Accountants for Digital Marketing Agencies.

Only if you contract as the principal, meaning you buy the media in your own name and rebill it. If clients pay the platforms directly and you only invoice your management fee, the spend never touches your revenue. The distinction matters because rebilled media inflates turnover, hides your real margin and pushes you towards the £90,000 VAT registration threshold faster than your fees ever would. However you structure it, judge the agency on fee income, the money you keep for the work you do.

Direct payment is cleaner for most agencies: your books show only fee income, you never fund a client's campaign from your own cash, and a dispute never leaves you holding the media bill. Billing media through the agency gives you more control and suits some larger retainers, but only with money collected up front, because paying platforms before the client pays you is how agencies run out of cash. If you do bill it through, keep media in its own income and cost codes so it never muddies your margin.

For most business customers outside the UK, no. Marketing services follow the place of supply rules, which put the supply where your business customer belongs, so the invoice is outside the scope of UK VAT and the client deals with any local tax themselves. Keep evidence that the client is a business based overseas, and remember you can still reclaim the VAT on your own costs. Overseas consumers and a few special cases work differently, so check before assuming.

When taxable turnover passes £90,000 in any rolling 12 months, not in your accounting year, so the check is continuous. Watch it closely if you rebill media, because rebilled ad spend usually counts as your turnover and can drag a small agency over the threshold long before its fees would. Many agencies register voluntarily earlier anyway: business clients reclaim the VAT you charge, and registration lets you recover the VAT on your own costs.

Treat them as two different engines. Retainers cover the fixed base, so put every one on direct debit and know what percentage of payroll they cover; projects fund growth and tax, so forecast them from the pipeline at honest win rates rather than best case. A rolling 13-week cash forecast showing both, minus the VAT and corporation tax already owed, removes most of the surprises an agency bank account can produce.