Filing Your Company Tax Return as a Freelance Developer

Running a software development business through a limited company gives you flexibility and tax efficiency — but it also means filing a company tax return with HMRC each year. This guide explains how the CT600 works for freelance developers: what income and expenses to report, how capital allowances apply to your equipment, and what to watch out for.

What Is the CT600 and Do You Need One?

The CT600 is the corporation tax return every UK limited company must file with HMRC. If you operate your freelance development work through your own limited company, you will need to file one every year — including years where your company makes no profit.

The deadline is 12 months after your accounting period ends. Your corporation tax payment is due earlier: 9 months and one day after the period end. For a clear overview of your obligations, see our guide on whether you need to file a CT600.

How Your Income Gets Reported

As a freelance developer, your company earns income from client contracts — whether day rate, fixed project fees, or retainers. All of this counts as trading income and feeds into your CT600 as turnover.

From your turnover, you subtract allowable expenses to arrive at your tax-adjusted profit. This figure flows through to CT600 Box 400: Profits Chargeable, which is the amount corporation tax is calculated on.

A common point of confusion: your CT600 reports what your company earns and spends, not what you personally receive. Salary paid to you as a director is a deductible company expense. Dividends are paid from post-tax profit and do not appear as expenses on the CT600.

Allowable Expenses for Freelance Developers

Claiming all allowable expenses reduces your taxable profit and therefore your corporation tax bill. The key categories for developers:

Software and Subscriptions

  • Development tools and IDEs (JetBrains, Visual Studio, code editors)
  • Cloud services used for client projects (AWS, Azure, Google Cloud)
  • SaaS products used in your business (project management, design, communication tools)
  • Domain names, hosting, and SSL certificates for your business website
  • Professional memberships relevant to your work (e.g., BCS, ACM)

Hardware and Equipment

Hardware is generally claimed through capital allowances rather than as a direct expense. The Annual Investment Allowance (AIA) allows you to deduct the full cost of qualifying plant and machinery in the year of purchase. For most freelance developers, this covers:

  • Laptops and workstations
  • Monitors, keyboards, and peripherals
  • External storage and networking equipment
  • Test devices such as phones and tablets used for testing client work
See our guide to AIA and capital allowances (Box 690) for how this is claimed on your CT600.

Home Office

If you work from home, your company can reimburse you for a proportion of home costs — electricity, heating, broadband — based on how much of your home is used for work and for how many hours. HMRC accepts a reasonable allocation based on room usage.

Alternatively, your company can pay a flat use-of-home allowance, which avoids the need to log individual utility bills.

Professional Services

  • Accountant and bookkeeping fees
  • Legal advice (contracts, intellectual property protection)
  • Professional indemnity and business insurance

Training and Development

Courses and conferences that maintain or improve skills relevant to your existing development work are allowable. The course must relate to your current trade — training in an entirely unrelated skill is generally not deductible.

Travel

Travel to client sites that is not your permanent workplace is allowable. If you work at a client's office for more than 24 months, that site may become a permanent workplace under HMRC's rules, making the commuting costs disallowable from that point.

IR35 and Your CT600

If your contracts fall inside IR35, HMRC treats your income as deemed employment. The end client or agency deducts income tax and National Insurance contributions at source before paying your company. This means your company receives the net amount — and your CT600 reflects lower taxable profit than the gross contract value.

Outside IR35 contracts are treated as normal company trading income, with the full contract value recorded as turnover.

IR35 status does not change whether you need to file a CT600 — it changes how much profit reaches your company after tax-at-source deductions.

Corporation Tax Rates on Your Profit

For the financial year from 1 April 2023, corporation tax rates are:

  • 19% on profits of £50,000 or less (small profits rate)
  • 25% on profits above £250,000 (main rate)
  • A tapered rate via marginal relief for profits between £50,000 and £250,000
As a freelance developer operating a single-director company with no associated companies, the full £50,000 and £250,000 thresholds apply. Most developers structuring their income as a combination of salary and dividends will have modest taxable company profit, often falling within the small profits rate band. See our guide to marginal relief (Box 450) if your profits fall in the tapered range.

Director's Salary and Dividends: The CT600 Perspective

Directors of freelance developer companies typically pay themselves a combination of salary and dividends. From the CT600's perspective:

  • Salary is a company expense and reduces taxable profit before it reaches the CT600 calculation
  • Employer's National Insurance on salary above the secondary threshold is also a deductible expense
  • Dividends are paid from post-tax profit and do not appear as expenses on the CT600
The CT600 simply reflects the company's total expenses — including salary paid — and the resulting taxable profit. How much you personally receive as salary versus dividends is a personal tax matter handled through your Self Assessment return, not the CT600.

What If Your Company Makes a Loss?

If your allowable expenses exceed your company's income in a given year — perhaps during a quiet period, when setting up, or following a significant equipment purchase — your company will make a trading loss. This appears in Box 780 of your CT600.

You must still file your CT600 in a loss year. The loss carries forward to reduce taxable profits in future years, with no expiry date. For full details on how the CT600 losses section works, including Boxes 780, 800, and 805, see our CT600 losses section guide.

How to File Your CT600

Your CT600 is filed online through HMRC's Corporation Tax online service. To complete it, you will need:

  • Your company's Unique Taxpayer Reference (UTR)
  • Your accounting period start and end dates
  • A profit and loss account and balance sheet from your accounting software
  • Details of any capital allowances claimed
  • Any losses brought forward from prior years
Most freelance developers use accounting software (such as FreeAgent, Xero, or QuickBooks) to generate the financial statements that feed directly into the CT600.

Keeping Records

HMRC requires you to keep business records for at least six years. For a freelance developer, this means:

  • All invoices raised to clients
  • Receipts and invoices for all business expenses
  • Bank statements
  • Payroll records if paying yourself a salary
  • Records of dividends declared
Keeping records up to date throughout the year makes completing the CT600 significantly quicker at the end of the accounting period.

Summary

For freelance developers, the CT600 is straightforward in most cases: trading income minus allowable expenses gives your taxable profit, which is taxed at 19% or 25% depending on the size of your profit. The main areas to focus on are claiming all software and hardware costs correctly, using the Annual Investment Allowance for equipment, handling IR35 status accurately, and filing on time — even in a loss year.