Accountants for Subscription Businesses

A £120 annual plan sold in January is earned at £10 a month. At the year end, the unexpired portion is deferred income on the balance sheet. Tracking it properly prevents profit and Corporation Tax being brought forward. FRS 102 reporters should review contract terms under the revised revenue requirements for periods beginning on or after 1 January 2026.

Digital services such as software access, streaming and downloadable content supplied to consumers are taxed where the consumer lives. A UK business selling digital services to EU consumers usually registers for the EU non-Union One Stop Shop or locally, with no EU-wide registration threshold for UK-established sellers. Business customers abroad are normally handled under the business-to-business rules.

A box can contain items with different VAT rates, such as zero-rated food, standard-rated cosmetics and books at zero rate. VAT should be apportioned on a fair basis, and postage included in the price usually follows the main supply. Stock held at the year end must be valued.

Processor payouts deduct fees, refunds, disputes and reserves. Recording gross sales and reconciling each payout keeps the accounts complete. Monthly recurring revenue, churn and customer lifetime value are management measures; they should reconcile to the accounts but are not the same as statutory revenue.

A subscription business 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.