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Everything‌ ‌You‌ ‌Need‌ ‌to‌ ‌Know‌ ‌About‌ ‌Accountancy‌ ‌Fees‌ ‌in‌ ‌the‌ ‌UK‌ ‌

There comes a time in every small business’s life when the money flowing into and out of the company becomes overwhelming, or at least better off in expert hands. Unless you’re particularly passionate about numbers, accountancy fees rank among the best investments you can make in your continued success.

Accountants are considered all but essential for every growing business. The cost and time savings from leaving such complex matters in the hands of a professional soon add up.

Most small businesses understand that they need an accountant, but they’re not always sure how much those accountancy fees should be. This comprehensive guide will cover what you can expect to pay, what you should look for in an accountancy service and everything else to make the right call.

How Much to Budget for Accountancy Fees

You’re reading this article to discover how much a UK accountant will cost, and we’re here to be as specific as possible. However, we’ll get the obvious part out of the way first.

Every company is different, yours included. The value and frequency of incomings and outgoings are probably nothing like any other business in the country. As a result, there’s no one-size-fits-all approach to accountancy fees. Whether you approach an individual or a firm, they’ll consider the following, among other factors:

  • Your business turnover
  • The number of employees
  • Your VAT registration status
  • The specific services you require

While it’s last on the list, the final point is perhaps the most important. Completing a tax return might be the most stressful part of the year for some directors. Keeping an eye on the accounts might drive them to despair.

For a great accountant, it’s just another day at the office.

Whoever you decide to work with, they have a good idea of what you need and what it will cost you.

You should also consider the price of entry. There is often a minimum fee that accountants need to make the work worthwhile – and it’s not always published. Good accountants are rarely short of interested clients. While something might cost £20 on an itemised bill, that alone might not be enough to get your foot in the door.

With all of this in mind, £150 per month stands out as the ideal starting point for professional accounting services in the UK. Of course, you can’t expect more than just the basics at that price point, but it will take some stress out of your day to day operations.

If that price fits your business plan, you can expect the following:

  • Setup of your business on HMRC’s online platform
  • Completion and submission of annual accounts
  • General bookkeeping
  • Approval and submission of your annual corporate tax return
  • Payroll processing for a limited number of employees
  • Submission of quarterly VAT returns for applicable companies

Taking on an accountant, even at this level, makes perfect sense. Many business owners have at least a vague idea of how to do all of that themselves. However, just as many have a long list of tasks they’d rather spend their time on.

As we’ve hinted at already, plan for your monthly accountancy fees to increase for anything above these basics.

Additional Accounting Responsibilities and Fees

It’s often only when going above and beyond the basics that accountants tend to demonstrate their true value.

We’ve discussed the tasks that most directors and owners probably could do but prefer not to. Now, we enter the realm of financial expertise.

If you’re happy to double the original budget and spend £300-£400 per month on accountancy fees, you can expect:

  • Tax payment services, directly to HMRC
  • Quarterly accounts
  • Assistance with financial planning and business expenses
  • Tax planning
  • Further accounting support for employees, such as tax returns
  • Guidance on other corporate finance essentials, such as insurance and capital management

Common UK Accountancy Fee Structures

Accountants aren’t in the habit of turning business away. They often have guidelines they must follow, especially at larger companies, but they’re generally flexible in their working arrangements.

UK accountancy fees tend to fall into one of the following categories:

Retainers

The monthly retainer is by far the most common fee structure when outsourcing accounting. Usually paid each month, but often also available annually at a slight discount, this setup provides clarity for the company and accountant alike.

Following an initial agreement around what the accountant will do each month, quarter and year, business owners can focus on working on their success.

Hourly Rates

Not all accountants charge the same hourly fee for all work. Nevertheless, this is an option for businesses that don’t want to commit to recurring payments.

One slight downside of this model comes down to the popularity of retainers. Accountants, like most businesses, like predictable, regular work. For most, having every available hour booked up in advance is the dream scenario. So, naturally, it leaves little time for hourly billing.

If you’re partway through a tax return or struggling to finalise a budget, a couple of hours with a specialist to get it over the line is money well spent.

Project-Based Pricing

Accountants who don’t rely on retainers or use a hybrid business model will often publish flat fees for everyday accounting tasks.

This menu-based format can be ideal for businesses, as everyone knows where they stand before they even make contact.

Doing The Accounts Yourself

There’s nothing to stop any business owner, from sole traders to limited company directors, from taking on some of the accounting tasks themselves. In companies with capacity and some level of financial competence among the workforce, there is nothing wrong with delegating either.

First and foremost, doing it yourself requires a certain degree of aptitude. Errors, especially when it comes to tax and payroll, can result in far-reaching consequences.

In most cases, it will also take an accountant a mere fraction of the time to achieve the same or better result. As they say about most skilled professions, the price you pay isn’t just the hourly rate or retainer but covers the years invested in qualifications and experience.

Firms and individuals alike tend to charge around £35 per hour for basic accountancy services. Specialist advice can reach £150 per hour and more. However, if they can achieve in an hour something that would take you an entire morning, it makes a lot of sense.

In the bootstrapping stages of growth, most small businesses will complete the accounts in-house and do enough to meet their legal obligations. However, with money being the primary motivation and biggest challenge at most startups, hiring an accountant ranks high on the priority list.

For context, a 2019 article ranked appointing a chief financial officer as the sixth highest priority at startups. Roles that the business owner will often be more inclined to carry out themselves, like sales and marketing, occupy the higher positions.

Even then, the same article suggests that most startups should outsource finance roles. Of course, that’s what you get from an accountant, and it’s the justification for someone with an eye for numbers being relatively low on the list.

Speak to an Expert

Here at Accountancy Cloud, we work with companies of all sizes. So whether you’re a brand new startup, a small or medium business that wants to leave its finances in safe hands or a financial director seeking outside expertise, we can help.

Thanks to our fair, flexible pricing, we can meet the exact demands of your organisation. Step one is to speak to an expert. They’ll work to understand your unique requirements and detail exactly how we can take the hassle out of corporate finance on your behalf.

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  • 9/10 customers recommend us
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  • Financial support to meet all your accounting needs

Frequently Asked Questions

How Much Does an Accountant Cost UK?

As one of the world’s leading financial hubs, there is no shortage of choice when it comes to UK accountants. Fees vary based on all sorts of factors, from the size and sector of your business to your location. But, most importantly, accountants understand that different companies have different needs. So the more you need them to do, the higher the fees you can expect to pay.

How Much Are Small Business Accounting Fees?

Small businesses often have limited requirements compared to their larger counterparts. Owners of these businesses can budget in the hundreds each month to take care of their financial needs. Their accountant will also ensure they comply with HMRC requirements, leaving them to focus on running the company.

How Much Do Accountants Charge For Year-End Accounts?

Year-end accounts are critical to satisfy tax requirements and give the management team a factual overview of where the business stands. Prices for completion through an accountant can vary depending on turnover levels, but it’s wise to budget somewhere in the region of £200-£600 for completion and filing.

Can I Claim Accountant Fees on Tax Return?

Hiring an accountant is similar in scope to outsourcing design, marketing or anything else in your business. As such, the fees paid count as a business expense like any other. As such, those fees are perfectly suitable for claiming back for tax purposes. So naturally, your accountant will likely take care of this on your behalf as part of their efforts!