What is different about tax for architects
Architects work in several different ways. You might be employed by a practice, run your own practice as a sole trader, trade through a limited company, or contract to other practices and public bodies through your own company. Each route is taxed differently, and a few issues belong to architecture in particular: annual ARB registration and RIBA fees, professional indemnity insurance with run-off cover, expensive software and hardware, fee income that arrives in project stages, and VAT that stays at 20% even when the building work itself is zero-rated.
This guide covers the 2026/27 tax year (6 April 2026 to 5 April 2027) for architects in England, Wales and Northern Ireland. Scotland sets its own Income Tax bands, so Scottish taxpayers will see different figures from the examples below.
Employed, sole practitioner, company or contractor
Employed architects
Your employer runs PAYE. If you pay your own ARB retention fee (£225 for 2026) or RIBA subscription, you can claim tax relief on it, because both bodies are on HMRC's approved list. The flat-rate working from home relief for employees has been withdrawn, so it cannot be claimed for 2026/27.
Sole practitioners
As a sole trader you pay Income Tax and Class 4 National Insurance (6% on profits between £12,570 and £50,270, 2% above) through Self Assessment. Cash basis is the default, so you are taxed on fees received less costs paid, unless you opt for traditional accounting. If your turnover on your 2024/25 return was over £50,000, Making Tax Digital for Income Tax has applied since 6 April 2026, with quarterly updates from compatible software. The threshold drops to £30,000 from April 2027, based on your 2025/26 return, and it is measured on turnover before expenses, not profit.
Limited company practices
A company pays Corporation Tax at 19% on profits up to £50,000 and 25% above £250,000, with marginal relief in between. A common approach is a modest director's salary with the rest paid as dividends, but dividends became more expensive from 6 April 2026: 10.75% in the basic rate band and 35.75% in the higher rate band, after a £500 dividend allowance. Profit left in the company to fund equipment, staff or quiet months is taxed only at Corporation Tax rates until you draw it.
Contracting and IR35
Architects who contract to other practices, developers or public bodies usually do so through a personal service company. The off-payroll working rules (IR35) apply contract by contract. If the client is a public authority, such as a local authority, school, university or NHS body, or a medium or large private business, the client decides your status and issues a status determination statement. If the contract is inside the rules, the deemed employer deducts Income Tax and National Insurance before paying your company. With a small private client, your own company makes the assessment. Our IR35 quick assessment is a useful first check.
Worked example: sole practitioner or company at £80,000 profit
An architect in England makes £80,000 profit before paying themselves in 2026/27 and has no other income. As a company, they are the only employee, take a £12,570 salary and draw everything left as dividends. The company has no associated companies, and because the director is its only employee it cannot claim the Employment Allowance.
| Sole practitioner | Amount |
|---|---|
| Income Tax: 20% on £37,700 | £7,540.00 |
| Income Tax: 40% on £29,730 (£80,000 minus £50,270) | £11,892.00 |
| Class 4 National Insurance: 6% on £37,700 | £2,262.00 |
| Class 4 National Insurance: 2% on £29,730 | £594.60 |
| Total tax | £22,288.60 |
| Kept | £57,711.40 |
| Limited company | Amount |
|---|---|
| Employer National Insurance: 15% on £7,570 (£12,570 salary minus £5,000) | £1,135.50 |
| Taxable company profit (£80,000 minus £12,570 minus £1,135.50) | £66,294.50 |
| Corporation Tax: 25% (£16,573.63) less marginal relief of 3/200 of £183,705.50 (£2,755.58) | £13,818.05 |
| Dividends paid (£66,294.50 minus £13,818.05) | £52,476.45 |
| Dividend tax: £500 allowance at 0%, £37,200 at 10.75% | £3,999.00 |
| Dividend tax: £14,776.45 at 35.75% | £5,282.58 |
| Total tax (£1,135.50 + £13,818.05 + £9,281.58) | £24,235.13 |
| Kept (£12,570 salary + £52,476.45 dividends minus £9,281.58) | £55,764.87 |
The salary uses the personal allowance and costs no employee National Insurance. At this profit, drawing everything out of a company leaves £1,946.53 less than sole practice, largely because of the higher 2026 dividend rates. A company can still make sense if you leave profit in the business, or for commercial reasons, so the decision should be modelled on your own figures. Our sole trader vs limited company calculator is a good starting point.
Allowable expenses for architects
Costs incurred wholly and exclusively for your work are deductible, whether you are a sole trader or a company.
| Expense | Allowable? | Notes |
|---|---|---|
| ARB annual retention fee | Yes | £225 for 2026; ARB removes architects who do not pay |
| RIBA and other professional subscriptions | Yes | RIBA, including RIBA Professional Services, is on HMRC's approved list |
| Professional indemnity insurance | Yes | ARB expects at least £250,000 cover on an each and every claim basis |
| CAD, BIM and rendering software subscriptions | Yes | Monthly or annual licences are a running cost |
| Computers, plotters, printers and survey equipment | Yes | Full relief in the year of purchase is usually available; the Annual Investment Allowance is £1 million and excludes cars |
| Site boots, hard hat and hi-vis | Yes | Protective clothing is allowable; everyday clothing is not |
| Travel to sites, clients and planning meetings | Yes | 55p a mile for the first 10,000 business miles in 2026/27 and 25p after. Travel between home and your usual workplace is not |
| Printing, models and presentation materials | Yes | Where produced for client work or competitions |
| CPD courses and conferences | Yes | Training for a new, unrelated line of business is not |
| Home office costs | Partly | The business proportion only |
If you trade through a company, the company can pay these costs directly and can reimburse you for business miles in your own car at up to 55p a mile for the first 10,000 miles tax free.
Professional indemnity insurance and run-off cover
The Architects Code expects adequate and appropriate insurance for your practice. ARB's guidance sets a minimum of £250,000 on an each and every claim basis, and asks you to keep at least six years of run-off cover after you stop practising (five years in Scotland) at the level of your final year. If you are employed, ARB expects you to make sure your employer has cover in place.
VAT for architects
You must register once taxable turnover for the last 12 months goes over £90,000, or if you expect to go over £90,000 in the next 30 days alone. Three points are specific to architects:
- Your fees stay standard-rated. Building a new home can be zero-rated, but HMRC says architectural, surveying, consultancy and supervisory services are always standard-rated. The exception is design and build, where the design is only a cost component of the contractor's zero-rated supply.
- Stage payments. On contracts with periodic payments, the tax point is the earlier of receiving payment or issuing a VAT invoice. Finishing a stage does not by itself create a tax point.
- Overseas clients. Services relating to a specific site follow the land rules and are taxed where the land is, so design work on a UK site stays within UK VAT even for a client abroad.
The Flat Rate Scheme rate for architects, civil and structural engineers and surveyors is 14.5%. Architects who spend under 2% of turnover or under £1,000 a year on goods count as a limited cost business and pay 16.5%, which is 19.8% of net fees, so compare both methods before joining.
Architects and the Construction Industry Scheme
Architecture and surveying are excluded from the Construction Industry Scheme (CIS), so an architect providing design services alone does not need to register or suffer CIS deductions. If your business also carries out or subcontracts construction work, CIS may apply to that part.
Key dates for 2026/27
- 31 January 2027: 2025/26 Self Assessment return and balance due, with the first payment on account for 2026/27.
- 31 July 2027: second payment on account for 2026/27.
- 31 January 2028: 2026/27 return and balancing payment due.
- 7 August, 7 November, 7 February and 7 May: MTD for Income Tax quarterly updates, if you are in the scheme.
- Limited companies: Corporation Tax payable 9 months and 1 day after the accounting period ends; annual accounts to Companies House within 9 months of the year end; Company Tax Return within 12 months.
- Each VAT period: return and payment one calendar month and 7 days after the period ends.
How GoForma helps architects
GoForma is an online accountancy practice based in London, working with clients across the UK by phone, video, email and WhatsApp. Our accountants are ACCA and AAT qualified, and FreeAgent accounting software, worth £360 a year, is included in every package.
- Sole practitioners: Start Sole Trader is £44 a month, 50% off for the first three months, with your Self Assessment return and a dedicated personal accountant. Start Sole Trader + MTD and Start Sole Trader + VAT are £68 a month each.
- Contractors and company practices: Start Bundle is £88 a month, 50% off for the first three months, covering year-end accounts, the CT600, payroll for one director and an IR35 review on every contract.
- VAT-registered companies: Operate Bundle is £128 a month and adds VAT returns, the director's Self Assessment, the confirmation statement and a London business address. Grow Bundle (£148) covers two directors.
Prices exclude VAT, run month to month and can be cancelled anytime. See all packages or book a free consultation. GoForma is rated 4.9 on Google from 72 reviews and 4.8 on Trustpilot from 142 reviews.