A therapy practice usually has its own mix of income and outgoings that a general accountant will not automatically know how to handle.

• Professional indemnity insurance, membership fees for BACP and other professional bodies, and clinical supervision costs
• Therapy room hire, home office costs, and equipment such as furniture or recording software for online sessions
• Income from private clients alongside organisational or NHS-linked work

Over 75,000 people belong to the BACP alone, which gives you an idea of how many mental health professionals are dealing with these same costs and the same rules around allowable expenses. We built our accounting and tax needs offering around that reality, with specialist accounting support rather than a generic small business template.

One of the first big decisions for any self-employed therapist is business structure. Do you stay a sole trader, or move to a limited company?

Sole trader versus limited company for therapists

As a sole trader, you and your practice are the same legal entity. Sole traders are responsible for their own tax, keep things simple to set up, and suit many self-employed therapists in the early years of private practice. There are millions of sole traders across the UK, and therapy is one of the professions where this company structure works well for a long time.

A limited company is a separate legal entity from you personally. It can bring a tax-efficient way to draw income once your taxable profit reaches a certain level, but it also brings corporation tax, annual accounts, and more reporting than a sole trader has to deal with.

Incorporation is not automatically the better option. It depends on your profit level, how much you want to draw out as salary versus dividends, and how much extra compliance you are willing to take on.

When should a therapist think about incorporating

We usually start this conversation once a practice is consistently profitable and future growth looks likely. We will walk you through the real numbers for your practice rather than a generic rule of thumb, and explain the tax implications and tax efficiency of each option in plain terms before you decide.

We help you claim your allowable business expenses correctly, from clinical room hire to CPD, so nothing gets missed. Maximising your allowable expenses is one of the simplest ways to bring down your overall tax bill without doing anything risky, and we review allowable expenses at least once mid-year, not just at deadline time.

Many therapists miss tax deductions simply because they did not realise a cost qualified, and claiming the wrong tax deductions or missing them altogether is one of the most common mistakes we see. Reviewing allowable expenses properly, rather than guessing, is often the single biggest difference we make to a therapist's tax bill.

Expenses we regularly review for therapy clients include:

• Home office expenses, including a fair portion of your home working costs if you see clients or do admin from home
• Therapy room hire, professional membership fees for BACP and similar professional bodies, and professional indemnity insurance premiums
• Clinical supervision costs, ongoing professional development, CPD and other professional development costs, books and training events
• Mileage and travel between client locations, plus phone costs for calls and online booking

We can also look at mortgage interest apportionment for home workers where it applies, and general marketing costs for building your caseload. Getting these deductible expenses right, and keeping the paperwork to back them up, is often what separates a therapist who overpays tax from one who does not. Every allowable business expense you claim correctly is money that stays in your practice rather than going to HMRC unnecessarily.

Based on our own projects, a standalone self assessment tax return for a self-employed therapist typically costs somewhere between £180 and £350. A fuller ongoing package, covering bookkeeping, tax planning and your self assessment together, tends to sit closer to £30 to £55 a month for a sole trader.

For therapists running a limited company, annual accounts and your corporation tax return usually add up to somewhere between £750 and £1,500 a year, or roughly £90 to £200 a month if you prefer a fixed monthly package that also covers payroll and other ongoing compliance.

This is a rough guide, and the actual cost varies depending on your income, how many income sources you have, and how much professional advice and support you want throughout the year rather than just at filing time. We will always give you a proper quote, covering your tax returns and any other accountancy services you need, based on your own practice before any work begins.

We offer fixed fee accounting packages so you always know what you are paying and what is included, with no surprise bills at year-end. Every package covers your self assessment or annual accounts, ongoing support by phone or email, and a named accountant who understands private practice therapists rather than a rotating call centre. Whether it is your first set of tax returns or your tenth, we file them accurately and on time, every year.

Because we specialise in accountancy services for therapists, mental health professionals and other health professionals, we already know the questions to ask about your practice. As specialist accountants, we bring specialized knowledge of the sector, which means less back and forth explaining the basics, and more professional support spent on the advice that actually changes your tax position. Our accounting services are built around real therapy practices, not adapted from a template meant for shops or tradespeople.

We take confidentiality as seriously as you do. Around 91% of people who have had therapy say confidentiality matters to them, and the same principle applies to how we handle your financial records and client-related business data. As an accountancy firm working with healthcare professionals, we understand the importance of treating sensitive financial and business information with discretion.