How much do Accountants charge in the UK?

Key Takeaways 

• Knowing what affects the cost of an accountant is important for making smart hiring decisions.
• Get quotes and services from several companies to find the best deal for your business. You should look at fees and service quality.
• Hiring a professional accountant can save you time, help you better manage your money, and give you access to expert advice.

Typically, these services consist of:

• Annual Accounts Preparation
• Bookkeeping
• Corporation Tax Returns
• Director’s Personal Tax Returns
• Monthly and yearly returns.
• Quarterly VAT returns
• Advice on Tax Avoidance Legislation (IR35)
• Ongoing Day-to-Day Advisory Services

Often packaged together at a set monthly cost, these basic services are influenced by variables such as firm turnover, the degree of services needed, and location inside the UK; this charge could range from £60 to £750 per month. An accountant’s fees for a small business with more staff and turnover should be expected to be higher, or an accountant specialising in working with a certain type of industry will charge more for their specific expertise.

• Explore our guide on ‘Does IR35 apply to Limited Companies?‘ to understand its impact on accounting costs.

Understanding Accounting Costs for Small Businesses

Independent businesses in the UK can pay distinct rates for an accountant. Charges from an accountant depend on the services performed. For instance, the cost of annual accounts preparation or bookkeeping services might differ from the cost of VAT returns or director’s personal tax returns. Based on the company size and accounting complexity, online accountants could provide more competitive prices for small business accounting than conventional accounting firms that focus on location and being in close proximity to a business.

Self-Assessment and Tax Returns

Usually, accountants charge a one-time fee for annual self-assessment tax return services. Depending on the degree of financial difficulty, these tax return fees in the UK typically range from £200 to £500 or more. Higher-income levels, rental income tax, capital gains tax, and multiple income sources tend to result in higher fees. While more complicated returns, such as those for self-employed accounting or those with variable income sources, demand extra fees.

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Flexible Payment Options for Accounting Services

Many businesses choose fixed monthly fees for accounting services to maintain financial predictability. For individuals wanting more freedom, hourly charging or per-service costs are also somewhat prevalent. Another choice is a mix of hourly rates for specialised services, including tax planning services, inheritance tax planning, or tax-efficient investments, with set fixed fee costs for regular services such as mandatory compliance, etc.

Service-Based Fees

For businesses that prefer to pay per service, typical one-off fees include:

Business Accounts: The fee starts at £450 for a business turning over £20,000 to £30,000 in revenue, but most accountants who have been in practice for some time will charge a minimum fee of around £800 to maintain the level of their service and staff costs.

• Turnover between £100,000 and £130,000: £1200+.
• Turnover between £250,000 to £300,000: £1400+

Payroll Services (including PAYE):

• 50 employees: £200 per month
• 100 employees: £500 per month

The Director’s Tax Return starts from £150+ depending on other sources of Income.

VAT Returns

• Turnover £0 to £100,000: £100
• Turnover £100,000 to £200,000: £150.
• Turnover: £200,000 to £400,000: £200

Usually, service rates rise with company size and staff count. Furthermore, rental property ownership adds to the expenses on the tax return.

Factors Influencing Accountant Fees

The intricacy of the services needed and the particular demands of the company determine a lot of elements that affect the cost of an accountant. For example, preparing financial statements or reviewing them may incur additional charges. Many often, businesses inquire, “How much does it cost to get a financial statement reviewed?” or “How much do accountants charge per invoice”? These questions capture the diversity of services accountants offer as well as the different prices connected to each one. Fees can also be affected by other elements such as tax credits, tax audits, corporate restructuring, tax laws, HMRC compliance, and foreign tax concerns.

• Understanding UK taxation essentials can provide insight into how tax laws and compliance affect accountant fees learn more in our UK Tax: A Brief Overview of Taxation in the United Kingdom.
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• Guide to HMRC Self-Assessment Forms

Optimising Accounting Costs

Businesses should retain solid record-keeping habits, offer required information right away, and apply advised software programs to keep accounting costs low. It is recommended to compare rates and services across several accounting firms in London or other locations since the best value is not usually the most affordable one. One must strike a compromise between cost and the calibre of the given services. If you plan your taxes well and get personal tax advice, you can save a lot of money on taxes, which can cover the costs of accounting.

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Are there any other services that an accountant can provide?

Accountants’ main services are usually putting together yearly financial statements, keeping books, and filing tax returns. However, there are many other services that can be very helpful for small businesses. These services promote strategic business development and stability in addition to helping to preserve compliance and financial accuracy. Accountants can provide these further services as well:

• Payroll Management
• Management Accounting
• Cash Flow Forecasting
• Budgeting and Financial Planning
• Tax Planning and Advisory Services
• Audit and Assurance Services
• Company Formation and Registration
• Business Valuation Services
• Pension and Benefit Administration
• Forensic Accounting
• Debt Collection Services
• Financial Software Training and Support
• Mergers and Acquisitions Support
• Succession Planning

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For small businesses to make smart hiring decisions, they need to know how much accounting services cost. Businesses can get the best deals and find a good balance between service quality and fees if they know what affects these costs. Hiring a professional accountant will save time, enhance financial control, and offer insightful advice.

Should I switch to cheaper accountants?

Changing to a less expensive accountant could sound like a smart option if you are attempting to save money. Still, before deciding anything, there are plenty of factors to consider:

• Cheaper accountants may lack knowledge or experience, which can be crucial for your company’s finances, particularly if you have challenging accounting requirements.
• See whether the less expensive accountant can handle all your needs. Prices falling could indicate either greater hidden costs or reduced service offerings.
• Although reduced rates immediately save money, accountants with extensive expertise and solid qualifications could help you save more money over time.
• Some accountants use more advanced apps and tools that help them handle your money more quickly and correctly.
• Getting in touch with accountants who operate in less expensive or farther-off locations than in your neighbourhood could prove more difficult, so think about how local you want your accountant to be.
• Investigate the less expensive accountant’s name and reviews to learn more. One should pick someone they can rely on.
• Although pricing is clearly a consideration, also consider what your company requires and the quality of the offered services. By choosing a less expensive accountant, you could save money; yet, you should make sure the degree of information and service satisfies the requirements of your company

Discover essential guides on choosing the right accountant and maximizing their impact on your business’s success.

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• Complete Guide of Hiring a small business accountant
• How Working with an Accountant can Help Your Startup Grow?
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Frequently Asked Questions (FAQs)