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How much does a Tax Accountant cost in 2024?

The average cost of a tax accountant is
£150 - £600

for small UK businesses in 2024.

Want to hire an accountant to help you prepare your taxes? Read our handy guide to find out how much your tax specialist will charge for their services.

Struggling to make sense of tax preparation costs in the UK? For entrepreneurs, small businesses, and freelancers, navigating the world of tax can be as daunting as running a marathon. And hiring a tax preparation specialist isn't just about finding someone who can crunch numbers – it's ensuring the cost aligns with your budget while delivering the expertise you need.

(Already looking for an accountant who can help you? Find a brilliant tax preparation specialist on Bark.)

What is Tax Preparation?

Tax accountants

If you earn at least £1,000 a year from any self-employment ventures, then you’ll need to declare this to HMRC by completing a tax return.

Tax preparation involves collecting all of the information that will be used to determine how much tax you are liable to pay, plus other expenses such as national insurance or student loan contributions if applicable. 

Those who work in tax preparation are qualified accountants. You might also call them 'tax accountants'. They’ll help you create a record of your expenses, which not only helps you keep track of your business, but will ensure the final amount you pay to HMRC is accurate. An accountant may also be able to help you with your tax return, but a tax preparation specialist usually has more experience in this specific field.

How Much Does Tax Preparation Cost? 

Picture this: you’re a small business owner, and the UK tax return deadline rolls around. You need to be prepared – not just to part with your hard-earned cash but also to pay for help in navigating the labyrinthine world of tax law. The good news? Hiring a tax specialist doesn’t have to break the bank, nor should it mean settling for less than stellar expertise.

Hourly Rates for Tax Preparation

On an hourly basis, tax preparation specialists, also known as tax accountants, can charge anywhere from £70 to £150 per hour. But before you gulp and think about doing your taxes on your own, remember that the seemingly high rate is often reflective of the detailed attention your financials will receive.

Daily Rates for Tax Preparation

For a day's work, you're looking at anything from £500 to £1,000. This includes a comprehensive service, usually for businesses that have multiple streams of income or a range of corporate entities that need to be consolidated for filing purposes.

Project Rates for Tax Preparation

The cost of tax preparation generally ranges between £150 and £300 for freelancers or sole traders. But if you’re a larger company, a UK landlord, declaring or capital gains, then the price of tax preparation will be on the higher end of the scale.

Average cost of Tax Preparation
Average cost£250
Minimum cost£150
Maximum cost£600

Tax Accountancy Costs for Larger Businesses

Happy tax specialist

Complex year-end financials might require project-based fees, which can vary greatly depending on the scope of the work. A thorough tax audit could set you back between £800 to £3,000+, which involves a complete overhaul of your financial records and tax strategy for the year. We'll look into it more below.

While the cost of hiring an accountant may seem expensive, compared with preparing and completing your own tax return it will save you a lot of time and hassle. Plus, given it’s so easy to make mistakes, it’s always worth having a professional take care of it for you. 

Given one of the goals of tax preparation is also to look for exemptions, you will likely find that the investment will actually save you money overall. 

Factors that Affect the Cost of Tax Preparation

Understanding why tax preparation services vary is crucial. Location and your accountant's experience are two sides of the same coin when addressing cost. Here’s how:

Location Matters

The place you do business in isn't just about real estate; it's about tax brackets and regulations. In London, where the cost of living is high and financial services are a dime a dozen, tax preparation specialists might charge a premium. Expect fees to be about 25% higher in major financial centers compared to other cities and towns.

Here's an example: the cheapest location across the board is the North East, averaging at £150. This increases to £250 in London.

Average cost of Tax Preparation by Location
LocationAverage tax accountant cost
Midlands£200
London£250
North East£150
North West£175
South West£225

Experience of the Accountant

The more seasoned your tax professional, the more they can command. A recent graduate from an accounting programme will charge less than a chartered accountant with decades of experience and a portfolio of satisfied clients. On average, fees can shift by as much as 30% due to experience alone.

Complexity of Your Tax Situation

More accounting

Simply put, the more moving parts in your finances, the higher the fee. If you’re juggling multiple self-employment gigs, have a slew of investment properties, or are swallowing the bitter pill of capital gains tax, expect your bill to reflect the workload.

Business Type

Your business type will impact the cost of tax preparation because ultimately it will determine how complex your financial affairs are. For example, if you’re self-employed, working out what you owe is going to be a lot more straightforward versus a company with 250 employees.

As you might expect, those who are employed and self-employed, or solely self-employed will pay the least, starting at around £150 on average. It may only take a few hours (or less) to prepare your accounts, especially if you’ve kept a good record of your income and expenses. 

On the other end of the scale, large businesses can pay anywhere up to £20,000 for tax preparation. Though, such businesses may benefit from a package with their accountant instead, which will reduce costs overall.

Tax Preparation cost by type of business
Type of businessHighest average priceLowest average price
Employed and self-employed£200£150
Self-employed£300£175
Limited company£600£350
Small business (under 50 employees)£1,000£650
Medium-sized business (50 to 249 employees)£10,000£5,000
Large business (above 250 employees)£20,000£10,000

The more aspects your tax return has to incorporate, the more costly the preparation will be. So even if you’re self-employed, if your income is extremely complex (especially if it involves foreign income) then the cost of tax preparation will likely be higher. 

Income Level

Every country has different income bands, which will determine how much tax a person needs to pay. Generally speaking, if you’re on a lower income your tax preparation will be easier to complete, therefore cheaper. 

As you hit the top tax bands, there are a lot more sections to complete and aspects to consider. Plus, you’ll want your accountant to make sure they are saving you as much money as possible, which will take extra time. 

Quality of Bookkeeping

If you want to save time, money and hassle with your tax preparation, don’t turn up to your accountant’s office and empty a bag of receipts on their desk! You must keep a good record of every penny that comes into your business and leaves it. 

Consider hiring a bookkeeper if you don’t have time to do this yourself, as ultimately it will impact your tax preparation. Your accountant needs a good overview of the state of your finances, which can’t happen without diligent record-keeping. 

Additional Services

Accountants offer a wide range of services from business forecasting to estate planning. You may wish to have tax preparation included as a package or add in other services as you need them. Or, some services may be added on that are essential for the proper completion of your tax preparation if applicable. All of which will affect the total cost. 

Time

Accountants don’t typically charge by the hour anymore, though the amount of time your tax preparation will take will be factored into their quote. Complex financial affairs will require more time to sort through, therefore those individuals can expect to pay more for tax preparation. 

The Cost of Online vs. In-Person Tax Specialists

Accounting

Convenience comes at a price. If you opt for a traditional in-person tax specialist, you’re paying for their office rent and the time it takes for them to travel. An online tax service, while taking location-based costs out of the equation, often simplifies their service offerings, leaving you with more basic assistance for a lower average fee of £100 to £300.

Specific Types of Tax Preparation and Their Prices

Different types of tax preparation react to different financial elements. Here’s how these nuances can affect the bottom line.

Sole Trader and Self-Employed

The self-employed and sole traders often boast the simplest tax scenarios, entailing a relatively straightforward process that hovers around the £100 to £250 range. This covers income tax, National Insurance, and any relevant self-assessment issues.

Corporation Tax

For businesses incorporated under UK law, which is mandatory for limited companies, preparation costs can rise. The average range here is £300 to £600, taking into account more detailed financial reporting and tax implications of company profit.

Complex Tax Situations

Investment income, rental properties, and capital gains can imprint complexity on tax filings. In these cases, be prepared to pay a premium. Tax accountants may charge up to £400 for simpler investment portfolios and up to £1,200 for more extensive ones.

How to Save Money on Your Tax Preparation Specialist

Just because your finances need a thorough once-over doesn’t mean your savings account has to take a hit. There are smart ways to trim this bill.

Be Organized

Before you pass the baton to a tax professional, make their job easier – and cheaper – by organizing your financial documents. The less time your accountant spends digging through receipts, the lower your fee.

Understand What You Need

Don’t overpay for services you don’t need. If your self-assessment is straightforward, don’t feel obligated to engage a high-powered tax wizard.

Seek Out Referrals

While not the final word on worth, a referral is like a LinkedIn endorsement for an accountant. It often equates to a fair price for good service.

Choosing a Personal Tax Accountant on Your Budget

Doing the tax again

At the end of the fiscal year, the cost of a tax preparation specialist in the UK might feel like another tax – a hefty burden. But approach this investment mindfully, and it becomes an asset that can save you time, stress, and potentially, money. Remember that like with any professional service, you get what you pay for. Here are some parting tips on navigating cost versus value:

Analyze the Services Offered

Ensure the services offered align with your business needs. Unbundling services or opting for a more comprehensive package can help your budget.

Negotiate

Like everything, the cost of accounting services is negotiable. Don’t shy away from the money talk – sometimes a simple inquiry can land you a discount or an adjusted package that fits your needs and wallet perfectly.

Age of Digitalization

Today’s tax landscape is rich with digital tools and online services. Consider if a hybrid approach, where only certain aspects of tax preparation require the specialist's insights, could cut costs without compromising on quality.

In the end, navigating the cost of a tax preparation specialist is about more than the monetary value; it’s about placing a fair price on expertise and time. By understanding the rates, factors influencing costs, and the value of a tax professional’s service, you’re taking a step towards a more secure, informed financial future. Remember, those who attempt the tax tango without guidance might end up paying more – in both money and stress.

Find the best professional for the job on Bark today. 

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