Making Tax Digital for counsellors: practical checks for your records

In short: This page does not tell you whether Making Tax Digital for Income Tax applies to you, or when. Only GOV.UK, HMRC or your accountant can do that. Start with GOV.UK's official checker: find out if and when you need to use Making Tax Digital for Income Tax. What follows is practical, everyday advice on keeping a counselling practice's records tidy, whatever the answer turns out to be.

We do not summarise the rules here, because they are HMRC's to set and they can change. Instead:

1. Find your most recent Self Assessment tax return and have it to hand.
2. Run the GOV.UK checker and save or print what it tells you.
3. Keep any letter from HMRC about Making Tax Digital with your tax papers, and read it alongside GOV.UK's Use Making Tax Digital for Income Tax guide.
4. If you have an accountant, ask them what it means for you and who will do what.

If anything on GOV.UK is unclear, contact HMRC or speak to an accountant rather than relying on an article, including this one.

Counselling income can arrive in several ways: private clients paying per session or in blocks, Employee Assistance Programme (EAP) providers paying weeks after the session, and reduced-fee sessions for some clients. A few habits make that much easier to keep on top of:

• Give each kind of income its own line, such as private fees and EAP referral fees, so you can see at a glance what has been paid and what is still owed.
• Record each payment when it arrives, and link it to the client reference, session or invoice it relates to. Keep client details in your clinical notes, not your money records; a reference number is enough.
• Note the agreed rate for any concession or sliding-scale client, so the figures make sense later.
• Keep receipts as soon as you pay, for things like clinical supervision, room hire, CPD and training, professional memberships, insurance and directory listings.
• Use a short, stable list of categories so every week's entries look the same. Sorting receipts into categories is a way of staying organised, not a decision about what can be claimed. GOV.UK's guide to expenses if you're self-employed and your accountant can help with that.

Small, regular admin is easier than a once-a-year catch-up. A 15 to 30 minute slot each week works for most sole traders:

1. Add the week's income, matched to sessions or invoices, and chase any EAP invoices that are overdue.
2. Add the week's expenses and file the receipt or photo next to the entry.
3. Flag anything you are unsure about instead of guessing, and keep a list of questions for your accountant.
4. Glance at your bank statement to catch anything you missed.

A separate business bank account makes every step quicker, because business and personal spending stop sharing a statement. GOV.UK's page on keeping records if you're self-employed is a good place to check what to keep.

If GOV.UK or your accountant tells you that you need software, GOV.UK has a page to help you choose the right software. Prices and features change often, so compare current options and ask your accountant before you pay for anything. If you would rather hand the whole thing over, an accountant or bookkeeper can only work with the records you give them, so the weekly routine above still pays off.

1. Run the GOV.UK checker and keep a note of what it says.
2. Open a separate business bank account if you do not already have one.
3. Book a weekly admin slot in your diary and keep it.
4. Write down your questions and take them to an accountant or HMRC.

For more on running a counselling practice, visit our counsellor page, or read Essential business documents every UK counsellor should have ready.

If you want ready-made templates for invoices and everyday money records, LaunchKit's Counsellor Financial Forms Bundle gives you fillable PDF and editable Word record templates. It is not Making Tax Digital software: it does not send anything to HMRC and is not a substitute for any software GOV.UK describes.

This article is general information to help you keep your records organised. It is not tax, legal or financial advice and does not set out any rules. For your own position, check current GOV.UK guidance, contact HMRC or ask a qualified accountant.