What is the Average Cost of an Accountant in the UK

Did you know that small and medium-sized businesses in the UK that use professional accounting and bookkeeping services see an 11.5% increase in revenue on average?

That statistic highlights just how valuable good financial support can be. When you think about the cost of an accountant, it makes sense to view it as an investment rather than just another bill. An accountant can do much more than file tax returns. They can save you time, prevent mistakes, and help you make better business decisions.

In this post, we will look at the average cost of an accountant in the UK, the factors that affect pricing, and practical ways to get the best value for your money. Whether you are self-employed, running a limited company, or just getting started, this guide will help you understand what you should expect to pay.

Why Understanding the Cost of an Accountant Matters

Managing your finances properly is one of the most important parts of running a business. However, it is also one of the areas that many business owners struggle with. Hiring an accountant takes away that stress and ensures everything is done correctly.

An accountant helps you keep your financial records accurate, avoid HMRC penalties, claim all eligible expenses, and plan for tax payments. In short, they save you time and reduce risk.

The average cost will depend on whether you are a sole trader or a limited company, as well as the complexity of your finances. Understanding these costs helps you find the right accountant who provides the right level of support at a fair rate.

What Services Do You Actually Need?

Before you compare prices, think carefully about what kind of help you need.

Most small businesses and freelancers rely on an accountant for basic services such as preparing and filing Self Assessment tax returns, calculating tax and National Insurance, and keeping track of income and expenses.

However, you might also need additional support, like VAT registration, quarterly VAT returns, payroll management for staff, or advice on becoming a limited company. With Making Tax Digital (MTD) rolling out, accountants also help clients move their bookkeeping online to meet new HMRC requirements.

Some of these services are one-off tasks, while others require ongoing monthly or quarterly work. This difference in frequency will affect the overall cost of an accountant.

The Average Cost of an Accountant in the UK

So, what should you expect to pay for an accountant in 2025? While every business is different, most small business owners in the UK fall within these ranges:

Type of Business

Average Monthly Cost

Sole Trader or Freelancer

£60 – £150

Limited Company

£100 – £350+

Start-ups or Growing Businesses

Higher depending on VAT, payroll, and complexity

These average figures generally include bookkeeping, annual accounts, self-assessment, and tax return services. If you need more specialist support, such as financial forecasting or R&D tax credit claims, you can expect to pay more.

Some accountants also charge by the hour, usually between £25 and £150, depending on their experience and the service provided.

Typical Accounting Costs by Service

If you prefer to pay per service rather than signing up for a package, here is a guide to common accountant costs in the UK:

Service

Typical Cost

Self-Assessment Tax Return

£100 – £300

VAT Returns

£75 – £200

Payroll

£5–£10 per employee per payslip

Bookkeeping

£20–£50 per hour or £100–£400 per month

Annual Accounts (Limited Company)

£600 – £1,200 per year

Corporation Tax Return

£250 – £600

These are typical averages. Your actual accountant cost will depend on the complexity of your business and the quality of your records. Well-organised accounts are faster to manage, which helps reduce your overall bill.

What Affects the Cost of an Accountant?

The average accountant cost in the UK depends on several factors.

The size and structure of your business play a major role. Larger businesses with employees, suppliers, and multiple clients naturally generate more transactions and need more detailed records. A sole trader with one income stream will need much less time from their accountant than a limited company with five staff members.

Complexity is another factor. If your business has several income sources, runs payroll, or trades internationally, your accountant will need more time to handle your accounts accurately.

Your location can also affect pricing. Accountants based in London or other large cities generally charge higher fees because of their own operating costs. Many smaller or remote firms offer the same quality of service for less.

The level of support you choose makes a difference too. A one-off tax return costs less than a full monthly package that includes year-round support. However, ongoing support can save time and avoid errors later.

Finally, the use of accounting software can make a big difference. Tools such as Xero and QuickBooks help automate parts of the bookkeeping process, which allows your accountant to spend less time on manual work and, in turn, charge less.

How to Keep Your Accountant Costs Down

There are several ways to reduce the cost of an accountant without cutting corners or quality. The most effective approach is to stay organised. Keep your invoices, receipts, and bank statements tidy and easy to access. The more you do yourself, the less your accountant has to untangle later.

Submitting your records on time is another easy win. Accountants often charge more if they have to work against a tight deadline. Being proactive saves you money and stress.

Keeping your business and personal spending separate will also make bookkeeping simpler and cheaper. It prevents confusion when your accountant is reviewing transactions.

Using accounting software is another smart move. It automates many daily tasks, keeps your records accurate, and saves your accountant time when preparing returns.

Finally, stay in regular contact with your accountant. Ask questions before making big financial decisions. Good communication will help you avoid unexpected costs or compliance issues.

Are Online Accountants Cheaper?

Many modern accountants now work online, offering clear, fixed monthly fees and digital bookkeeping systems. Online accountants can be more affordable because they have lower running costs and use software to manage your data efficiently.

This type of service is ideal if you are confident working digitally and do not need face-to-face meetings. However, if you prefer personal contact or have a complex business, a local accountant might be better. The key is to find a balance between price, accessibility, and support.

Can an Accountant Save You Money?

Hiring an accountant is not only about compliance. It can actually save you money in the long run.

A good accountant can help you identify all allowable business expenses, avoid HMRC fines for late or inaccurate submissions, and improve tax efficiency through careful planning. They can also advise on the best time to register for VAT and prepare for future tax bills so you are never caught off guard.

In short, the cost of an accountant is often outweighed by the financial benefits they provide. Their expertise gives you peace of mind and helps you make informed decisions about your business.

When Are You Paying Too Much?

It is worth reviewing your costs from time to time to make sure you are not paying more than you should. If you are charged over £1,000 a year for simple accounts, or if your accountant does not clearly explain their fees, you might be overpaying.

You should also question charges for minor queries or basic advice that should already be included in your package. A transparent accountant will always provide a detailed breakdown of what their service covers and offer clear communication about costs.

If you are unsure, compare quotes from a few different firms. The goal is not to find the cheapest option, but one that delivers good service and value for money.

Understanding the Average Cost of an Accountant

In conclusion, the average cost of an accountant in the UK depends on your business type and the level of support you need. Sole traders typically spend between £60 and £150 per month, while limited companies usually pay £100 to £350 or more for ongoing help with bookkeeping, payroll, VAT, and tax returns.

The most important thing is to find an accountant who provides real value. A good accountant will not only complete your paperwork correctly but will also help you plan ahead, manage your cash flow, and grow your business.

If you are ready to make your finances simpler and more efficient, contact Prosper Accountancy today. Our experienced team can help you choose the right package for your business, keep your accounts running smoothly, and give you confidence that your finances are in safe hands.