How much do accountants charge?
Fees for an accountant can vary greatly, depending on the size of your business, the scale of your activities, and the services you need.
Summary
- The higher your income and the more sources of income you have, the higher the fee is likely to be
- You can pay your accountant a monthly fee or by the hour and for individual services
- Don't be afraid to shop around and compare to find the best accountant for your needs
What is the average cost of an accountant for a small business?
A small business may be anything from a self-employed contractor to a limited company with up to 50 employees.
Accounting for this kind of enterprise usually includes a range of services delivered as a package, typically including:
- Annual accounts
- Bookkeeping
- Corporation tax returns
- Director’s personal tax return
- Monthly and annual payroll returns
- Quarterly VAT returns
- Advice on tax avoidance legislation (IR35)
- Ongoing day-to-day advice from your accountant
The above is a fairly standard core package (some accounting firms may offer more) and is usually delivered for a fixed monthly fee.
For smaller businesses, monthly accounting fees can start from under £50.
On average, the monthly cost varies based on business size: sole traders can expect to pay between £100 and £150, start-up businesses typically incur fees of £300 to £400 (plus VAT), and established businesses may face costs ranging from £500 to £1,000 (plus VAT).
Businesses with more employees and higher turnover can expect to pay more.
How much do accountants charge for tax returns and self-assessment?
An accountant will charge a one-off fee for an annual self-assessment tax return, which will typically range from £150 to £300, depending on the complexity and scope of your finances.
Broadly speaking, the higher your income and the more sources of income you have, the higher the fee is likely to be.
Fees of around £200 would generally cover basic self-assessment services, while more complex tax returns (for self-employed people or those with unpredictable income streams) would require more work and so involve a higher fee.
A good accountant should be able to save you some money by identifying tax savings in addition to the time they can save you.
In some cases, your tax bill may decrease to the extent that you end up saving even more than the accountant's fee.
What are some alternative ways to pay your accountant?
Many businesses prefer to pay their accountant a monthly fee as this provides certainty.
However, you can also pay your accountant by the hour or for individual services.
You can also mix and match by paying for some services via a fixed amount or monthly fee while paying for bespoke services by the hour.
An accountant performing basic accounting services will usually work for between £35 and £60 per hour.
More specialist services like tax planning and business planning advice may be more expensive.
What are the different accounting services fees?
Some businesses choose to hire their accountant on a service-by-service basis, such as for year-end accounting, VAT returns or payroll services.
These are some of the general ranges that you can expect to pay for accounting services:
| Service | Cost range |
|---|---|
| Bookkeeping | £20-£50 per hour |
| Tax Preparation | £150-£500 per return |
| Financial planning | £100-£300 per hour |
| Part-time chief financial officer services | £1,000-£5,000 per month |
Generally speaking, fees for services like business accounts and VAT returns will rise with company turnover.
Likewise, payroll fees will usually rise with the number of employees. If you own rental properties, then this can add to the cost of your personal tax return.
Remember: the fees given in this guide are for guidance only.
Talk to an accountant about what services you need and ask them to quote their own rates.
Don’t be afraid to shop around and compare. Also, the cheapest services may not be the best, and the most expensive isn’t necessarily the best either.
You can do your bit to keep accounting fees to a minimum by maintaining good record keeping, providing necessary information in good time and using appropriate software (ask your accountant what package they recommend).
Considering switching? Check out our article on nine reasons to switch your accountant here.
Get expert financial advice
Choosing the right accountant for your business is a crucial decision that can significantly impact your financial health and success.
By understanding the typical costs and exploring various payment options, you can find an accounting service that fits your needs and budget.
Remember to shop around, compare services, and prioritise quality and expertise to ensure you receive the best possible support for your business. Investing in professional accounting services can ultimately save you time, money, and stress, allowing you to focus on growing your business.
Unbiased will match you with the right accountant to streamline your financial processes, maximise tax savings, and provide expert guidance tailored to your business needs.
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