How Much Does an Accountant Cost?

For small to medium-sized businesses, hiring an accountant takes away a lot of undue hassle. In fact, 91% of SMBs rate accountants as important to their business, and half of them go to their accountant for strategic business advice. The upcoming tax year runs from April 6th 2024 to April 5th 2025, and with April coming up very soon, now is the perfect time to consider hiring an accountant or switching to a new service.

Our latest research into the market shows that business accounting services can cost anywhere from £60 to £450 a month, depending on the size of your business. Hourly rates and prices for one-off services such as VAT returns and payroll can vary.

In this article, we take a closer look at some of these costs, and recommend what to look for when shopping around for accounting services. If you’d like to find out exactly how much accounting services will cost for you, try our free quote-finding tool. Just give us a few brief details about your business, and we’ll do the rest, matching you up with trusted accounting firms that can meet your needs. You’ll then receive tailored, no-obligation quotes, so you can compare and save.

What services do accountants provide?

Accountants typically offer a range of services including:

• Annual accounts and tax return
• Director’s tax returns
• VAT returns
• General bookkeeping
• Payroll services
• Bank reconciliation
• Accounts payable/receivable
• Day to day financial and tax advice

The services a business needs will depend on its size and business structure. The above services will typically be included in most accounting packages for businesses.

The best accountants for businesses will be able to save you money, as they can give you advice about business planning and long-term plans with their insight into your business. Your accountant will also prevent your business from facing fines or penalties for misfiling or missing deadlines. The money you spend on outsourcing your accounting will often be much less than the cost of facing fines, or making mistakes on your books.

How much do accountants cost?

More comprehensive accounting can cost around £60 to £450 per month, depending on the size of your business. For large businesses, this number will be higher (around £600) as they have a higher number of employees and a bigger turnover – factors that can impact the cost of your accounting.

Accountants can be paid annually, monthly, or hourly, depending on the number and type of accounting services you need from them. If you need regular accountancy services and advice, you can opt for a package, which you pay for monthly or annually.

How much do accounting services cost?

You may opt to use an accountant for one-off services instead of paying them for a monthly package of services. In this case you will be paying the accountant by the hour. In general, one-off accounting will cost around £25 to £35 an hour, and more specialist accounting costs around £125 to £150 an hour. 

There’s a few different services small to medium size businesses usually avail of, such as self assessments, tax returns, payroll services or VAT returns. Here’s the general price of each of these services. 

• A one-off assessment or tax return can cost around £300. The more complex the tax return, the higher the accountant may charge. 

• A VAT return can cost between £100 and £300, depending on the size of the business. 

• Maintaining business accountants can set you back anywhere from £150 to £600, depending on annual turnover. 

• Payroll services for a business of 10 to 50 employees can cost £200 a month. 

• Director’s tax returns cost around £300.

All the above prices exclude VAT. 

These costs are one-off fees for businesses. However, if you opt for a package with an accountancy firm that includes all these services, it may be more beneficial.

If you run a start-up or small business, you may not need regular accountancy services. But as your business grows, your tax and accountancy needs will grow too, and become more complicated. You can then choose to scale up to a regular monthly package.

What are the factors affecting how much accountants charge?

There are a few factors that will impact how much your accounting services cost, including:

The size of your business

This is determined by your annual turnover. The higher this is, the more you can expect to pay – after all, the tax and accounting workload placed on your accountant will be higher. For example, the cost of maintaining your business accounts depends on your monthly turnover.

Being a limited company

If you’re registered as a sole trader, your accounting costs will be lower than those of a limited company. Limited companies have more complex needs and have to comply with harsher accounting rules. Bookkeeping is much more stringent and comprehensive, so the cost may be higher.

Limited companies will also need other services, such as tax accounting.

One-off or continuous service

In the long run, hiring an accountant on a monthly basis will work out cheaper and many different services will be included in the one package. Accountants working for you on a regular basis will also be able to discover areas you can save money, as opposed to a one-off basis where they won’t be able to spot these kinds of things.

Can you get accounting services for free?

The short answer is yes. You can access accounting services for free through DIY methods, or free software. Cloud-based software has evolved to produce efficient and helpful tools to assist you with services such as bookkeeping and payroll.

Free payroll software

Payroll can be complex, but software can make the process a lot easier with reporting and automations. You can access free payroll software when you have relatively few employees. However as your business grows and your employee numbers increase, there will usually be a cost attached.

Cloud-based accounting software reduces operating software by up to 50%. It’s a good idea to stick to cloud-based software as it will keep your costs down.

DIY accounting

DIY accounting can be complicated, but it’s suitable if you’re a start-up or a very small business. It’s important to open up a business bank account so you can accurately separate your personal and business records to make things easier to document.

You also want to develop a bookkeeping system – this can be done using a spreadsheet or accounting software. When doing your own books, you want to ensure you keep track of every expense, and choose the right accounting method for your business.

There are two methods you can choose from: the first is traditional accounting, which records income and expenses on the date of the invoice. The second is cash accounting, which records income and expenses on the date it’s received or the money is paid. Cash accounting is only available if your turnover is less than £83,000 per year. If this is your business, cash accounting is a better option, as it means there’s less chance your business has to pay tax on money it has not yet received.

When DIY accounting, you want to generate monthly reports that show a profit and loss statement and a balance sheet, so you can accurately track the financial health of your business.

As your business grows and develops, it may be difficult to stay on top of your accounting yourself, and outsourcing may be your best option. Staying compliant is vital, and the bigger your business is the harder it can be to manage, especially without any specialised advice.

Need Help Finding an Accountant?

Our free quote comparison tool matches you up with accounting firms that are suited to your business. Just give us a few brief details about your company, and you’ll be contacted by these trusted firms with tailored, no-obligation quotes and answers to your questions.