How Much Does It Cost to Hire an Accountant in the UK?

Are you a small business entrepreneur and looking for an accountant in the UK? The question is: how much does an accountant cost? When balancing daily operations, taxes, and invoices, the question is a mystery.

Hiring an accountant is not a waste of money; it is a valuable investment to ensure business compliance. If you want to protect your finances, you should be aware of the true cost of hiring an accountant.

In addition to keeping your books organised, it helps you save time, avoid expensive errors, and make better decisions to expand your company.

In this article, I explained to UK small business owners the most common questions about accountants’ costs. Sole traders and limited company owners get a detailed breakdown of different service fees after reading this. Also, they know the price affecting factors and smart tips to ensure expertise at competitive prices. So, let’s read.

What is an Accountant’s Cost for a Small Business?

For hiring an accountant, the cost varies depending on your business stage, size or model, situation, and expected services. Here are the accountants’ costs for SMEs:

Sole traders, like an online boutique shop, need to pay between £60 and £150 per month for personal tax returns.
When they hire for annual accounts + tax return, the credit will increase between £150 and £250 per month.
Limited companies, such as a small manufacturing company, charge between £100 to £350 every month
Very first growing businesses and startups, like a retail chain shop with several branches, need to spend more, around £600 to £1200, depending on complexity, tax services, a strategic plan, and payroll.

These costs include financial planning, bookkeeping, self-assessment tax returns, and yearly accounts. But, for more advanced services like business management, financial analysis, and forensic audit examination, your monthly payment will increase.

When Do You Need to Hire a UK Accountant?

You can hire a small business accountant in London when you feel:

Your business grows fast, and you earn money rapidly
Confused about tax laws and compliance
Applying loan for business funding
Troublesome to handle business finance due to fast growth
Spending too much time on bookkeeping
Not having the ability to handle the business in an organised way
For operating payroll services with PAYE
Lack of consistency in day-to-day operations
For complex R&D Tax and Audits
To stay updated with HMRC

Which Key Factors Influence Accountant Fees in the UK?

Some factors affect the cost of an accountant:

Business type
What services do you need?
Your business location
Accountants’ qualifications and experience
Whether they demand a monthly or hourly rate, or a fixed fee

Accountant Pricing Choosing Factors

To select the right package, you have to know how accountants’ charges work.

Cost by different pricing models:

Different pricing-based models are:

1. Fixed Rate

Many accountants offer a package with a fixed rate that includes fixed services like bookkeeping, VAT returns, tax filings, and payroll management.

2. Hourly Rates

Some accountants charge per hour for their services. It’s ideal for a one-time task. Junior and freelance accountants’ charges are lower. While the experienced accountants take upwards.

3. Per-Task Charges

Some accountants charge per service. For different services, the charge is different. The fee can also increase or decrease depending on the accountant’s qualification.

Costs by different types of clients:

Clients’ based pricing models:

1. Sole Traders

Solo traders‘ charges are:

Less complexity, lower price
Single service like tax returns filing and bookkeeping

2. Limited Companies

Prices depend on complexity and services
Charge for corporate tax, payroll, VAT return, and quarterly reports

3. Contractors or Freelancers

Charges for accounting services and financial forecasting
Some accountants use online packages for easy

4. Startups and Small Businesses

These businesses need hybrid support
Charges are higher
Packages include software integrations

Cost by Different Regions

Sometimes costs depend on regions:

London and East London: Accounts charge more money in these regions due to the high operational costs.
North London, Wales, and Scotland: In these regions, accountants charge budget-friendly fees compared to the other regions.
Remote Accountants: Remote accountants often cost less. Not only do they cost less, but they also adjust according to your needs.

How to decrease an accountant’s cost?

Here are some strategies to cut your accountant’s expenses:

Use software like Xero, QuickBooks, and Tally to do the manual tasks.

Work with a remote/online accountant, cause they cost less.
Instead of selecting an all-in-one package, choose the bundle packages according to your needs.
Keep your paperwork organised to reduce the accountant’s work.
Avoid unnecessary services that you don’t need.

How to select the perfect accountant for your business

As you select an accountant, consider the following key factors:

Experienced accountant
Certified with ACCA/ICAEW/AAT/CIMA
Budget-friendly fee
Positive customer feedback
Effective communication and speed

Final Words

Hiring an accountant can be costly unless you are clear about your needs. While hiring an accountant, understand what you need. Exclude the unnecessary service to cut down your budget. Select the packages according to your requirements. Thus, you can spend the least amount on an accountant for your small business.

Frequently Asked Questions

How does a UK Accountant charge?

Depending on your business type, size, needs, and location, as well as the accountant’s expertise, the approach may vary. You can choose different service packages based on your needs. Another option is to pay your accountant an hourly rate.

What is the Hourly rate for an accountant in the UK?

The beginner-level accountant charges usually range from £50 to £150 per hour. On the other hand, an experienced accountant charges from £250 upwards.

Do I need an accountant for my small business in the UK?

Hiring an accountant is not mandatory. But an accountant saves your time, money, files your tax return with HMRC, and takes your business to the next level.

Is it worth getting an accountant in the UK?

Indeed. By hiring a professional accountant, you can maintain your financial accuracy, save valuable time, and cut down on overhead expenses. And take your business to the next level with expert advice.

Which accountant is best for a small business?

A qualified accountant certified by ACCA is best for your small business.