How Much Does An Accountant Cost?

Many of you already have an Accountant and others will be thinking of appointing one, but are worried about the cost.

Unfortunately, it isn’t as simple as getting a quote for having your boiler serviced as a number of factors directly affect the amount of work needed, and hence the cost.

At the lowest end of the fee structure, are those individuals who only need to complete a Tax Return because they are higher rate taxpayers with P11D benefits or are retired with multiple income streams (pensions, savings, dividends etc)

For people in this category, the cost can be as little as £100+VAT for the year.

People running a business will also need a set of Annual Accounts, whether you’re a sole trader, partnership, LLP or Limited Company, which clearly involves more work by the Accountant and more cost.

It will also depend on a number of other factors, which include:-

1. What sort of accounting records you keep and the quality of your bookkeeping
2. The type and complexity of your business
3. The turnover and the numbers of individual transactions
4. Whether or not you are VAT registered
5. Whether or not you have employees and are operating a payroll scheme
6. What services you need. For example, will you need your VAT Return completing or your PAYE prepared
7. Whether or not you need email and telephone support throughout the year

Most Accountants tend to charge an hourly rate, sometimes factoring for the complexity of the work involved, however this means you have no clear idea what the overall cost will be for the year, which makes it difficult to budget. This method of charging places all the risk on the client. A much better way is a fixed price for the year, which your Accountant should be able to offer.

Richard Adams of Pure Accountants Ltd, has recently blogged that his firm will charge “around £500 per annum for a sole trader set of accounts and around £1,500 per annum for limited companies. Good accountants can cost less but I’d be wary of anyone who seems too cheap”.

I’m not picking on Pure Accountants, who may well give excellent value for their charges, however to charge £500+VAT for a simple one-man or one-woman business, operating under the VAT threshold, with no employees, strikes me as somewhat over the top. It gets even worse for the same size of business operating as a Limited Company, whilst there is more work involved with a Company, £1,500+VAT, appears excessive. The problem is that many Accountancy practices, especially the bigger ones, tend to use scare tactics to justify their fees and what they are really saying is pay our high charges because if you don’t, you will get a second rate service.

This of course is untrue and the simple truth of the matter is that small to medium Accountancy practices are usually regionally based, tend to have lower overheads, a much greater local knowledge, closer contact with their clients and tailor their services to exactly what their clients’ need. As a result this type of Accountant can charge significantly lower fees than the big boys, whilst usually providing a significantly better service.

One final tip, speak to your family and friends who already have an Accountant and ask them about the quality of service they are receiving and the cost, before picking up the Yellow Pages or searching on the internet.

At Morgan Jones & Co, over 80% of our new clients come from recommendations and every year since the firm was founded in 1986, our client base has increased. We offer a free initial consultation and of course fixed fees, so why not contact us for a quotation.