An accountant’s fees can vary a great deal, depending on the size of your business, the scale of your activities and the services you require. Location can change costs too, as accountants in Glasgow, for example, are likely to be cheaper than their counterparts in London. However, once you know these things it’s quite easy to estimate the likely cost of your accountant.
General accounting for small businesses
A small business could be a self-employed contractor or it could be a limited company with several employees. Accounting for this kind of business usually includes a range of services delivered as a package. These packages usually include:
- Annual accounts
- Corporation tax returns
- Director’s personal tax return
- Monthly & annual payroll returns
- Quarterly VAT returns
- Advice on tax avoidance legislation (IR35)
- Ongoing day-to-day advice from your accountant
These packages are usually delivered for a fixed monthly fee.
For a small company, this monthly fee can be as low as £60 or as high as £250 depending on factors including turnover, and where in the UK you are. Businesses with more employees and higher turnover will usually pay more.
Self-assessment and tax returns
An accountant will usually charge a one-off fee for handling your tax return, which can be anything from £150 to £250 and over, depending on how complex your return is. Expect higher fees for higher incomes and more sources of income.
An effective accountant should be able to save you at least some of their fee by finding tax savings for your business, as well as saving you time. In some cases, your tax bill could fall to so you can save more than just your accountant’s fee.
Other ways to pay your accountant
Many businesses like to pay their accountant in Glasgow or London a monthly fee. However, you could also choose to pay by the hour, or for individual services.
You could pay for some services with a fixed price or monthly fee but pay for other services by the hour.
An accountant who performs more basic accounting services will usually charge between £25 and £35 per hour.
More specialist services, such as tax planning and business planning could be more expensive, with a cost of £125 to £150 per hour.
Accounting fees per service
Some businesses prefer to hire an accountant on a service-by-service basis, such as for help with year-end accounting, VAT returns or payroll services.
Fees for services like business accounts and VAT returns will go up as company turnover rises. Payroll fees will be higher the more employees you have.
Remember: the fees given in this guide are intended to be for guidance. Talk to your own accountant about what services you think you need and ask them to quote their rates. Shop around and compare prices, but remember that the cheapest quote might not be the best, and the most expensive might not be the best either.
You can keep accounting costs as low as you can by maintaining good record keeping and giving your account all the information they need in good time.