When choosing a contractor accountant, we always suggest that the monthly cost is an important factor you should consider when selecting a professional advisor to look after your company’s affairs.
Very few contractors use high street accountants, and/or firms that charge a percentage of turnover as a fee. They tend not to be able to compete with the multitude of contractor accountants out there.
What are the typical monthly fees?
Here are some examples of how much the leading specialist firms charge:
|Aardvark Accounting||£76||Free company formation, FreeAgent software. Tax planning and IR35 advice.|
|Clever Accounts||£99.50||IR35 FLEX solution – any contract, now and in the future - £99.50 per month + 6 months' free business insurance.|
|SG Accounting||£109||Free company formation, face-to-face meeting, free tax return, IR35 contract review.|
|InTouch||£120||Free company formation, registered office address, unlimited IR35 reviews|
What’s included in the monthly fee?
Almost all specialist contractor accountants charge monthly fees. You can pay anything from £50 to £150 per month and more, depending on the firm, and the number of services they provide to your company.
If you’re looking for an accountant, you’ll find that some firms operate a number of service levels, giving each one a name, such as ‘bronze’, ‘silver’ and ‘gold’, or ‘essential’, ‘standard’ and ‘ultimate’.
The more expensive packages will often contain things like inclusive business insurance, extra tax planning services, or give you priority above other clients when it comes to completing your annual accounts.
However, all monthly packages, whatever the cost, should include a number of core services – the basics which will ensure your company accounts are processed, and your statutory deadlines are met. These core services are:
- Completing the company’s annual accounts.
- Processing the payroll for the company director.
- Submitting your quarterly VAT returns.
- Dealing with correspondence from Companies House and HMRC.
For more details, read our guide to typical accountants’ duties.
On top of these core services, you might have to pay extra for:
- Forming your limited company.
- Providing a registered address for your company.
- Completion of your personal tax return (Self Assessment).
- Submission of your company’s Confirmation Statement to Companies House (£13).
- IR35 contract reviews.
- Completing accounts handed over by your previous accountant.
- Changing the company’s share structure.
- Costs relating to any additional employees (payroll, etc.)
- Completing extra personal tax returns (for co-director, for example).
- Providing references for mortgage / rental purposes.
Some monthly packages include all of these ‘extras’ and meet all your company accounting needs for under £100. Others cost significantly more and still charge for a number of additional services you may need.
Although you shouldn’t ever need to spend more than a few hours each year updating your accountant with your income/expenditure details, the amount of time you do spend will often depend on the type of technology each firm has in place.
So, you need to find out exactly what each monthly fee includes if you want to accurately compare accountants’ fees.
What other factors are important apart from cost?
- Is the accountant a contractor specialist?
- What qualifications does the accountancy firm have?
- What service guarantees will I receive?
- Does the accountant provide access to online accounting software – either bespoke or third party (like the excellent FreeAgent)?
- Will you have a dedicated account manager?
These are important questions to ask any prospective accountant.
- Visit our growing list of IT contractor accountants.
- Find out more in our guide to choosing a contractor accountant, and perhaps – even more importantly – what to avoid when choosing a contractor accountant.