To barter services, you swap a fixed piece of your work for a fixed piece of another business's work, priced in pounds but paid in work. A fair swap has six steps: find a match, price both sides at UK rates, agree scope and deadlines in writing, deliver in stages, sign off each stage and record it for tax.
What does it mean to barter services?
Bartering services means paying for work with work. HMRC's VAT manual calls this a barter transaction, "a transaction in which no monetary payment is made", and treats each side's work as the payment for the other's.1 Economists have a name for the lucky moment when two people each want what the other has, a "double coincidence of wants", and money took over largely because it removes the need for one, since you can sell to anyone and spend the cash somewhere else.2
That's still the hard part today, although most swaps that go wrong fail at the pricing or the paperwork, and those are the bits you can control. The services that swap well have a clear price and a clear finish, like a set of year-end books, a five-page website, a half-day photo shoot, a van and driver for a day or a batch of product descriptions. For a first swap we'd stick to something like that rather than anything open-ended.
Six steps to barter services with another business
This list is the whole method, and each step has one thing to do and one thing that often trips people up. The sections after it go into the detail.
- Find a match, meaning a business that needs what you do and sells something you'd otherwise pay cash for, and watch out for a swap that only one of you really wants.
- Price both sides in pounds, using the rate each of you charges paying customers, because hours that look equal often aren't.
- Write down the scope and deadlines, so it's clear exactly what's included and what isn't. Be wary of "and a few tweaks afterwards".
- Deliver in stages, trading a chunk of work for a chunk of work so that one side isn't finishing months before the other.
- Sign off each stage. A short message saying it's done and accepted is enough, and it stops jobs dragging on without anyone saying so.
- Record it as income by putting the swap in your books at its cash value, rather than treating it as a favour that doesn't count.
How do you find a match and price it at UK rates?
The easiest match is often a business you already know, such as a supplier, a neighbour on the trading estate or someone from your networking group. If nobody comes to mind, you can browse the services businesses are offering on Exchange of Services, where members list what they do, or see what people are asking for right now on the exchange board. Before you message anyone, we'd write down what the thing you want would cost in cash, because every other part of the deal is measured against that number.
Then price both sides. Say a bookkeeper and a freelance web designer agree to swap. One 2025 UK guide puts freelance bookkeepers at £25 to £40 an hour,3 and another puts a freelancer-built brochure website at £2,000 to £6,000.4 If the bookkeeper charges £30 an hour and the designer quotes £2,400 for a five-page site, the site is worth 80 hours of bookkeeping, which looks fair until you think about timing.
If the designer's books take six hours a month, the bookkeeper is still paying for the website more than a year later, long after the site went live. Both prices are perfectly reasonable, so it's the shape of the deal that needs changing rather than the numbers. If you've never put a firm price on your own hours, our guide to working out your day rate is a good place to start.
Writing the scope and deadlines down
Most arguments over a swap start with something nobody wrote down, so put the deal in one message or a short document that you both reply to with "agreed". It should say what each side is delivering, with numbers in it (five pages, twelve months of bookkeeping, forty edited photos), the cash value you've each put on it, the deadline for each stage, how many rounds of changes are included and what happens if one of you stops.
People tend to skip that last one, which is a shame, because it's the one you'll want if things go wrong. We'd suggest a simple rule, that if either side stops, they either pay cash at the agreed rate for what they've already received or the swap ends where it is. For a big swap, we'd ask a solicitor to look over the agreement before anyone starts.
Stages also solve the timing problem. In the example above, the designer could build the site in three parts and hand each one over as the bookkeeper finishes a matching block of months, and the two could agree to settle any gap left at the end in cash. Sign off each stage in writing when it's done, even if it's only a one-line message. To be fair, it can feel a bit formal between two friendly businesses, but without it a six-month swap can end with both of you feeling owed something and nothing on paper to settle it.
What are the disadvantages of bartering?
Five problems come up again and again, and finding a match is the first, because you can only swap with someone who wants your work at the same time you want theirs. Valuation comes next, since two traders can honestly put different prices on the same job, and even HMRC's VAT manual accepts that a difficulty arises "when each party has good reason for ascribing a different value".1
Work doesn't divide neatly either, and you can't hand over a third of a logo, however willing you are. A swap also uses up hours you could have sold for cash, and then there's trust, because if the other side goes quiet there's no invoice to chase.
None of this means you shouldn't swap, and the six steps deal with most of it, but they're still good reasons to keep your first swap small. We'd start with something under a month's work and see how the other business communicates before agreeing to anything bigger.
How do you record a swap for HMRC?
Swapping doesn't get you out of paying tax. HMRC's Business Income Manual says trading income received in a non-monetary form is "taxable in full", a rule written into law for transactions from 16 March 2016,5 so each side normally records the cash value of what it received as a sale. If you're VAT registered, which you must be once your taxable turnover passes £90,000 over any 12 months,6 VAT can apply to your side of the swap as well.
There's a newer reason to keep these numbers tidy, too. Making Tax Digital for Income Tax is HMRC's system of digital records and quarterly updates, and who has to join depends on their self-employment and property income before expenses.7 The threshold was £50,000 for people who joined on 6 April 2026, and it drops to £30,000 for April 2027 and £20,000 for April 2028.8 Swaps count as income, so they could push you over one of those thresholds even if very little cash has come in.
Keep the written agreement and the sign-offs with your records for at least five years after the 31 January filing deadline,9 and ask your accountant how your own swaps should be treated, because that's a question for someone who knows your figures. There's more on this in our piece on whether bartering is taxable.
When a swap beats waiting for the cash
Bartering services works best when cash is tight, both of you have spare hours and the job is clearly defined. If you price it honestly, write it down and deliver it in stages, a swap can get you the website, accounts or photo shoot you'd otherwise have put off for another year. Exchange of Services is free to join and charges no fees or commission, so when you're ready you can join free and list your services.
Frequently asked questions
What is trade by barter in economics?
Trade by barter means swapping goods or services directly, without money. It only works when each side wants what the other offers, which economists call a double coincidence of wants. Money gets round that, because you can sell to one person and spend the cash with another.
What are good things to barter with?
For a small business, services with a clear cash price and a clear finish swap best, such as bookkeeping, a small website, a photo shoot, copywriting, graphic design or a van and driver for a day. Open-ended jobs like 'help with marketing' are harder to swap unless you put hours and a deadline on them.
What are 5 disadvantages of bartering?
Finding someone who wants your work just when you want theirs is hard, and the two sides may value the work differently. Work can't always be split into fair parts, a swap uses hours you could have sold for cash, and if the other side stops there's no invoice to chase.
Are there apps for bartering?
Yes, several apps and websites let people swap goods or services. Exchange of Services is a free UK marketplace where businesses, sole traders and freelancers list their services in a public directory and post requests on an exchange board, with no fees or commission. Whatever you use, we'd agree the scope and deadlines in writing.
Do you pay tax on bartered services in the UK?
Generally, yes. HMRC treats trading income received in a non-monetary form as taxable in full, so each side usually records the swap at its cash value, and VAT can also apply if you're VAT registered. Talk to your accountant about your own situation.
Sources
- HMRC: VATVAL05900 Non-monetary consideration, barter transactions gov.uk
- Economics Help: Double co-incidence of wants economicshelp.org
- Better Account: What is the hourly rate for a bookkeeper in the UK betteraccount.co.uk
- Webpop Design: How much does a website cost in the UK webpopdesign.com
- HMRC: BIM40051 Receipts, whether trading income gov.uk
- GOV.UK: Register for VAT gov.uk
- GOV.UK: Work out your qualifying income for Making Tax Digital for Income Tax gov.uk
- GOV.UK: Check if you're eligible for Making Tax Digital for Income Tax gov.uk
- GOV.UK: Business records if you're self-employed, how long to keep your records gov.uk
