How much does an accountant cost / charge in the UK? Accounts for self-employed and limited companies (Part 1)
Saturday, September 7th, 2019 in: Advice
How much does an accountant cost?
How much does an accountant in the UK cost for small business owners and individuals? This is a question that you may be searching for if you have just started a new business for the first time.You may even be wondering what the benefits of having an accountant are or ‘Do I need an Accountant?’. We will cover those questions in another article…
Price Guide for Accountants Cost / Fees
The prices below depend on your circumstances and size of business where applicable. How much does an accountant cost typically for the following services…
- Individual tax return – £75 to £400+vat per annum
- Self-employed tax return and accounts – £250 to £1,000+vat per annum
- Limited company – £40 to £250+vat per month for accounts, tax returns and payroll is fairly typical
Normal Fees for Accountants
Q – ‘How much does an accountant cost?’
A – ‘How much is a piece of string?’
This may be fairly typical off the cuff answer from a traditional accountant. The truth is that many accountants do not like discussing costs, fees, prices or whatever you want to call it. But I will ask why! Why should any business, accounting or otherwise not be transparent when it comes to pricing?
This leaves the potential client with the following questions:
- What are they hiding?
- They must be expensive!
- How can I just get an idea of cost?
- Do they have fixed fees or not?
The actual reason that most accountants do not talk about cost on the phone and especially on their website is that they have no consistent and official pricing system. In some cases, they may as well just stick their finger in the air and see which way the wind is blowing and make up a number!
Ok so that’s a bit harsh but a typical method is to find out how much you are paying and quote the same or maybe a bit less to try and win the work. The issue with this is that it’s not consistent, it’s not fair on your other clients that are paying a different amount and it’s quite frankly making it up as you go along.
The badge above has been awarded to Cheltenham Tax Accountants for being champions of clear and transparent pricing. What that means is that we don’t make our prices up from client to client and we actually show you a breakdown of our fees line by line for the exact services you have asked for. I will now dive into the detail…
We charge for preparing a set of accounts based largely around three different factors.
- Whether are you self-employed or a limited company
- The size of the business (measured by your annual turnover)
- The quality and type of your bookkeeping system/records.
The fees may also depend on how qualified the accountant is. For example, we are members of the ACCA / Association Chartered Certified Accountants whereas some have no formal qualifications!
I will give you some guideline figures to get an idea of our fees in this area. We charge £18+vat for per month for a self-employed person’s accounts with a turnover between £10k to £30k where the ‘books’ are kept on a simple spreadsheet (we can provide a template for this).
You will also need to add on £13+vat per month for the actual completion and submission of your self-assessment tax return, so the TOTAL FEE all in would be £31+vat per month (£37.20 including VAT). Be careful to include the VAT on any fees if you are not a VAT registered business yourself (where you can claim it back).
Limited company example:
A limited company set of accounts has far more requirements than a sole trader / self-employed person. I won’t bore you with the full details but these need to be submitted to Companies House and must comply with more rigorous accounting rules. You must have a more complete bookkeeping system to enable the completion of these accounts also. If you have a limited company with a turnover between £10k to £30k (or you are a contractor) then the fees for the accounts are £59+vat per month, if the revenue is £30k to £80k then this increases to £79+vat and it goes up slightly depending on the size of the business.
The thing with a limited company is that there are several other services you are likely to require. The standard ones will be your personal tax return for £13+vat p/m and potentially the management and submission of a PAYE scheme to pay yourself as the director which can be as low as £13+vat p/m. An all-inclusive package excluding bookkeeping and VAT returns would be in the region of £90 to £120+vat p/m.
This is a whole new area for businesses and is something that you as the business owner could potentially do yourself. We even provide training for you to do it yourself! To give it the justice it needs we will explain how we charge for bookkeeping in part 2 of our ‘How much does an accountant cost / charge in the UK?’ series. Please note that the fees above to not accounts for bookkeeping and assume that you either have very little transactions or you complete your own bookkeeping currently.
How much does an accountant charge to do a tax return?
If you are not a business owner then your self-assessment tax return may be more straight forward. In this instance, a standard UK tax return would cost from £75 to £300.
At the lower end, you have something like Taxscout who says they will file any tax return even with business income for £119+vat! They are not looking to provide a substitute for a genuine accountants’ service. Taxscout competes with filing your own tax return for free direct with HMRC with a little extra guidance. For taxpayers with simple affairs, this may be an option but bear in mind with the fee there is an element of you get what you pay for. To our knowledge, there are no phone calls, meetings or proactive tax planning included with their service.
Why you may
not want a cheap accounts or tax service?
This article takes a deep dive into why cheap accounts and tax services are not the only consideration. In a nutshell to save you reading on, you can’t have your cake and eat it, so there needs to be a compromise which is often one of the following three elements of service:
- Speed of delivery and service