How much do accountants charge for self assessment in the UK?

Doing your self assessment tax return can be a daunting task, especially if you have complex finances or are self-employed. Many people choose to use an accountant to help prepare and file their self assessment return accurately and on time. But how much do accountants typically charge for this service in the UK? Here’s an overview of accountant fees for self assessment:

Hourly Rates #

Most accountants will charge an hourly rate for helping with self assessment. Hourly fees often range from £50 to £150 per hour depending on the accountant’s experience and qualifications. Some junior accountants or bookkeepers may charge closer to £30-£50 per hour.

The time it takes the accountant will depend on the complexity of your tax situation. Simple tax returns with just employment income may only take 1-2 hours. But returns with rental properties, self-employment, investments etc can take 5+ hours. Make sure to get an estimate of hours required so you know how much the total cost may be.

Fixed Fees #

Instead of hourly rates, some accountants offer a fixed fee for self assessment services. Common fixed fees include:

• Basic self assessment tax return: £150-£300. For simple tax situations with employment income and possibly some savings interest or investment income.
• Standard self assessment tax return: £250-£500. For moderately complex returns with some additional income sources like property, pensions, dividends etc.
• Complex self assessment tax return: £500-£1000+. For complicated tax affairs such as self-employment, partnerships, foreign income, let properties, etc.

The fixed fee will cover preparing and filing your tax return by the deadline. But additional services like dealing with HMRC inquiries or tax planning advice would incur extra fees.

Subscription Packages #

Some accountants offer self assessment services as part of an annual subscription package. For example:

• £20-£50 per month: Includes preparation of self assessment tax return along with bookkeeping and payroll services if needed.
• £100-£200 per month: Full end-to-end compliance including self assessment, VAT returns, bookkeeping, and advice.

These packages allow you to spread the cost over the year, rather than a one-off fee when your tax return is due. Subscription pricing often works out more cost effective for small businesses.

Additional Costs #

On top of the base fees, accountants may charge extra for:

• Late fees if you don’t provide your tax information in a timely manner, causing a rush or filing deadline to be missed. Late fees could be an additional £100-£200.
• Corresponding with HMRC if your return gets flagged for review or inquiry. Extra time spent could be billed hourly.
• Reviewing previous years’ tax returns if your records are disorganized. Hourly fees would apply.
• Recommending tax reliefs or planning opportunities. Complex tax planning is usually an additional cost.

When comparing fees between accountants, be sure to confirm exactly what is included in the quoted price and what would incur additional fees. Also check if the fees include VAT.

What Impacts the Cost? #

Several factors can influence how much an accountant charges for self assessment:

• Accountant’s location - Fees tend to be higher in large cities like London and lower in rural areas.
• Qualifications and experience - A chartered or certified accountant will charge more than an AAT technician or bookkeeper. As will someone with decades of tax experience.
• Firm size - Larger firms tend to have higher rates than sole practitioners or independents. But smaller firms are not always cheaper.
• Your tax complexity - The more income sources and deductions you have, the more time it takes to prepare your return.
• Filing deadline - Prices are often higher for filling late returns or if you missed earlier deadlines.
• Ongoing relationship - Accountants may offer better rates to retain long term clients versus one-off assignments.

Ways to Reduce Self Assessment Fees #

If you’re looking to reduce what you pay for your self assessment, here are some tips:

• Shop around and compare multiple quotes rather than going with the first accountant you talk to.
• See if you qualify for any exemptions or simplified filing based on your circumstances.
• Gather all your tax paperwork and documents so it’s ready for the accountant. Disorganization leads to extra time and fees.
• Book early - accountants offer better rates before they get very busy close to tax deadlines.
• Pay on time - late payment of invoices can mean you lose any discounted rate.
• Build an ongoing relationship with an accountant so they know your tax situation each year.
• Use bookkeeping software or apps to keep your records organized and tax ready.
• Consider DIY tax filing if you have a simple return - but be careful to get it right.

Following these tips can help you get quality services from an accountant to handle your self assessment, while also controlling the amount you pay. Just be sure to confirm all fees up front so there are no surprises when your work is complete.