Agencies Accounting & Tax Services in the UK

Our UK agency accounting services are specifically tailored for the needs of various service-based firms:

• Digital Marketing Agencies: SEO, PPC, and social media firms managing client ad spend and needing to track campaign ROI and retainer profitability.
• Creative & Design Agencies: Branding, web development, and video production houses that need to track project costs, including software subscriptions and freelance talent.
• Public Relations (PR) Agencies: Firms managing monthly retainers, event budgets, and pass-through expenses for media distribution.
• Management & IT Consultancies: Professional service firms that need to track billable hours against project budgets and manage multi-currency billing for international clients.

While professional financial oversight is always beneficial, specialized agency accounting becomes mission-critical at key growth stages:

• When You Hire Your First Employee or Contractor: This triggers PAYE (Pay As You Earn) payroll obligations and the need to assess contractor status under IR35 rules to avoid significant tax liabilities.
• When You Cross the VAT Threshold: Once your taxable turnover exceeds £90,000 in a rolling 12-month period, you must register for VAT and begin submitting MTD (Making Tax Digital) compliant returns.
• When Managing Multiple Projects: As soon as you are juggling more than a couple of clients, it becomes impossible to accurately gauge the profitability of each project without a dedicated project accounting system.
• When Cash Flow Becomes a Concern: If you're struggling to bridge the gap between paying staff and receiving client payments, you need professional cash flow forecasting and management.
• When You Want to Scale or Sell: To grow your agency sustainably or prepare for an eventual sale, you need robust, data-driven financial reports that demonstrate profitability and operational efficiency.

Outsourcing your agency's accounting provides access to a specialized skillset that delivers a strong ROI through improved efficiency and tax optimization.

• Small Agency / Boutique Firm (1-5 people): £500 - £1,500 per month. This typically includes MTD-compliant bookkeeping, payroll, VAT returns, and basic project profitability reporting.
• Growing Agency (5-20 people): £1,500 - £3,500 per month. This service level often includes more detailed KPI analysis (e.g., team utilization, client margin analysis) and cash flow forecasting.
• Established Agency (20+ people): Custom pricing starting at £3,500+, often including fractional CFO services for strategic planning and financial leadership.

UK agencies face significant compliance risks that can result in heavy penalties if not managed correctly:

• IR35 Non-Compliance: Incorrectly classifying an employee as a contractor can lead to significant liabilities for unpaid PAYE tax and National Insurance contributions.
• VAT Errors: Incorrectly charging, reclaiming, or reporting VAT is a common issue that leads to penalties from HMRC. This is especially complex for agencies with international clients.
• Project Unprofitability: Without accurate cost tracking, agencies can unknowingly run unprofitable projects, which erodes overall business health and can lead to failure.
• Improper Revenue Recognition: Recognizing revenue from large upfront payments before work is delivered can distort financial performance and lead to cash flow issues.
• Late Filings: Missing deadlines for filing annual accounts with Companies House or Corporation Tax returns with HMRC results in automatic, escalating penalties.

Agency leaders are experts in creativity, strategy, and client relationships—not UK tax law or management accounting. Outsourcing the finance function to YourLegal allows you to focus on your core strengths while we provide the financial engine for your growth.

We implement cloud-based accounting systems that integrate with your project management tools (like Asana or Trello) to provide real-time profitability insights. Our team manages your VAT compliance, navigates the complexities of IR35, and ensures all your Companies House and HMRC filings are handled correctly and on time. By transforming your financial data into clear, actionable reports, we empower you to make smarter decisions on pricing, staffing, and business development, building a more profitable and resilient agency. This service works in tandem with our core UK tax compliance and company formation solutions.