With the UK firmly in the digital age and dozens of tax and accounting software programs available, are accountants a thing of the past or will they still be relevant in 2019 and beyond?
How much do accountants charge for their services and are they good value for money?
If you’re looking for answers to these questions, keep reading.
On this page, we’ll look at:
- The different services offered by accountants
- How accountants charge their fees
- Typical charges, based on our research in 2021
- Should you go local or use an accountant based further away, where they may charge less?
- Can you really save money by using an accountant?
- 10 questions to ask your accountant
- Where to get a quote for the services you require
Services Typically Offered by Accountants
If you are just setting up your business, perhaps for contracting purposes, there are certain essential tasks which your accountant can help you with, such as:
- Making sure your company is incorporated with Companies House.
- Registering your company to pay the relevant taxes, such as Corporation Tax and VAT (if you’re registered for VAT), plus PAYE and National Insurance.
- Opening a bank account for your business.
- Establishing a system for you to submit accounting/expense information.
Once things are up and running, accountants can provide many more services to keep your business running smoothly.
- Dealing with any necessary correspondence with bodies like HMRC and Companies House.
- Running monthly payroll and submitting data to HMRC.
- Providing monthly payslips and carrying out monthly bookkeeping.
- Completing annual accounts and submitting quarterly VAT returns.
- Completing your annual corporation tax return. answering your tax queries, and, if necessary, advising on dividend planning
On top of these standard services, there are other things accountants can assist with, although they may charge extra for these.
- Reviewing your employment status if you are a contractor.
- Completing your personal tax return.
- Providing a separate office address for your company.
- Offering financial services such as pensions advice
How Accountants Charge Their Fees
Accountants usually offer two price structures:
- The monthly services
- One-off service
This is the method most commonly used for small businesses. A set of standard services, similar to those listed in the first two sections above, will be provided in return for a set monthly fee. This fee will vary according to the services included and the pricing structure of the accountancy firm. It will typically incorporate an allowance for queries and correspondence based on the firm’s past experience.
Accountants will normally quote a fee which excludes any allowance for problems caused by their clients, so it will be stated as reliant upon well kept records and timely communication, and is likely to increase if they are asked to work on nearly-due or overdue accounts. There will be different scales of fees for different types of client company.
Although a monthly service charge is usually applied, there will still be a number of additional services which will be charged for separately. Services such as bookkeeping and financial advice will typically come into this category, as they are not an essential part of the accountant’s work, and not every client will want them.
Extra charges will also be applied for very urgent work. In theory, all services could be charged according to the exact time spent, but the extra effort and time required to bill in this way would mean that this would be unlikely to benefit either accountant or client.
Accountants Fees and Charges in 2020/21
|Payroll - up to 5 employees||£20 inc VAT per payment cycle|
|Payroll - up to 10 employees||£40 inc VAT per payment cycle|
|VAT Submission||£100 inc VAT per quarter|
|Personal Tax Return - sole trader||£180 inc VAT|
|Personal Tax Return - Director or Partner||£275 inc VAT|
|Bookkeeping||£15 - £30 inc VAT per hour|
Go Local or Should You Consider Someone Further Afield?
More and more services are being provided online, so why should accountancy be any different?
When searching for an accountant for your small business, you will find two main options: small local accountancy firms, and possibly larger firms that only maintain an online presence.
The advantages of choosing a local firm are the same ones which have supported the profession for many years: you will get a professional service, combined with personal attention when required. If you have a problem, you can arrange a face to face meeting at which your accountant can help you to find the best solution. In addition, it is likely that the accountant will be a specialist in working with certain types of business, so you should be able to find one who understands the issues which might arise in yours.
Given all of this, why should you select an online-only firm?
The main advantage of these firms is the price. They do not need to rent offices, pay receptionists, or incur any of the related overheads, so they can charge as little as half of what a local firm might ask you to pay. They will usually offer a comparable range of services, and will generally use Cloud accounting software, a basic version of which is often provided with their full service packages. Their accountants will be contactable by phone or e-mail if necessary.
The decision for you to make is whether you want to pay extra for the face to face contact and possibly specialist advice offered by a local firm, or would prefer to save money by dealing with your accountant online.
Can You Really Save Money by Using an Accountant?
There are several ways in which an accountant can save your business money.
The most obvious is by dealing far more efficiently than you could with your accounting and tax issues, thus saving you a significant amount of time which you can then use to make money doing what you are best at.
Other more specific savings include:
– helping you to make a tax-efficient business plan, and making sure you don’t get fined for missing deadlines
– acting as advisors to help you grow your business
– predicting and managing cashflows to avoid any need for costly loans
– making sure that you don’t make administrative errors that could result in fines
10 Questions to Ask Your Accountant
1. What are the professional qualifications of the person who will be overseeing your accounts? Chartered Accountants have to undergo several years of training, are monitored by a professional body, and are required to undertake continuing professional development. Appointing someone without this level of qualification would be risky.
2. What are their specialisms? Firms will often specialise in dealing with particular industries or professions, and this will give them the knowledge to provide an efficient service and helpful advice. Look for a firm with experience in your field.
3. How many other clients do they have? The more clients each partner has to deal with, the less ‘personal’ the service is likely to be.
4. What precisely is included for the monthly cost you are being asked to pay? Different firms will offer different standard services, and the offering from online firms may not include all of the same things. Make sure that you know what you are getting.
5. What accounting system do they use? Find out what you can about its efficiency and user-friendliness. If you are dealing with a small local firm, ensure that they are making appropriate use of the latest technology.
6. Can you speak to another of their clients? If possible, this will enable you to gauge the efficiency of their service.
7. Do they deal only with small businesses, or do they have a range of clients? If the former, you may need to leave them in favour of another firm with more experience if your business grows.
8. Do they offer financial advice? This may be useful if available, although you will also want to verify their independence and the levels of commission they charge.
9. What level of pensions knowledge do they have? Pensions can be a complex field, and not all accountants are well placed to advise on it.
10. Can they provide an office address for your company? Not all online accountants may wish to do this.
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