is based, on bookkeeping, Corporation Tax and payroll.
The software we use: Xero and Apron
Xero is the accounting platform everything runs through: project and client billing, contractor invoices, multi-currency, and VAT under Making Tax Digital.
Running on Xero gives cleaner bookkeeping, better visibility over project margins, and easier reconciliation. Contractor and freelancer invoices are captured through Apron, coded to the right project, with less manual admin as the team grows.
IR35 checks and project billing keeping you up at night?
Contractor payments to track, project invoices on different billing cycles, VAT on international clients. We handle it, on one fixed monthly fee.
Reviews
Discover why businesses trust us for dependable accounting services and practical financial advice.
Switching from another accountant
Switching is simpler than most agency owners expect, and you do not need to wait for year-end.
1. You sign the proposal.
2. NDCA requests professional clearance from your existing accountant.
3. Your existing accountant provides the relevant records.
4. We review the information.
5. We take over the accounting.
6. Your business moves onto the agreed monthly workflow.
Most switches are completed within around 2-3 weeks, depending on your previous accountant and the records available.
Accountant for software development agencies UK: FAQs
Yes. We work with fixed-price projects, day-rate contracts and monthly retainers, and can structure your reporting to show project profitability rather than just what has been invoiced.
Some projects may qualify where the relevant HMRC conditions are met, including genuine technological uncertainty. Routine development does not automatically qualify, and eligibility depends on the actual project.
The VAT treatment depends on the nature of the service, the customer and the applicable place-of-supply rules, not a blanket rule.
Costs such as developer software, cloud services, contractor payments, recruitment and professional fees may be allowable where they meet the relevant tax rules and are incurred for the purposes of the trade.
There is no universal answer. The right structure depends on your profits, the owners, liability, funding plans and how profits are extracted.
Yes. We request professional clearance from your current accountant, collect your records and move you onto the agreed monthly workflow, usually within around 2-3 weeks.
Ready to get your accounts under control?
