How profit is taxed, the allowable expenses for a freelance company secretary, NIC, VAT and Making Tax Digital explained for UK self-employed governance professionals.
A self-employed company secretary sells governance, not goods. You keep statutory registers, file confirmation statements and changes at Companies House, draft board and shareholder resolutions, take minutes, manage filing deadlines and keep a portfolio of client companies the right side of the Companies Act. Whether you trade as an independent practitioner, an outsourced company-secretarial provider or a portfolio governance consultant, HMRC treats the fees you earn as self-employment income and taxes you on the profit.
That distinction matters from the first day. A named statutory secretary on one company's payroll is an employee taxed through PAYE. A practitioner billing several client companies under retainer or per assignment is self-employed and files a Self Assessment return. This guide is built around the second case: how the profit is taxed, the specific professional costs you can deduct, National Insurance, VAT and the Making Tax Digital timetable that is about to change how you keep your records.
As a sole trader you pay Income Tax on profit, which is your total secretarial fees minus allowable expenses. For 2025/26 the personal allowance covers the first GBP 12,570, then you pay 20% to GBP 50,270, 40% to GBP 125,140 and 45% above. The personal allowance tapers away between GBP 100,000 and GBP 125,140, creating an effective 60% band that catches well-established practitioners with large client portfolios. Class 4 National Insurance is 6% on profit between GBP 12,570 and GBP 50,270 and 2% above, with Class 2 NIC settled through Self Assessment.
Scottish practitioners pay Scottish Income Tax on their profit through six bands (19%, 20%, 21%, 42%, 45% and a 48% top rate) and carry an S-prefixed tax code, while National Insurance stays UK-wide. Welsh practitioners have a C-coded tax code at rates currently matching the rest of the UK. If you also hold a PAYE role, perhaps an in-house secretary post alongside your freelance clients, that job may already be using your personal allowance and distorting your code. Run it through the tax code checker before you assume the first GBP 12,570 of fees is tax-free.
Many secretaries start by taking on one or two companies alongside other work. The GBP 1,000 trading allowance is built for this. If your gross self-employed fees across all clients are GBP 1,000 or less in a tax year, the income is tax-free and you need not register for Self Assessment for it. Cross GBP 1,000 and you must register and report the full amount.
Above the threshold you have a choice each year. You can deduct the flat GBP 1,000 trading allowance instead of working out actual expenses, or you can deduct your real allowable costs if they exceed GBP 1,000. You cannot do both. For most working secretaries the professional subscriptions, insurance and software bill comfortably exceeds GBP 1,000, so claiming actual expenses wins. The flat allowance only helps a brand-new practitioner with one small client and almost no outlay.
An expense is allowable when it is incurred wholly and exclusively for the business. For this trade the list is dominated by professional and compliance costs rather than tools or vehicles, but the ones below are all specific to how a company secretary works.
| Expense | What qualifies | Notes |
|---|---|---|
| Practising body fees | CGI (Chartered Governance Institute), ICSA, ACCA or similar membership and practising certificate | Fully allowable where relevant to the trade |
| Professional indemnity insurance | Cover for errors in filings, registers and advice | A core, fully deductible cost for this trade |
| Companies House charges | Filing fees, confirmation statement fees and document fees you pay on your own account | Deductible when borne by you, not recharged to the client |
| Governance software | Board-portal, entity-management, e-signature and Companies House filing software | Subscriptions are fully deductible |
| Reference and updates | Company-law subscriptions, governance handbooks, statutory deadline trackers | Must relate to your practice |
| Home-office costs | HMRC flat-rate working-from-home allowance, or a fair proportion of heat, light, broadband, rent or mortgage interest | Choose the larger fair deduction |
| Equipment | Laptop, monitor, secure document storage, shredder, scanner | Usually claimed in full via the Annual Investment Allowance |
| Travel | Mileage or rail and accommodation to board meetings, AGMs and client offices | Ordinary commuting to a single regular site is not allowable |
| CPD and training | Courses that maintain or update your existing governance skills | Training into a brand-new trade is not allowable |
| Accountancy and bank fees | Bookkeeping, Self Assessment and business banking | Fully deductible |
Most independent secretaries work from a home office, so this is often the largest single deduction. You can use HMRC's simplified flat rate based on the hours you work at home each month, which needs no receipts, or claim an actual proportion of household running costs based on the rooms used and time spent. A full-time home-based practitioner usually gets a larger deduction from the actual-cost method, so it is worth doing the sum both ways once and using the winner.
Equipment for this trade is modest: a reliable laptop, a second monitor, a scanner and crucially secure storage for confidential statutory records, all generally claimed in full through the Annual Investment Allowance. There is no PPE or specialist vehicle to deduct. Travel is the one variable cost. Mileage to board meetings, AGMs and client premises is allowable, but be careful with a client you attend so regularly it looks like an ordinary commute to a fixed workplace, as that can be challenged.
The private share of dual-use broadband, phone and devices must be excluded. Everyday business clothing is never allowable, even a smart suit for a board meeting. Fines and penalties, including a late Companies House or HMRC filing penalty, are not deductible. And entertaining clients over lunch is specifically disallowed.
A company secretary's tax position is rarely just one trade. Many practitioners also hold a part-time in-house role, sit on a board, or run their own limited company and pay themselves a salary plus dividends. These are taxed differently and must be kept apart. Use the multiple-income tax calculator to see how the streams stack.
| Income type | How it is usually taxed | Watch out for |
|---|---|---|
| Freelance secretarial fees | Self-employment trading income | Record the gross fee, including any recharged disbursements |
| Retainers across client companies | Trading income, often monthly | Easy to forget the invoice raised in March that pays in April |
| In-house or NED salary | Employment income, taxed at source | Your tax code may already use your personal allowance |
| Dividends from your own company | Dividend income, GBP 500 allowance | Taxed at 8.75%, 33.75% or 39.35% on top of other income |
| One-off project and AGM-season work | Trading income | Seasonal spikes can push profit into the higher band |
If you draw dividends from your own company, they sit on top of your other income and use only the GBP 500 dividend allowance before being taxed at the dividend rates. Our dividend income guide explains how that stacks against your secretarial profit, which matters for any practitioner who incorporated their own practice.
Take an outsourced company secretary with a portfolio of retained clients and some AGM-season project work, billing GBP 46,000 of fees for the year.
Income: GBP 46,000 (retainers GBP 34,000, project work GBP 9,000, recharged Companies House fees GBP 3,000)
Allowable expenses:
Taxable profit: GBP 46,000 minus GBP 9,600 = GBP 36,400
Income Tax: GBP 36,400 minus GBP 12,570 = GBP 23,830 at 20% = GBP 4,766
Class 4 NIC: GBP 23,830 at 6% = GBP 1,430
Total tax and NIC: GBP 6,196 for the year. Notice the GBP 3,000 of recharged Companies House fees increased turnover but the matching GBP 3,000 expense cancels it out, so it added nothing to the tax bill. Drop the loose item and you would overpay on profit you never really earned. Run your own figures through the sole trader tax calculator to sanity-check the bands.
For a company secretary the danger is not a missing receipt, it is a recharged filing fee booked as income with no matching cost. Net the disbursements off and your profit reflects what you actually earned.
You spend your professional life keeping other people's records straight, so apply the same discipline to your own. Keep every fee note, retainer invoice and disbursement recharge, and store the matching Companies House and supplier receipts against them so the net effect is clear at year end. Track each client separately, because a practitioner juggling a dozen companies who lumps everything into one figure cannot prove a deduction if HMRC asks. Records must be kept for at least five years after the 31 January filing deadline, and under MTD they will need to be digital.
National Insurance for a self-employed secretary is Class 4 at 6% on profit between GBP 12,570 and GBP 50,270 and 2% above, both collected through Self Assessment alongside your Income Tax. Class 2 NIC is also dealt with through the return and protects your state pension and benefit entitlement, so check it is included even in a low-profit year.
VAT becomes compulsory once taxable turnover exceeds GBP 90,000 in any rolling 12-month period. A busy practitioner with several retained clients can cross this faster than expected, so watch the rolling total each month, not just at the tax-year end. Because your clients are almost always VAT-registered companies that reclaim the VAT you charge, registration is relatively painless and lets you reclaim VAT on software, insurance and equipment. That makes voluntary registration worth considering even before you hit the threshold.
Making Tax Digital for Income Tax Self Assessment replaces the once-a-year return with quarterly digital submissions and a year-end finalisation. The thresholds are based on gross income, not profit:
For a company secretary this is a change of habit more than a change of substance. You already work to deadlines and keep meticulous records, so recording each fee and disbursement digitally as it lands and sending HMRC a quarterly summary should feel natural. The benefit is that a portfolio of clients with monthly retainers and seasonal AGM spikes becomes far easier to reconcile when captured continuously rather than rebuilt every January. Our guide to MTD for sole traders walks through the quarterly rhythm in practice.
Recording recharged fees as pure income. A Companies House fee billed back to a client is turnover, but the original payment is a matching expense. Book one without the other and you inflate your profit.
Assuming the in-house PAYE allowance covers freelance fees too. If a part-time role already uses your personal allowance, every pound of secretarial profit is taxed from the basic rate up.
Mixing dividends with trading profit. If you incorporated your own practice, dividends use a separate GBP 500 allowance and their own rates and must not be lumped in with sole-trader fees.
Missing the rolling VAT test. Several retained clients can push you past GBP 90,000 mid-year, so monitor the rolling 12-month figure, not the tax year.
Treating a regular client visit as deductible travel. Attend one client so routinely it resembles an ordinary commute and the mileage claim can be challenged.
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