How Much Does an Accountant Cost for a Self Employed Person

Introduction

As a self employed individual, you are responsible for managing your own taxes, bookkeeping, and financial records. While you can do this yourself, many people choose to work with an accountant to avoid mistakes and free up time to focus on running their business.

Accountants’ fees vary widely, from affordable online services to full advisory support for growing businesses. Understanding what influences the cost helps you make an informed choice and get the best return on your investment.

Average cost of an accountant for self employed people

The average cost of an accountant for a self employed person typically ranges between £200 and £600 per year for basic services. This usually covers preparation and submission of your annual Self Assessment tax return and basic accounting support.

However, prices can be higher if you need additional services such as bookkeeping, VAT returns, payroll, or business advice.

Typical cost breakdown

Self Assessment tax return only: £150 to £300 per year.

Bookkeeping and tax return package: £300 to £600 per year.

VAT registration and returns: £250 to £500 per year.

Payroll services: £15 to £30 per employee per month.

Comprehensive accounting package (including tax advice and support): £600 to £1,200 per year.

These figures are general estimates. Fees can be lower for online accountants or higher for firms offering more personalised support and in-depth advice.

Factors that affect accountant costs

1. The complexity of your business

The more complex your accounts, the higher the fee. A sole trader with one income stream and few expenses will pay much less than someone running multiple contracts, employing staff, or managing VAT and business assets.

2. Services required

If you only need an accountant to file your tax return, costs will be minimal. However, if you want help with tax planning, monthly bookkeeping, or HMRC correspondence, expect to pay more.

It is often more cost effective to choose a package that includes everything you need rather than paying for services separately.

3. The accountant’s experience and qualifications

Fully qualified accountants, such as members of the ACCA (Association of Chartered Certified Accountants) or ICAEW (Institute of Chartered Accountants in England and Wales), generally charge more than unqualified bookkeepers. The higher fee reflects their expertise and professional accountability.

4. Location of the accountant

Fees are often higher in London and other large cities than in smaller towns or for online accountants. Many self employed people now use cloud-based accounting services, which tend to be cheaper because everything is managed digitally.

5. Frequency of contact and support

Some accountants offer year-round advice and regular check-ins, while others work on a once-a-year basis to file your return. Ongoing support adds value but also increases cost.

Example

A freelance graphic designer uses an accountant once a year to prepare and file their Self Assessment, paying £250. In contrast, a self employed contractor who needs monthly bookkeeping, VAT returns, and tax advice may pay £1,000 per year for a more comprehensive service.

Online accountants versus traditional firms

Online accountants have become increasingly popular among self employed professionals because they are affordable, convenient, and efficient.

Online accountants typically charge lower fees (starting around £20 to £50 per month) and offer services such as:

Automated bookkeeping using cloud software.

Digital submission of tax returns.

Real-time access to accounts and reports.

Traditional local accountants often charge more but provide in-person consultations, tailored advice, and more detailed financial planning.

The best choice depends on your business type and how much personal support you prefer.

What services are included in an accountant’s fee

When comparing accountants, it is important to understand what is included in the quoted fee. A typical package for self employed people may cover:

Registration with HMRC as self employed.

Preparation and filing of the Self Assessment tax return.

Bookkeeping and expense tracking.

Tax calculation and payment reminders.

Correspondence with HMRC.

Advice on allowable expenses and tax planning.

Some accountants include basic business advice in their packages, while others charge extra for consultation or strategic planning. Always ask for a full list of services before agreeing to a price.

How to reduce your accounting costs

There are several ways to keep your accountant’s fees affordable:

Use accounting software such as QuickBooks, Xero, or FreeAgent to keep your records organised and reduce the accountant’s workload.

Provide receipts and bank statements promptly in digital format.

Keep your business and personal expenses separate to save your accountant time.

Compare quotes from several accountants before choosing.

Consider an online service if you are comfortable managing your finances digitally.

These simple steps can lower the time an accountant spends on your accounts, which directly reduces your bill.

Benefits of hiring an accountant

Although hiring an accountant costs money, it often pays for itself through better tax efficiency and reduced stress. The main advantages include:

Saving time on paperwork and HMRC submissions.

Ensuring you claim every allowable expense.

Avoiding mistakes that could lead to penalties.

Receiving advice on business growth and cash flow.

Peace of mind knowing your tax is handled correctly.

In many cases, the savings and benefits outweigh the cost of hiring a professional.

Example

James, a self employed electrician, used to file his own tax returns but often overpaid because he missed allowable expenses. After hiring an accountant for £350 per year, he reduced his tax bill by £700 and saved hours of admin time.

How to choose the right accountant

When selecting an accountant, consider the following:

Are they qualified and experienced with self employed clients?

Do they offer clear, transparent pricing?

Can they provide references or reviews from other clients?

Do they use modern accounting software?

Are they proactive in offering tax planning advice?

An accountant who understands your business and communicates well will save you more in the long term.

Common mistakes to avoid

Choosing the cheapest option without checking qualifications.

Failing to ask what services are included in the quoted price.

Leaving paperwork until the last minute, which can increase costs.

Not reviewing fees annually to ensure you are getting good value.

Being organised and maintaining regular communication helps build a productive working relationship with your accountant.

Conclusion

For most self employed people, an accountant’s cost ranges from £200 to £600 per year, depending on the complexity of the work and level of support needed. While you can manage your own accounts to save money, professional help can save you time, reduce tax liability, and prevent costly mistakes.

Choosing the right accountant is an investment in your business. Whether you prefer an online service or a local adviser, look for someone who offers transparent pricing, relevant experience, and year-round support to help your business grow confidently and compliantly.