The average cost of accountant services has decreased as the number of accountants has expanded and online bookkeeping has become a way of life for many entrepreneurs. Accountant fees vary, but when you examine the average cost of an accountant for small businesses, the fees you pay will be partially or entirely covered by the taxes they will save you.
What is the hourly rate for an accountant? They don't usually charge by the hour, but rather by what they perform for you. So, how much do accountants charge? It is determined on the sort of service required. What is the cost of hiring an accountant? Most of them do not require a sign-up fee, but they do charge a monthly fee.
What exactly are accountants there to do? That is best summarised in two sentences:
- They are responsible for ensuring that you submit the correct figures to HMRC and Companies House on time.
- They understand the intricacies of the 17,000 pages of UK tax legislation, and what they do is look through your expenses with a forensic eye, pinpointing every place where you may save money.
They ensure that you pay no more tax than necessary by ensuring that you take advantage of all available allowances and exemptions.
For example, did you know that if you're a company director, you can give yourself non-monetary presents of up to £50 as many times as you want as long as the total amount you spend on yourself doesn't reach £300? Many folks do not.
Your accountant does, and this accomplishes two things. He or she can enter that £300 in presents into your company's costs column, reducing your profits by £300 and saving you 19% in corporation tax (£57). If you're a higher-rate taxpayer, this also implies you haven't paid yourself the £300, which means you won't have to pay 40% of it in tax (£120). Your accountant has saved you and your firm £177 in tax by completing just one thing.
And that's only the start. Because it is so difficult, VAT is one of those taxes that most firms overpay. When businesses outsource their accounting to an accountant instead of handling it themselves, they can save thousands of pounds per year.
You can't go wrong with a good accountant who understands you and your business.
Click the button below, and we'll put you in touch with three or four local accountants whom hundreds of firms in your area entrust with their business and personal taxes. They'll each provide you an estimate and a detailed breakdown of their services tailored to your specific needs. There is no commitment to use any of them as your accountant, and our service is completely free of charge.
What is the cost of hiring an accountant?
Accountant fees vary depending on the services you require.
Accountants typically handle the tax affairs of the following individuals:
- Limited firms and their directors,
- sole traders and partnerships,
- landlords (residential and commercial),
- contractors and freelancers,
and Each group will require various services, resulting in varying rates.
Furthermore, the greater your fees are going to be, the larger your company is in terms of turnover and the number of transactions it processes.
What is the hourly rate for an accountant?
Contrary to popular assumption, most accountants charge by the work rather than the hour.
The way it works is as follows. You meet with an accountant who will learn everything they can about you and your firm. They will be able to inform you exactly what services you require based on this interaction.
They will then provide you with a yearly rate. Every job they've promised to do for you will be included in this annual charge. Most accountants will typically add a bit of wiggle room to the top of this amount as well?
Why would you then add services to my bill that I haven't committed to?
HMRC may conduct several inquiries into you and your tax affairs during the course of a year, particularly if you run a limited company or have a property portfolio.
When you hire an accountant, you agree to allow them act as your “tax agent,” which means that HMRC will contact your accountant first before approaching you with any questions. It's one of the numerous unseen tasks that accountants must perform for their clients but stay quiet about since they don't want to frighten or worry them. An accountant sees his or her job as taking care of all of that for you so you can focus on what you do best: operating your business.
You now have a total for your annual fees. Most accountants will then set up a direct debit from you in order to collect a monthly fee. That means you won't be slapped with a large charge, and they'll be pleased because they'll have consistent and predictable cashflow every month.
So, what are some of the regular charges that they consider when calculating their annual fee?
Fees for contractors and freelancers can range from £50 to £150 each month, and this includes getting your accounts done, completing your VAT forms, Self Assessment forms, accounting, payroll, end-of-year.
Fees for a sole trader or a business partnership that is not incorporated (that is, a limited company) can range between £30 and £130 per month and cover the same services described above for contractors with the exception of filing with Companies House (sole traders and partnerships do not send their accounts to Companies House).