Every January, millions of people across the UK face the same dilemma: tackle their tax return alone or hire an accountant to handle it. For many, the decision comes down to cost. But here’s the problem—accountant fees vary wildly, and there’s surprisingly little transparency around what you should actually expect to pay.
Some accountants charge £150 for a straightforward self-assessment return. Others quote £500 or more for what appears to be the same service. Then there’s the question of fixed fees versus hourly rates, online services versus traditional high-street practices, and whether paying more actually gets you better service.
This guide cuts through the confusion. Whether you’re self-employed, running a limited company, managing rental properties, or an employee who’s been asked to file a tax return, you’ll find clear answers about what accountants charge in the UK and what determines those fees. More importantly, you’ll learn whether hiring an accountant represents good value for your specific circumstances.
Average Cost of an Accountant for UK Tax Returns
The cost of hiring an accountant for your UK tax return typically ranges from £150 to £500 for most individuals, though this can increase significantly for more complex situations.
For a basic self-assessment tax return with one or two income sources and straightforward finances, expect to pay between £150 and £250. If your tax affairs involve multiple income streams, capital gains, foreign income, or partnership arrangements, fees commonly rise to £300-£500 or beyond.
There’s an important distinction between a one-off tax return service and ongoing accounting support. A one-off return means the accountant simply prepares and files your annual tax return based on information you provide. Ongoing services include year-round bookkeeping, VAT returns, management accounts, and tax planning advice—these typically start from £75-£150 per month for sole traders and considerably more for limited companies.
Here’s a general overview of what different types of taxpayers might expect to pay:
Self-employed individuals with simple finances typically pay £150-£300 for their annual tax return. Self-employed with VAT registration and multiple income sources might see fees of £350-£600. Limited company directors requiring both personal and corporate tax services generally pay £500-£1,500 annually, though this varies enormously based on company size and complexity. Landlords with one or two properties usually pay £200-£400, while those with larger portfolios or capital gains tax issues may pay £500-£1,000 or more. Employed individuals needing simple tax returns often pay the lowest fees, typically £100-£200, as their tax affairs are generally straightforward.
These figures represent typical ranges in the current UK market, but actual costs depend on numerous factors we’ll explore throughout this guide.
Accountant Costs for Different Types of Taxpayers
Self-Employed & Sole Traders
For self-employed individuals and sole traders, a basic self-assessment tax return typically costs between £150 and £300. This covers straightforward cases where you have one main source of self-employment income, relatively simple expenses, and clear records.
However, costs increase when your situation becomes more complex. If you’re registered for VAT, expect to add £200-£400 annually for quarterly VAT returns on top of your tax return fee. Multiple income streams—perhaps combining freelance work with rental income or investment dividends—can push fees to £350-£500. Accountants also charge more when your record-keeping is disorganised, as they’ll need to spend additional time sorting through bank statements, receipts, and invoices.
Many accountants offer monthly packages for sole traders ranging from £75 to £200 per month. These typically include bookkeeping support, VAT returns, annual accounts, and your self-assessment tax return, often representing better value than paying for services separately.
Limited Company Directors
Limited company directors face more complex tax requirements, which naturally means higher accountant fees. You’ll need both a personal self-assessment tax return and company accounts prepared, along with corporation tax returns.
For a small limited company with straightforward finances and a single director, expect to pay between £800 and £1,500 annually for a complete service. This typically includes preparing statutory accounts, filing with Companies House, completing the corporation tax return, and handling the director’s personal tax return covering salary and dividends.
Companies with higher turnover, multiple directors, employees, or complex transactions will pay considerably more—often £1,500-£3,000 or beyond. Monthly retainer packages for limited companies usually start around £150-£250 per month for basic services, scaling up based on transaction volume and complexity.
The dividend reporting element is particularly important for directors who take income as dividends rather than salary. Your accountant needs to calculate the optimal salary-dividend split to minimise tax liability, then report these dividends correctly on your personal tax return—a service that adds significant value beyond simple form-filling.
Landlords & Property Owners
Buy-to-let landlords and property owners typically pay between £200 and £400 for a tax return covering rental income from one or two properties. This assumes relatively straightforward rental arrangements with clear income and expense records.
Fees increase substantially with portfolio size and complexity. If you own multiple properties, claim expenses across different categories, or have mortgages and refinancing to account for, expect fees of £400-£700. Landlords who’ve sold properties during the tax year face additional capital gains tax calculations, which can add £200-£500 to your accountant’s bill depending on complexity.
Property tax has become increasingly complicated in recent years, particularly with mortgage interest relief restrictions and changes to wear-and-tear allowances. A knowledgeable accountant can often identify legitimate deductions many landlords miss, potentially saving far more than their fee.
For landlords operating through limited companies rather than personally, you’ll need company accounts and corporation tax returns as well as personal tax returns, bringing costs more in line with those outlined in the limited company section above.
Employed Individuals (PAYE)
Most employees have their tax handled automatically through PAYE and never need to file a tax return. However, certain situations require employees to complete self-assessment returns, and accountant fees for these cases are often the most affordable.
Simple employed cases—perhaps declaring some freelance income under £1,000, claiming professional subscriptions, or reporting taxable benefits—typically cost £100-£200. These returns are relatively straightforward because most income is already reported to HMRC by employers.
However, employed individuals with more complex situations pay more. If you’re claiming employment expenses, reporting foreign income, dealing with share schemes, or combining employment with significant self-employment or rental income, fees rise to £250-£400 or beyond. High earners subject to restrictions on personal allowances or those with multiple employments throughout the year may also face higher fees due to increased complexity.
Many employees who need tax returns don’t realise how affordable professional help can be for their relatively simple cases, often spending hours struggling with online systems when an accountant could handle everything efficiently for a modest fee.
Fixed Fee vs Hourly Rate – What’s Better?
UK accountants typically charge for tax returns in one of two ways: fixed fees or hourly rates. Understanding which works better for you can save considerable money and stress.
Hourly rates for accountants in the UK typically range from £50 to £150 per hour, varying by location, qualification, and firm size. London and major cities see rates at the higher end, while regional practices may charge £50-£80 per hour. Qualified chartered accountants generally command £100-£150 per hour, while bookkeepers and accounting technicians charge £30-£60 per hour.
The problem with hourly billing for tax returns is unpredictability. You might receive a quote of “approximately 3-4 hours” but end up billed for six hours if complications arise or if your records need more work than anticipated. This uncertainty makes budgeting difficult and can lead to unpleasant surprises when the final invoice arrives.
Fixed fees, now the dominant model for UK tax return services, offer certainty from the outset. You know exactly what you’ll pay before work begins, regardless of how long the accountant spends on your return. For straightforward cases, this provides excellent peace of mind. Most modern accounting firms, particularly online services, operate exclusively on fixed-fee pricing.
However, fixed fees have downsides too. If your tax affairs are genuinely simple and well-organised, you might pay more under a fixed fee than you would have under hourly billing. Accountants typically build some contingency into fixed fees to protect themselves against unexpectedly complex cases.
For tax returns specifically, fixed fees generally offer better value and less stress. They incentivise accountants to work efficiently, protect you from cost overruns, and make comparing different accountants straightforward. Hourly rates might suit ongoing advisory work where the scope is genuinely unpredictable, but for the defined task of preparing and filing a tax return, fixed pricing typically works better for clients.
When comparing accountants, always ask whether their fee is fixed or hourly, what’s included in that fee, and what additional charges might apply. Some accountants quote low fixed fees but then add extras for VAT returns, company secretarial work, or communications with HMRC.
What Factors Affect Accountant Fees in the UK?
Several key factors determine what you’ll ultimately pay your accountant for tax return services.
Complexity of your income is perhaps the most significant factor. A single source of self-employment income is quick to process. Multiple income streams from employment, self-employment, rental properties, investments, and capital gains all require separate reporting and calculations, increasing the time and expertise required.
Number of income sources directly correlates with cost. Each additional income stream means more paperwork, more calculations, and more potential for errors or complications. Someone with employment income, rental income from two properties, and freelance income will pay significantly more than someone with just employment income.
Record-keeping quality dramatically affects fees. If you provide well-organised records with income and expenses clearly categorised, bank statements reconciled, and receipts filed, your accountant can work efficiently. Arriving with a carrier bag full of unsorted receipts, incomplete records, and missing bank statements can double your accountant’s time investment—and therefore your fee. Some accountants explicitly charge more for poor record-keeping or even refuse clients whose books are too disorganised.
Deadline urgency often triggers premium fees. The self-assessment deadline is 31 January each year for online filing. Approach an accountant in mid-January and expect to pay a rush fee, often 25-50% extra or more. Most accountants strongly prefer clients who engage early, typically after the tax year ends in April, allowing ample time for careful preparation. Last-minute cases create stress, disrupt workflows, and increase error risk—costs accountants pass to clients through higher fees.
Location significantly influences pricing. London accountants typically charge 20-40% more than those in other UK regions. A tax return costing £200 in Birmingham might cost £300 from a central London practice. However, with online accountants now widely available, location matters less than it once did—you’re not restricted to local practices unless you specifically prefer face-to-face meetings.
Accountant qualifications and experience also affect pricing. Chartered accountants (ACA, ACCA, or CIMA qualified) typically charge more than unqualified bookkeepers or tax preparers, though they often provide greater expertise and peace of mind. Large, established firms usually charge premium rates compared to newer or smaller practices.
Finally, additional services beyond basic tax return preparation—such as tax planning advice, representing you in HMRC disputes, or providing year-round support—naturally increase costs but may deliver substantial value.
Online Accountants vs Local Accountants – Cost Comparison
The rise of online accounting services has transformed the market, typically offering lower prices than traditional high-street accountants while delivering similar or identical services.
Online accountants in the UK typically charge £100-£300 for self-assessment tax returns, compared to £200-£400 for traditional local practices. For limited company packages, online services often start around £80-£120 per month compared to £150-£250 from traditional firms. This price difference exists because online accountants operate with lower overheads—no expensive high-street premises, smaller administrative teams, and often standardised processes aided by technology.
Most online accounting packages include digital bookkeeping tools, cloud storage for receipts and documents, automated expense tracking, and direct communication via email or video calls. Many now offer dedicated apps allowing you to photograph receipts, track mileage, and monitor your financial position in real-time.
Popular online accounting services like Coconut, Crunch, and Pie Tax typically charge £10-£35 monthly for software plus tax return services, while others like FreeAgent or QuickBooks combine software subscriptions with optional accountant services. Full-service online accountants provide comprehensive support including phone access and advice, not just software.
However, traditional local accountants offer advantages worth considering. Face-to-face meetings suit some people better, particularly for complex discussions or if you’re less comfortable with technology. Long-established local accountants often provide deeper relationships, knowing your business and personal circumstances intimately. They may offer more personalised tax planning and business advice beyond simply filing returns.
For straightforward tax returns, online accountants generally offer better value. For complex corporate structures, significant tax planning needs, or if you value in-person meetings and established relationships, traditional accountants may justify their premium pricing.
Interestingly, many traditional firms now offer online services too, blurring the distinction. The key is finding an accountant—online or traditional—who offers the right balance of cost, service quality, and communication style for your needs.
Are Cheap Accountants Worth It?
With tax return services advertised from £50 upwards, it’s tempting to choose the cheapest option available. However, extremely low-cost services carry genuine risks that can prove far more expensive in the long run.
Very cheap accountants—those charging significantly below market rates—often cut corners somewhere. They might be unqualified individuals without professional indemnity insurance, meaning you have no recourse if they make costly mistakes. Some employ inexperienced staff with minimal supervision, increasing error risk. Others keep fees low by spending minimal time on each return, potentially missing legitimate deductions or making mistakes that trigger HMRC enquiries.
Common mistakes from low-cost services include miscalculating taxable income, claiming inappropriate expenses that HMRC later disallows, missing beneficial tax reliefs and allowances, incorrectly completing tax returns leading to penalties, and failing to file on time. HMRC penalties for late filing start at £100 and increase rapidly, while penalties for careless errors can reach 30% of additional tax due. A single mistake could easily cost more than the difference between cheap and properly-priced accountant fees.
How can you spot a qualified and reliable accountant, regardless of price? Check they’re registered with a recognised professional body such as ICAEW (Institute of Chartered Accountants in England and Wales), ACCA (Association of Chartered Certified Accountants), CIMA (Chartered Institute of Management Accountants), or AAT (Association of Accounting Technicians). Verify they have professional indemnity insurance covering errors and omissions. Look for clear, transparent pricing without hidden fees. Read reviews and testimonials from existing clients. Ensure they offer clear communication and are responsive to questions. Ask about their experience with situations similar to yours.
While you shouldn’t overpay for accounting services, extremely cheap options often represent false economy. Mid-range pricing from qualified professionals typically offers the best value—you pay fair rates for competent service without unnecessary premium charges.
Can an Accountant Help You Save Money on Tax?
The question isn’t whether accountants cost money—clearly they do—but whether they save you more than they cost. For many taxpayers, the answer is emphatically yes.
Tax planning and allowable deductions represent the primary way accountants save clients money. Many people miss legitimate expenses and reliefs they’re entitled to claim. Self-employed individuals often overlook home office expenses, business mileage, professional subscriptions, or training costs. Landlords might fail to claim allowable expenses for property maintenance, letting agent fees, or travel to properties. Limited company directors may not structure salary and dividends optimally to minimise tax liability.
A competent accountant identifies these opportunities systematically. They understand current tax legislation, know which expenses HMRC accepts for different situations, and structure your affairs to use allowances and reliefs effectively. For example, ensuring you maximise pension contributions to reduce taxable income, timing capital gains to use annual exemptions, or claiming marriage allowance if eligible.
Avoiding HMRC penalties and errors provides another significant saving. Filing tax returns late or incorrectly triggers penalties that can dwarf accountant fees. Late filing carries minimum £100 penalties escalating to thousands for persistent non-compliance. Errors due to carelessness incur penalties up to 30% of additional tax due, while deliberate mistakes attract 70-100% penalties. Accountants ensure accuracy and timely filing, protecting you from these costs.
Beyond immediate tax savings, accountants provide long-term financial benefits through strategic advice. They might recommend incorporating if you’ve outgrown sole trader status, advise on VAT registration timing, suggest tax-efficient exit strategies when selling businesses or properties, or identify when to invest in equipment to claim capital allowances. This proactive guidance can save thousands over the years.
For illustration, consider a self-employed individual earning £50,000 who pays an accountant £300 annually. If the accountant identifies even £3,000 in additional allowable expenses the individual would have missed, that’s £600 saved in tax (at 20% basic rate) plus £270 in National Insurance—more than doubling the accountant’s fee in savings. Higher-rate taxpayers save even more proportionally.
Not everyone benefits equally. Employed individuals with simple tax affairs and no significant expenses to claim may find accountants save little beyond time and stress. However, self-employed people, landlords, and company directors almost invariably save more than they spend on competent accounting services.
How to Reduce Your Accountant’s Tax Return Costs
While you shouldn’t expect to negotiate accountant fees dramatically, several strategies can legitimately reduce what you’ll pay for tax return services.
Organising financial records is the single most effective way to reduce fees. Provide your accountant with well-organised, complete records and they’ll spend less time on your case, reducing fees accordingly. Create separate folders for income documents and expense receipts, categorise expenses by type (travel, equipment, premises costs, etc.), reconcile your bank statements, keep digital copies of everything, and prepare a summary of income and expenses before meeting your accountant. Some accountants explicitly offer lower fees for clients providing organised records.
Using accounting software throughout the year makes tax return preparation much simpler and faster. Tools like QuickBooks, Xero, FreeAgent, or Sage automatically categorise transactions, track expenses and mileage, generate reports, and integrate with accountants’ systems. Many accountants can then directly access your accounts, dramatically reducing time required for your tax return. Some even include software subscriptions in their fees, while others discount fees for clients using it independently.
Filing early allows you to avoid rush fees. Contact accountants in May or June after the tax year ends, rather than December or January as the deadline approaches. Early engagement allows accountants to work during quieter periods, often attracting lower fees or at minimum avoiding premium rush charges. You’ll also receive better attention and have time to address any queries or complications that arise.
Choosing the right service level ensures you’re not paying for services you don’t need. If your finances are genuinely straightforward, basic tax return preparation without ongoing advisory services is sufficient. Conversely, if you need year-round support, a monthly package often represents better value than paying separately for ad-hoc services throughout the year. Be honest about your needs and situation when discussing services with accountants.
Additionally, consider using free resources where appropriate. HMRC provides extensive guidance online, and you might handle simple queries yourself rather than paying your accountant for every question. However, know your limits—attempting complex tax issues without expertise often creates expensive problems requiring more professional help later.
Finally, maintaining good relationships with your accountant pays dividends. Respond promptly to requests for information, keep appointments, pay invoices on time, and provide complete information upfront. Accountants appreciate efficient, organised clients and may reward them with better pricing or more favourable terms.
Is Hiring an Accountant for a UK Tax Return Worth It?
Whether hiring an accountant represents good value depends on your circumstances, but for most people beyond simple employed cases, the answer is yes.
Cost versus time and stress savings is the first consideration. Completing a tax return yourself takes most people 4-10 hours or more, particularly if you’re unfamiliar with tax legislation and need to research what’s required. For someone earning £30-£50 per hour, that’s £120-£500 of time. If you pay an accountant £200-£300, you’re arguably breaking even financially while eliminating considerable stress and uncertainty.
However, the calculation goes beyond mere time. Tax legislation is complex and changes frequently. Making mistakes can trigger HMRC enquiries, penalties, and significantly more stress than simply hiring an accountant initially. The peace of mind knowing an experienced professional has prepared your return correctly is valuable itself.
Who benefits most from professional help? Self-employed individuals and sole traders with business expenses almost always benefit—accountants identify deductions and tax planning opportunities that pay for their fees several times over. Limited company directors need accountant services virtually without exception given the complexity of corporate tax compliance. Landlords with multiple properties or capital gains benefit substantially from professional expertise. High earners (£100,000+) facing personal allowance restrictions benefit from strategic tax planning. Anyone with multiple income sources, foreign income, or complex financial arrangements benefits from professional guidance.
Who might reasonably do without an accountant? Employed individuals with simple tax affairs, perhaps claiming minor employment expenses or reporting small amounts of other income, can often manage self-assessment returns independently using HMRC’s online system. Those earning below personal allowances with straightforward finances may also find professional help unnecessary. People genuinely comfortable with tax legislation and confident in their understanding might prefer handling returns themselves.
The final verdict varies by taxpayer type. For self-employed individuals, hiring an accountant is almost always worthwhile given tax savings, time saved, and stress avoided. For limited company directors, professional help is essentially mandatory given compliance complexity. For landlords, accountants typically provide excellent value, particularly with multiple properties or capital gains. For simple employed cases, you can reasonably manage alone if comfortable doing so, though many still prefer professional help for peace of mind.
Ultimately, consider not just the direct cost versus benefit, but also the value of your time, your confidence in handling tax matters correctly, and the potential cost of mistakes. For most people beyond the simplest cases, accountants represent sound investment rather than mere expense.
FAQs – Accountant Costs for UK Tax Returns
How much does a self-assessment tax return cost in the UK?
A basic self-assessment tax return for someone with straightforward income typically costs £150-£300. More complex returns involving multiple income sources, capital gains, or foreign income cost £300-£500 or more. Online accountants often charge at the lower end of these ranges, while traditional high-street practices typically charge more.
Can I claim accountant fees as an expense?
It depends on your circumstances. Sole traders and self-employed individuals cannot claim accountant fees for preparing personal tax returns as allowable business expenses. However, fees for business accounts, bookkeeping, and business-related advice are allowable expenses. Limited companies can claim accountant fees as business expenses against corporation tax. Landlords generally cannot claim fees for personal tax return preparation, though they can claim fees specifically related to rental income and property accounts.
Do accountants charge extra for HMRC queries?
Most accountants include handling routine HMRC queries within their annual fee, but more extensive enquiries or investigations typically incur additional charges. Simple clarification requests about your return are usually covered, but full HMRC enquiries requiring significant correspondence, meetings, or preparation of detailed responses are chargeable extras. Always ask your accountant what their policy is regarding HMRC communications and what might trigger additional fees.
Are online accountants cheaper than traditional ones?
Generally yes. Online accountants typically charge 20-40% less than traditional high-street practices due to lower overheads. A self-assessment return costing £200-£250 from an online accountant might cost £300-£400 from a traditional firm. However, pricing varies considerably by accountant, and some traditional firms now offer competitive online services. The key is comparing what’s included in each service rather than simply choosing the cheapest option.
Conclusion
Accountant costs for UK tax returns typically range from £150 to £500 for individuals, with limited company packages costing considerably more at £800-£1,500 or beyond annually. Your specific costs depend on your taxpayer type, income complexity, record-keeping quality, and whether you choose online or traditional services.
Self-employed individuals and sole traders generally pay £150-£400 depending on their financial complexity. Limited company directors face higher costs for combined personal and corporate tax services. Landlords typically pay £200-£700 based on portfolio size and whether capital gains are involved. Employed individuals with simple tax affairs often pay the least, usually £100-£250, though complex employed cases cost more.
