Contractor accountant fees - what are the typical costs?

Hundreds of specialist accountants work within the contracting industry, which promotes healthy competition and keeps fees relatively low.

And most contractors have a very similar accounting profile – unlike other small businesses.

They’re typically one-man bands with a simple share structure: They take a tax-efficient salary and extract profits as dividends.

For this reason, you can reasonably accurately compare contractor accountants, as they almost all offer the same core services as standard.

In our experience, cost and customer service are the two most important factors contractors consider when choosing an accountant.

This concise guide looks at the typical fees and additional costs associated with hiring an accountant.

What are the typical monthly fees?

Here are some examples of how much the leading specialist firms charge:

Accountant	Cost + Notes
Aardvark Accounting	£89 \| Free company formation, FreeAgent software. Tax planning and advice.
Clever Accounts	£104.50 \| IR35 FLEX solution – any contract, now and in the future .
SG Accounting	£119 \| Free company formation, face-to-face meeting, free tax return.

What’s included in the monthly fee?

Most contractor accountants charge fixed monthly fees.

Depending on the firm and the number of services it provides, you can pay £50 to £150 per month or more.

Firms sometimes offer different service packages, often known as ‘essential’, ‘standard’ and ‘ultimate’.

The more expensive packages often contain business insurance and extra tax planning services. Or they give you priority over other clients when completing your annual accounts.

Core services

However, all monthly packages, whatever the cost, should include some specific core services.

These are the basics that ensure your company accounts are processed and your statutory deadlines are met.

As part of their core offering, your accountant should:

Complete and file your company’s annual accounts.
Process the payroll for the company director.
Submit the company’s quarterly VAT returns.
Provide inclusive accounting software. FreeAgent is a very popular choice.
Deal with correspondence from Companies House and HMRC.

For more details, read our guide to typical accountants’ duties.

Additional services

On top of these core services, many accountants will:

Form your limited company.
Register your company for Corporation Tax, VAT, and as an employer.
Set up a business bank account for your company.
Provide a registered address for your company, and a service address for company officers.
Complete your personal tax return (Self Assessment).
Submit your company’s Confirmation Statement to Companies House (£13).
Provide IR35 contract reviews.
Complete accounts handed over by your previous accountant.
Add additional employees to the payroll.
Complete extra personal tax returns (for a co-director, for example).
Provide references for mortgage or lettings companies.

Some monthly packages include all these ‘extras’ and meet all your company accounting needs for under £100.

Others will let you add some ‘extras’ to your monthly fee, or charge a one-off fee for specific tasks.

So, if you want to compare accountants’ fees accurately, you need to find out exactly what each monthly fee includes.

What other factors are important apart from cost?

Is the accountant a contractor specialist? A specialist firm will have industry-specific knowledge.
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.