Accountants for Marketing Agencies

Where the agency buys advertising in its own name and bills the client, the cost is usually a recharge: it forms part of the agency's taxable supply and VAT is charged on the full amount. A disbursement, outside the agency's own supply, is narrower. HMRC's conditions include acting as the client's agent, the client receiving and being responsible for the supply, and the cost being passed on at exactly the amount paid and shown separately.

Most platform ad spend bought on the agency's own account does not meet the disbursement conditions. Getting this wrong understates VAT, and it can also push turnover over the registration threshold earlier than expected because recharged media counts towards taxable turnover.

Retainers billed in advance, multi-month projects and success fees all raise timing questions. Income should reflect work performed in the period rather than simply invoices raised. For accounting periods beginning on or after 1 January 2026, revised FRS 102 revenue requirements adopt a five-step model, which makes contract terms and performance obligations more important for agencies reporting under FRS 102.

Work in progress at the year end, unbilled time and prepaid retainers affect profit and therefore Corporation Tax. We agree a practical, consistent method with you rather than reconstructing timesheets at the year end.

Agencies often rely on designers, copywriters and developers who are not on payroll. Whether each one is genuinely self-employed depends on control, substitution and mutuality of obligation, not on the contract title. Where a worker supplies services through their own company and the agency is medium or large, the off-payroll working rules can make the agency responsible for the status decision.

For staff on payroll we run RTI submissions, auto-enrolment and benefits reporting, and we advise on how directors take a salary and dividends.

Services supplied to overseas business clients are usually outside the scope of UK VAT under the general business-to-business place-of-supply rule, though they must still be shown correctly on the VAT return. Software and advertising bought from overseas suppliers usually requires the reverse charge. Both are common sources of VAT return errors in agencies.

Beyond the statutory accounts, useful agency reporting shows revenue net of pass-through costs, gross margin by client, utilisation and debtor days. Bookkeeping categories set up correctly from the start make those figures available without a separate spreadsheet. Monthly management accounts and KPI reporting are a separately quoted service.

A marketing agency company files statutory accounts at Companies House, normally nine months after its accounting reference date, and a CT600 within 12 months of the end of its Corporation Tax accounting period. Most smaller companies pay Corporation Tax nine months and one day after the period ends; the main rate is 25%, with the 19% small profits rate up to £50,000 and marginal relief between £50,000 and £250,000.

VAT registration is required once taxable turnover passes £90,000 in a rolling 12 months, or is expected to within 30 days. Paying any salary, including to a director, brings PAYE and Real Time Information reporting, and employing eligible staff brings automatic-enrolment pension duties. The confirmation statement is a separate annual filing.

Thresholds, rates and deadlines reflect the 2026/27 UK position at the content update date. Check current GOV.UK guidance, or ask us, before relying on them for your own company.

We start with a free consultation to understand how you invoice, buy, pay people and get paid. You then receive a written scope and fee before chargeable work begins, covering bookkeeping, VAT, payroll, year-end accounts, CT600 and director Self Assessment as agreed.

Advisory work such as management accounts, cash-flow forecasting, pre-year-end planning or specialist reliefs is quoted separately rather than assumed to be included. Where a question needs specialist legal or tax advice outside our scope, we say so.