Who we work with

Accountants for consultants From solo advisory to growing practice.

Independent consulting is one of the cleaner small-business models tax-wise — high gross margins, low capital requirements, modest expense profiles — but it comes with its own questions. Should you be sole trader or limited? When do you need to register for VAT? How do you structure income to avoid the 60% effective marginal rate between £100k and £125k? What about retirement planning through the company? Fernside works with independent consultants across the spectrum, from solo advisory practices to growing consulting firms with 1-3 associates.

TL;DR — At a glance

We work with independent consultants across management, strategy, marketing, HR, technical and specialist domains
Pricing from £45/month (sole-trader consulting) to £350/month (established consulting limited company)
We handle the sole-trader-vs-limited decision honestly with worked examples at your actual profit level
Quarterly check-ins and proactive tax planning — not just annual filings
Free 20-min call to discuss your specific consulting practice

Who we work with as consultants

Our consulting clients span the recognised categories: management and strategy consultants (organisational design, transformation, M&A advisory); specialist functional consultants (HR, finance, marketing, sales, supply chain, procurement); technical consultants (engineering, data, security, architecture, regulatory); industry-vertical specialists (healthcare, pharma, fintech, professional services, government); and independent advisors and NEDs taking on portfolio of board and advisory roles. Income patterns are typically high day-rate work for fewer clients, often with retainer + project + advisory mix.

Sole trader vs limited company — the consultant version

Consultants face the same 2026/27 calculation as other sole traders but with some industry-specific factors. For tax savings alone, the gap narrowed substantially when dividend rates rose to 10.75% / 35.75% / 39.35%. Below £30k profit sole trader is cheaper; £30-60k is a wash; above £60k limited company saves modestly. But many consultants have non-tax reasons to incorporate: client procurement teams often require limited-company status for engagement contracts (especially with larger organisations and the public sector); credibility and perceived permanence; cleaner separation of liability if you provide advice that could be challenged; ability to bring in associates or co-founders later. Read our free guide.

The 60% effective rate trap (£100k–£125k)

If your consulting income is approaching £100,000 of personal income, you hit one of UK tax's most painful zones. The Personal Allowance (£12,570 tax-free) tapers away at £1 lost for every £2 of income above £100,000 — fully tapered by £125,140. The effective marginal rate in this band is roughly 60% (40% higher-rate Income Tax + 20% from the lost allowance + Class 4 NIC at 2%). Practical mitigations: pension contributions (reduce your 'adjusted net income' below £100k); Gift Aid charitable donations (same effect); retaining profits in the company rather than extracting them (defer to a lower-income year); splitting income with a spouse through proper limited-company structuring.

VAT for consultants

Most consultants cross the £90k VAT threshold through normal growth. Voluntary registration before threshold often makes sense for consultants whose clients are larger businesses (they reclaim the VAT, so charging it costs them nothing) and gives you cleaner B2B credibility. Voluntary registration is rarely worth it if your clients are individuals, small unincorporated businesses, or non-VAT-registered charities. The Flat Rate Scheme is mostly no longer worthwhile for consultants — under 2017 rules, most consultants are 'limited cost traders' paying 16.5% which exceeds Standard scheme cost. Run the actual numbers before joining the FRS.

Pension planning through your consulting company

Employer pension contributions are one of the most tax-efficient extraction routes for limited-company consultants. Fully Corporation Tax deductible (no CT on the contribution amount). No NIC on either side. Money grows tax-free in the pension until you draw it in retirement (then taxable as income, usually at a lower rate than your peak earning years). The annual allowance is £60,000 for most people, with tapering above £260,000 of adjusted income. For higher-rate consultants extracting surplus, employer pension contributions usually beat dividends or further salary on a tax-efficiency basis. We can model this annually as part of your year-end planning.

What we do for consulting clients

Starter (£45/month) covers sole-trader consultants under £50k of profit — Self Assessment, expense reviews, HMRC correspondence, year-round email support. Growth (£125/month) works for sole traders with more complex situations (multi-client, VAT-registered, growing) or for newly-incorporated consulting limited companies. Scale (£350/month) covers established consulting limited companies with payroll, dividends, monthly management accounts, cashflow planning and proactive tax-planning. All packages include the year-end planning we consider essential — most consultants get more value from the proactive planning than the compliance filings themselves.

Tools and systems we recommend for consultants

Accounting software: Xero is our default for consulting limited companies (clean multi-currency support if you have international clients); FreeAgent for sole-trader consultants (free if you bank with NatWest/RBS/Ulster Bank/Mettle). Time tracking: Harvest, Toggl or your accounting software's built-in tracker — important if you bill by time or want utilisation data. Banking: Starling or Tide for free business accounts; some consultants prefer traditional banks for cheque deposits or international transfers — your call. Pension: AJ Bell, Hargreaves Lansdown or PensionBee for employer pension contributions — we can recommend based on your situation.

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Book a free 20-minute call. No pressure, no obligation, just a clear conversation about whether we're the right fit for your situation.

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Frequently asked questions

From the questions we actually get asked by people in your situation

My consulting income is approaching £100k — what should I do?

The £100k-£125k band has an effective 60% marginal rate due to Personal Allowance tapering. Practical mitigations: pension contributions reduce 'adjusted net income', Gift Aid donations have the same effect, and limited company structuring lets you retain profits or split income with a spouse who has lower marginal rate. We'd run the specific numbers for your situation on a free call.

Should I register for VAT voluntarily?

Often yes if your clients are larger businesses (they reclaim it, costs them nothing) and you have meaningful input VAT (software, training, services). Rarely worth it if your clients are individuals or small non-VAT-registered businesses (you become 20% more expensive). Run the math on your specific client mix.

How do you handle international consulting clients?

Standard practice is to invoice in your client's currency (typically USD or EUR), convert to GBP at the date of receipt, and report gross income. Foreign currency receipts via banks like Wise or Starling avoid the worst FX spreads. For complex multi-jurisdiction consulting (working in the client's country, treaty issues, foreign tax credits), we may refer to The Tax Lead.

My consulting practice has 2-3 associates — can you handle that?

Yes — our Scale package covers consulting limited companies with payroll for associates (whether employees or sub-contractors). For partnership structures (LLP, GP, regular partnership) we'd need to discuss specifics on a call. Most growing consulting practices stay as limited companies with associates on PAYE or as paid sub-contractors.

Should I take a higher salary or higher dividends?

For 2026/27, most owner-managers take £12,570 salary (secondary NI threshold) plus dividends to fill the basic rate band (£50,270 total). Above that, employer pension contributions often beat further dividends on tax efficiency. The right mix depends on your annual profit, pension capacity and other income — we model this annually.

What about NED fees or advisory board roles?

If you serve on a board as a Non-Executive Director or paid advisor, that income is typically employment income taxed through PAYE by the appointing company, not consulting income. It doesn't flow through your consulting limited company. We handle the Self Assessment side and coordinate with the appointing company's payroll team where needed.