Tax and self-assessment for counsellors: the basics

Tax feels intimidating until you see the shape of it, at which point it becomes a handful of dates and habits. As a self-employed counsellor you’re responsible for declaring your own income and paying what’s due, and if you set up a couple of simple routines early, it never becomes a crisis. Here are the basics.

Register when you cross the line

If your trading income is more than £1,000 in a tax year, you need to register for self-assessment with HMRC as a sole trader. Below that, a small trading allowance means you generally don’t have to declare it, but most people building a practice pass £1,000 quickly.

There’s a window for registering, so don’t sit on it. As a rule you should register by 5 October following the end of the tax year in which you started, and the tax year runs 6 April to 5 April. Register late and you can face penalties, so do it as soon as you know you’re trading properly.

The date that matters

For most self-employed people the key deadline is 31 January. That’s when your online self-assessment return for the previous tax year is due, and when the tax you owe has to be paid. Miss it and penalties and interest start to build. Put it in your calendar the moment you register, and don’t leave the return to the last week of January with everyone else.

The reporting routine itself is changing. Making Tax Digital changes how you report from April 2026: if your gross income is over £50,000 the single annual return gives way to quarterly digital updates, with lower thresholds following in 2027 and 2028.

National Insurance and VAT

Alongside income tax, you may pay National Insurance on your profits, worked out through the same self-assessment system. The rules and rates change from year to year, so check the current position on gov.uk rather than relying on an old figure.

VAT only becomes your concern at a much higher level. You must register for VAT once your taxable turnover goes over £90,000 in a rolling twelve months, and register within 30 days of crossing it. Most single-handed counselling practices never approach this, so for most readers it’s simply good to know it exists.

Set money aside as you go

The habit that saves people is simple: every time you’re paid, move a portion into a separate pot for tax, and don’t touch it. Keeping something back through the year means the January bill is money you already have, not a shock you have to scramble for. How much depends on your income and circumstances, so a quick word with an accountant, or HMRC’s own tools, will tell you a sensible proportion for you.

Keep the records

You’re required to keep records of your income and expenses to work out what you owe, and good records also mean you claim everything you’re entitled to. That’s the job of a simple bookkeeping routine, covered separately in this stage.

This is general guidance to help you get oriented, not tax advice. Rules and figures change, so check gov.uk for the current position, and consider an accountant if your situation is anything other than straightforward.