If you go into a car showroom, point at a car, and say to the salesman “How much is it?”, his reaction is usually to grab a pre-printed form, take some basic details from you, and then start filing in the tick boxes: “Manual or automatic?”, “Alloy wheels?”, “Metallic paint?”, and so on and so forth. Each reply you give affects the price. Everyone understands that. So why do I have people regularly ringing me up and asking “How much do you charge for a set of accounts?” When I start to say something like “It all depends on the size of your business and what you want…”, the usual reaction is for them to put the phone down.
Let’s get things clear from the start: THERE IS NO SET FEE FOR PREPARING A SET OF ACCOUNTS OR A TAX RETURN - IT ALL DEPENDS ON THE VARIABLES!
The major factors that affect the price of a set of accounts are:
The firm of accountants you are using
As we say on our strap line, not all accountants are the same. There is no requirement for a person or a firm offering accountancy and taxation services to be qualified in any shape or form, whether by experience or by examination. Anyone can set themselves up in business as an accountant.
Broadly speaking, firms of accountants fall into three categories: fully qualified accountants that are regulated by a CCAB body, qualified accountants that are not regulated by a CCAB body, and unqualified accountants.
CCAB is shorthand for “the Consultative Committee of Accountancy Bodies” and consists of the five principal chartered accountancy bodies (the Institute of Chartered Accountants in England & Wales (ICAEW), the Institute of Chartered Accountants in Scotland (ICAS), the Institute of Chartered Accountants in Ireland (CAI), the Association of Chartered Certified Accountants (ACCA) and the Chartered Institute of Public Finance and Accountancy (CIPFA).
It is often a trade off between security and cost. If you’re happy to take the risk of using a cheap unqualified accountant who does not have any accountancy qualifications, does not belong to a professional accounting body, has not passed any examinations, does not have any accounting or tax experience, does not have any professional indemnity insurance and does not have a valid complaints procedure or route for you to complain to a regulatory body, then you should do so. Otherwise always ask for evidence of professional qualifications. If you see ICAEW/ICAS/CAI, ACCA or CIPFA somewhere on the accountants’ website then all is well. On the other hand, be careful about using an accountant who is part of one of the national franchises, such as TaxAssist or AIMS.
The scope of the work you need doing
Like with the spec for a car, the scope of the work you require will affect the price. Are you a £30,000 business or a £300,000 one? Do you want monthly or quarterly reporting? Do you want to include payroll? Is the payroll weekly, four weekly or monthly? Is there a workplace pension scheme in place? Do you need additional services such as budgeting and cash flow forecasting?
This is why most accountants will want to hold what is often called a “discovery meeting” to flesh out the scope of the accountancy and other work to be done for the potential client. This is an important part of the fee setting process and not just the accountant being precious, as some potential clients seem to think. Work done at this stage will lead to a more accurate initial fee proposal and avoid the accountant having to increase his fee after, say, six months because important aspects of the work were not discussed at the outset.
The current state of your books and records
When I was an articled clerk (called a trainee accountant today) back in the early 1970’s, it was not unusual for a client to bring in a plastic bag or cardboard box full of assorted bank statements, invoices and receipts, sometimes neatly in order, sometimes distinctly not. And if it was a fish merchant off the Hull Fish Docks, then there could be fish scales, fish blood and God know what all over the paperwork.
This is not acceptable today. Not only do paper records mean additional work for accountants and their staff, but there is a real and present health danger from handling paper records that have been handled by other people.
As a consequence most accountants nowadays try to insist that as a minimum accounting information is provided as scanned documents. Preferably it should be summarised on a spreadsheet or, even better, have been entered into a cloud accounting app such as Xero.
Most accountants will “load” their fee to reflect the state of the accounting records. Paper records, even if they are accepted at all, will incur a weighting of 2 or 3 times the normal accounts preparation fee to reflect the additional work they cause accountants and their staff.
There is no need for things to be like this. In our e-book Your Business Now And In The Future we suggest the basic cloud accounting system that in our opinion most businesses should be aiming for in a post pandemic landscape.
Annual accounts and corporation tax return for a company with annual turnover (i.e. sales) of £30k to £70k - from £102.00 a month
Annual accounts and corporation tax return for a company with annual turnover (i.e. sales) of £250k to £500k - from £176.26 a month
A company director's 2022/23 tax return - from £32.00 a month
Monthly management accounts for a company with annual turnover of £125k to £250k - from £130.40 a month
Monthly budgets and financial forecasts for a company with annual turnover of £500k to £750k - from £201.31 a month
Virtual Finance Director services for a company with annual turnover of £250k to £500k - from £414.72 a month
Personal Tax Return from £295.00 a year
Company Formations from £345.00 one-off cost
The next step
If you have any questions about our fees please do not hesitate to contact us, either by phone or by email. We look forward to hearing from you.