What You’re Actually Paying For When You Hire an Accountant (Beyond the Tax Return)

Most people think they’re paying an accountant to “do their tax return.” That’s a bit like saying you pay a solicitor to “fill out forms.”

If all you’re getting is a completed tax return once a year, you’re missing about 80% of the value.

The Tax Return Is Just the Starting Point

Yes, accountants prepare your tax return. But before that return gets filed, they’re:

• Reviewing your numbers with fresh eyes and spotting mistakes (the £3,000 you recorded as personal when it was business, the VAT you shouldn’t be charging)
• Making sure you’re claiming every allowance and relief you’re entitled to
• Catching problems before they become expensive penalties

What Else Should You Be Getting?

Peace of mind. HMRC’s penalty system doesn’t care that you “did your best.” You’re paying for someone who knows the rules and takes responsibility for getting it right.

Year-round access. “Can I claim this?” “Should I register for VAT?” These questions don’t wait for year-end. You should be able to ask them when they come up.

Proactive tax planning. The best time to reduce your tax bill is before the year ends, not after. Should you delay that purchase? Pay a dividend or salary? These decisions made at the right time can save thousands.

A buffer with HMRC. Someone who speaks their language and handles correspondence so you can focus on your business.

Business advice. Should you incorporate? Expand? Buy or lease? Good accountants help you see the full picture, not just the tax implications.

Core Services vs Add-Ons

Most accountants include these in their standard fees:

• Annual accounts and tax returns
• Routine queries throughout the year
• Basic tax planning
• Dealing with standard HMRC letters

They usually charge extra for:

• VAT returns (£300-£600/year)
• Payroll (£15-£30 per payslip)
• Bookkeeping
• Management accounts
• Specialized tax work (R&D claims, complex property deals)

Why the split? Because not everyone needs everything. You shouldn’t subsidize services you don’t use.

What Should You Actually Pay?

Rough UK market guides:

• Sole traders: £400-£800 for accounts and tax return
• Limited companies: £800-£1,500 for accounts and corporation tax
• Plus VAT returns: £75-£150 per quarter
• Plus payroll: £15-£30 per payslip

Complex situations cost more because they need more expertise and time.

Cheap vs Good Value

The cheapest accountant is rarely the best value. Common problems with cheap services:

• Never return calls
• Rush everything at the last minute
• Miss tax planning opportunities
• Make costly errors
• Treat you like a number

But expensive doesn’t automatically mean better either.

You’re Getting Good Value When:

• Your accountant knows your business well enough to give relevant advice
• You feel comfortable asking questions (and getting plain English answers)
• Tax planning happens proactively
• Problems get caught early
• You understand what you’re paying for
• The service feels personal

The Question to Ask

Instead of “How much do you charge?” ask “What exactly am I getting for that fee?”

A good accountant should clearly explain:

• What’s included and what’s extra
• How accessible they’ll be
• Response times
• How they handle questions

If they can’t answer clearly, or make you feel stupid for asking, find someone else.

The Bottom Line

You’re not paying for a tax return. You’re paying for expertise, compliance, proactive advice, peace of mind, and a relationship that makes your business life easier.

If you’re not getting all of that from your current accountant, it might be time to ask whether you’re getting what you’re paying for.