Sole trader practice (most therapists)
For UK therapists in solo practice with under £50-60K profit, sole trader is usually the right structure:
- Simple registration with HMRC for Self Assessment
- Annual return covering 6 April to 5 April
- 20% Income Tax (basic rate) on profits above £12,570 personal allowance
- 6% Class 4 NIC on profits between £12,570 and £50,270
- Class 2 NIC was abolished for most from April 2024
- Personal liability for any practice issues (mitigated by professional indemnity insurance)
Specialist accountants for sole trader therapists typically charge £40-£80/month for SA filing plus ongoing bookkeeping support and expenses review.
Limited company practice
Above £50-60K profit, incorporating often makes sense:
- Corporation Tax 19-25% on company profits
- Take small salary (typically £12,570 personal allowance) plus dividends
- Limited liability protection (especially relevant for practitioners in higher-risk specialties)
- Pension contributions via the company are highly tax-efficient
- More complex admin: annual statutory accounts, CT600, Confirmation Statement, payroll
Limited company accounting for therapy practices typically costs £100-£180/month for single-director setups.
What allowable expenses look like for therapists
- Professional body fees - BACP, UKCP, BPS, BABCP, NCS, etc.
- Professional indemnity and public liability insurance
- Clinical supervision - typically £40-100/session
- CPD courses - workshops, conferences, certifications maintaining your existing accreditation
- Room hire - therapy rooms by the hour or day
- Home office - flat-rate £26/month or apportioned actual costs for online sessions
- Practice management software - WriteUpp, Cliniko, etc.
- Booking and payment tools - Calendly, Stripe, GoCardless
- Books and journals for practice areas (not general reading)
- Travel to clients (not commute to a regular workplace)
- Phone and internet - business proportion or dedicated line
- Marketing - website, paid ads, professional listings
- Accountant fees
Frequently asked questions
Can I claim my therapy room at home?+
Yes - either at the £26/month flat rate (101+ hours/month from home) or apportioned actual costs (mortgage interest, council tax, utilities) by rooms used and time used. Be careful: a room used exclusively for business may have CGT implications when you sell. Discuss with your accountant.
What if I work for an online platform like BetterHelp or Spill?+
Income from online platforms is typically self-employment income (not employment), so it goes on your Self Assessment alongside your private practice income. Some platforms operate differently - your contract should specify. Worth confirming with a specialist accountant.
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