Accountant for Cleaning Businesses: Sole Trader, Limited Company or Taking On Staff?

A cleaning business is usually one of three things, and the tax answer changes with each. You are a sole cleaner working for householders and small offices, or you run a cleaning limited company with contracts and invoices, or you have crossed into being an employer with a payroll and other people's wages to fund. Start by finding your row in the table below, because the figures that matter to you sit in that row and nowhere else.

Sole cleaner, limited company or employer: what changes

Where you are	What you pay tax on	2026/27 figures that bite	What the admin looks like
Sole cleaner (self-employed, no staff)	Profit, through Self Assessment: income tax at your marginal rate plus Class 4 National Insurance	£1,000 trading allowance covers tiny income; £90,000 VAT threshold you almost certainly never reach	One tax return a year. Register by the 5 October after the tax year in which your gross income first passed £1,000
Cleaning limited company (you and perhaps a partner, no staff)	Company profit through corporation tax, then you again on salary and dividends	Corporation tax 19% under £50,000 of profit, 25% over £250,000, with marginal relief on profits between £50,000 and £250,000 giving an effective 26.5% on the slice in the band; dividend rates 10.75% and 35.75% from 6 April 2026	Statutory accounts, a corporation tax return, a confirmation statement, payroll for your own salary, plus your personal return
Employer (any structure, one or more employed cleaners)	Everything in your row above, plus the employment taxes on each wage	Employer National Insurance 15% on pay above £5,000 a year from 6 April 2025; Employment Allowance £10,500; minimum 3% employer pension on qualifying earnings of £6,240 to £50,270 (2025/26 thresholds)	PAYE payroll reported on or before every payday, auto-enrolment, employers' liability insurance, and TUPE exposure on contract changeovers

Nothing in that table makes one row better than another. The company row buys you limited liability and often wins commercial work, and it costs you a set of filings you did not have before. The employer row is what lets you grow past the hours in your own day, and it is the row where the money moves fastest, because you pay wages weekly and get paid by commercial clients much later. If that gap is your problem rather than your tax, our page on invoice finance for cleaning companies deals with funding it.

The sole cleaner row in detail

If you clean for private households and small offices on your own, you are self-employed. You pay income tax on your profit at your marginal rate, plus Class 4 National Insurance. Class 2 National Insurance stopped being a payment you make from 6 April 2024: if your profits are at or above the Small Profits Threshold you are treated as having paid it and your state pension record keeps building.

Two numbers decide whether you need to do anything at all. The first is the trading allowance of £1,000. If your gross cleaning income for a tax year is £1,000 or less, that income is covered and you may not need to file. Above £1,000 you register for Self Assessment by the 5 October after that tax year ends, and you deduct either the £1,000 allowance or your actual expenses, never both. Cleaners with real product and travel costs almost always claim actual expenses instead.

The second number is £90,000. That is the VAT registration threshold, tested on your taxable turnover in any rolling 12 months, and a solo cleaner rarely gets near it. Watch it once you start subcontracting work out or billing commercial sites, because it is turnover that counts, not profit.

When the limited company starts to make sense

Commercial clients, facilities management firms and letting agents often prefer to contract with a company, and some will not place work with a sole trader at all. That, plus limited liability on a site where your staff handle keys and equipment, is usually the reason cleaners incorporate, rather than a tax saving. Model the tax before you assume there is one: the company pays corporation tax at 19% on profits up to £50,000, with profits between £50,000 and £250,000 attracting marginal relief that works out at an effective 26.5% on the slice in that band, and you then pay dividend tax at 10.75% in the ordinary rate band or 35.75% in the upper band from 6 April 2026, with a £500 dividend allowance. Take £45,000 of profit. As a sole trader that is roughly £6,486 of income tax and £1,946 of Class 4 National Insurance. Through a company on a £5,000 salary and the rest as dividends, corporation tax at 19% on £40,000 is £7,600 and the dividend tax on what you draw runs at 10.75% above the £500 allowance, so the two land closer together than the headline rates suggest once you price the accounts and the payroll. At the profit level of a small cleaning firm the gap between the two structures is narrower than most people expect.

What it really costs to employ a cleaner

Your first hire is where cleaning businesses get their pricing wrong, because the wage is not the cost. Take a full-time cleaner on a salary of £22,000 in 2026/27.

• Salary: £22,000
• Employer National Insurance at 15% on the pay above the £5,000 secondary threshold: 15% of £17,000, so £2,550 (rate and threshold in force from 6 April 2025)
• Employer pension at the 3% minimum on qualifying earnings, that is the band from £6,240 to £50,270 (2025/26 thresholds): 3% of £15,760, so £472.80

Total: £25,022.80. That is 13.7% above the headline wage, before payroll software, employers' liability insurance, which is compulsory, and the cost of covering holiday and sickness on a contract that has to be cleaned whether or not your cleaner is there.

One figure can remove a chunk of that. The Employment Allowance of £10,500 offsets employer National Insurance for a business with genuine employed staff, which takes the £2,550 to nil and the loaded cost to £22,472.80. It is not available to a company whose only employee is a single director, so it arrives exactly when you make your first real hire.

You also need pension auto-enrolment from the first eligible employee: aged 22 to State Pension Age and earning over the £10,000 trigger, into a qualifying scheme, with a minimum total contribution of 8% of qualifying earnings of which you pay at least 3% (2025/26 figures). Payroll itself is reported to HMRC on or before each payday under Real Time Information, and late filing costs £100 a month while you have fewer than 10 employees.

Contract changeovers and the staff who come with them

Winning a cleaning contract from another provider often means the existing cleaners transfer to you under the TUPE regulations, keeping their service and their terms. This is employment law, not tax, and it belongs with the client and an employment solicitor rather than with your accountant. What it does to your numbers is immediate, so ask who currently cleans the site, on what terms, before you price the job. Security firms face the same issue on guarding contracts, and we cover their version in our page for security firms.

VAT questions cleaners actually ask

Is there VAT on cleaning products?

Yes, at the standard rate of 20%. Cleaning chemicals, mops, cloths, vacuum cleaners, floor machines and consumables are all standard rated, so the price you pay a wholesaler includes 20% VAT. What happens next depends on your registration status. If you are VAT registered, you reclaim that 20% as input VAT on your return. If you are not registered, you cannot reclaim it, and the VAT-inclusive price is what the products cost you. Put that in your hourly rate rather than discovering it at the year end.

Do I have to charge VAT on cleaning?

Cleaning services are standard rated, so once you are registered you add 20% to your invoices. You must register when taxable turnover passes £90,000 in any rolling 12 months or when you expect to pass it within the next 30 days. Test it monthly on a rolling basis, not on your accounting year, because a run of commercial contracts can carry you over mid-year.

Should I register voluntarily?

It depends who your customers are. Commercial clients reclaim the VAT you charge them, so registering below the threshold mainly costs them nothing and lets you reclaim the 20% on your products and machines. Householders cannot reclaim anything, so registering makes you 20% more expensive to every domestic customer overnight. A domestic-only cleaner below £90,000 usually stays unregistered; a business cleaning offices with heavy equipment spend often gains from registering early.

What about the Flat Rate Scheme?

The Flat Rate Scheme lets you pay a single percentage of your VAT-inclusive turnover instead of tracking input VAT, and you can join with expected taxable turnover of £150,000 or less excluding VAT. Check the limited cost business test first. If your goods cost less than 2% of turnover, or less than £1,000 a year, your flat rate is 16.5%, which is a poor deal. A cleaning business buying real volumes of chemicals and equipment often passes that goods test where a labour-only service business does not, so the scheme is worth pricing rather than dismissing.

What an accountant is actually for here

For a solo domestic cleaner, not much: one return a year, and the honest advice is often to do it yourself until the numbers grow. The work starts paying for itself at the points where a wrong answer is expensive. The VAT threshold arriving mid-contract. The first hire and the loaded cost above. The decision to incorporate when a facilities management client asks for a company. A contract changeover where staff and their costs come with the work. Those are the moments to get a second pair of eyes on the numbers, and the rest of the year is bookkeeping.