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GeneralUpdated 2026-02-12

How much does an accountant cost for a limited company?

Quick Answer

UK accountants typically charge £100-300 per month for small limited companies. Annual accounts and tax returns cost £500-1,500 on a one-off basis. AI alternatives like AccountsOS cost £20/month after a 14-day free trial.

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Detailed Explanation

Typical accountant fees for limited companies

Monthly packages (bookkeeping + accounts + tax)

- Basic: £100-150/month - Standard: £150-250/month - Premium (includes payroll, VAT, advice): £250-400/month

One-off annual services

- Annual accounts preparation: £400-800 - Corporation Tax return: £200-400 - Self Assessment: £150-300 - VAT registration: £100-200

Hourly rates

- Bookkeeper: £25-40/hour - Qualified accountant: £100-200/hour - Tax specialist: £150-300/hour

Factors affecting cost

- Location (London 20-50% higher) - Complexity of business - Number of transactions - VAT registered? - Employees? - Quality of your records

AI accounting alternatives

- AccountsOS: £20/month after 14-day free trial (all-in) - FreeAgent: £35/month - Xero: £16-65/month - QuickBooks: £10-£123/month

Note

Software gives you tools, not service. You still prepare and file. AccountsOS bridges this with AI that answers questions and guides you through compliance.

Source: Industry Average Pricing 2024/25

Real-World Examples

Early-Stage Startup

A tech startup with minimal transactions and no employees might opt for a basic monthly package at £120/month, covering essential bookkeeping and corporation tax filing, totaling £1440 annually. This allows the director to focus on securing funding and product development.

Established E-commerce Business

An e-commerce business with several employees, VAT obligations, and complex inventory would likely require a premium package at £300/month. This includes payroll management, VAT returns, and ongoing tax advice, costing £3600 per year.

Sole Director Consultancy

A consultant who primarily needs annual accounts and corporation tax return preparation might pay £600 for annual accounts and £300 for the corporation tax return, totaling £900. They can handle day-to-day bookkeeping themselves.

Common Mistakes to Avoid

  • Failing to clarify what services are included in the quoted price, leading to unexpected add-on fees later.
  • Choosing an accountant solely based on price without considering their industry expertise or the level of support offered.
  • Not comparing prices from multiple accountants to get a clear understanding of the market rate for the services you require.
  • Assuming that cheaper options always provide worse service - sometimes smaller firms or individual accountants offer competitive rates and excellent personalized service.

Are accountant fees tax deductible?

Yes, accountant fees incurred wholly and exclusively for the purposes of your limited company's trade are deductible as a business expense. This reduces your corporation tax liability.

When are accountant fees typically paid?

Monthly packages are usually paid via direct debit. One-off services are typically invoiced after completion of the work, with payment terms of 30 days. Always confirm payment terms upfront.

Do accountants charge extra for dealing with HMRC queries?

Many accountants include basic support for HMRC queries within their monthly packages. However, complex or in-depth investigations may incur additional hourly charges. Always clarify their policy on dealing with HMRC.

What happens if I want to switch accountants?

You're free to switch accountants at any time. Your new accountant will typically handle the transfer of records from your old accountant, subject to professional clearance. Check your existing contract for any termination clauses or fees.

Practical Tips

  • Request a detailed breakdown of the accountant's fees before committing to their services to avoid any hidden costs.
  • Prepare a list of your company's accounting needs (e.g., bookkeeping frequency, payroll requirements, VAT returns) to get an accurate quote from potential accountants.
  • Consider using cloud-based accounting software to streamline your bookkeeping and potentially reduce the time (and therefore cost) your accountant needs to spend on your accounts.
  • Ask for client testimonials or case studies to gauge the accountant's experience and expertise in working with businesses similar to yours.

Related Questions

Do I need an accountant for my limited company?

No, it's not a legal requirement. You can prepare and file your own accounts and tax returns. However, many directors use accountants or accounting software for compliance and tax optimization.

How do I close my limited company?

The cheapest option is voluntary strike-off (£10 fee, assets under £25,000). For larger companies, use Members' Voluntary Liquidation (MVL). Outstanding tax affairs must be settled first.

How do I register a limited company?

Register online with Companies House for £50 (usually processed same day). You need a company name, registered address, director details, and shareholder information.

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