Accountant Fees in the UK: What Should a Small Business Expect to Pay?

---

To give an immediate benchmark: for a standard UK small business or sole trader, professional accounting fees typically range from £40 to over £150 per month. For a sole trader with low volume, you can expect to pay around £40 per month. As a business grows into a limited company or becomes VAT-registered, fees usually scale to £60–£100+ per month. Specialist forensic work or “rescue” services for fixing historical errors usually command a higher hourly rate, often around £80+ per hour.

---

The Death of the “Once-a-Year” Tax Return

For decades, many small businesses operated on a “shoe-box” method: they would hand a pile of receipts to an accountant once a year, pay a one-off fee, and file a tax return.

This era is ending. Under HMRC’s Making Tax Digital (MTD) initiative, the government is moving toward a fully digital tax system. This change makes monthly or quarterly digital bookkeeping a legal necessity rather than an optional extra.

Because MTD requires digital records and more frequent updates to HMRC, the traditional “once-a-year” fee is being replaced by monthly subscriptions. While this feels like a regular cost, it prevents businesses from being hit with massive, unexpected tax bills and ensures you stay compliant with the law year-round.

What Determines the Cost?

Accountancy fees in the UK are generally based on three factors:

1. Business Structure: Sole traders generally pay less because their tax filings are simpler than Limited Companies.
2. Transaction Volume: The more invoices and receipts you have, the more time it takes to process the data.
3. VAT Status: If you are VAT-registered, your accountant has to file four extra returns a year, which increases the price.

Typical Monthly Pricing Tiers

Based on current UK market standards, here is how the costs usually break down:

Business Type	Estimated Monthly Fee	What is usually included?
Sole Trader / Side Hustle	£40	Basic bookkeeping, annual self-assessment, and software access.
Active Small Business	£60	Regular bookkeeping, year-end accounts, and tax advice.
VAT-Registered / High Volume	£100+	Quarterly VAT returns, more complex payroll, and frequent support.

---

---

Value vs. Cost: Why Pay Monthly?

The shift to monthly fees isn’t just about MTD compliance; it’s about moving from reactive to proactive support. A monthly service typically includes:

• Real-time Bookkeeping: Using mobile apps to snap receipts and send invoices instantly, keeping your records tidy.
• Consistent Oversight: Instead of waiting until April to find out you owe thousands in tax, you know your position every month.
• No Hidden Extras: Most modern accountants include your year-end tax return and regular advice within the monthly fee, so there are no “surprise” invoices.

Specialist Fees: Fixing the “Financial Mess”

Sometimes a business needs more than just standard filing. If you have missing National Insurance credits affecting your State Pension, or if a previous “DIY” company closure went wrong at Companies House, you will likely require specialist Resolution and Recovery services.

Because these cases involve forensic bookkeeping (reconstructing years of lost data) or legal corrections, they are rarely covered by a standard monthly fee. In the UK, specialists typically review the situation and provide a fixed-fee proposal or work at an hourly rate of approximately £80+ to ensure the “mess” is fully cleared with HMRC.

Summary

The “cheapest” accountant is often the one who only speaks to you once a year—but in the new world of Making Tax Digital, that approach can lead to penalties and stress. By budgeting for a transparent monthly fee, you ensure your business is compliant, organised, and ready for the future of UK tax.

---