Assessing the Cost of Annual Limited Company Accounts: Is £800 a Reasonable Fee?
Operating an online retail business, particularly on platforms like eBay, often involves navigating various financial and regulatory obligations. One common area of concern for small business owners is the cost associated with maintaining company accounts. Recently, a business owner shared their experience of paying approximately £800 annually for limited company accountancy services, prompting the question: Is this a typical fee, or am I overpaying?
Understanding the Scope of Accountancy Services for Small Limited Companies
For small businesses, especially those generating around £75,000 in annual revenue, engaging a professional accountant is often a prudent decision. In this scenario, the business owner manages their own bookkeeping—recording transactions and maintaining financial records—and simply outsources the preparation and submission of statutory accounts to a qualified accountant. The accountant then files the necessary reports with Companies House, ensuring compliance with legal obligations.
Factors Influencing Accountancy Costs
The fee of approximately £800 per year covers essential services, such as:
- Preparing and submitting statutory annual accounts
- Ensuring compliance with financial reporting standards
- Providing professional advice on tax planning and compliance
- Managing communication with Companies House and HM Revenue & Customs (HMRC)
As the business owner plans to start taking dividends and register for VAT, the complexity of these tasks may increase, potentially leading to higher accountancy fees. VAT registration involves ongoing compliance, such as submitting VAT Returns, which adds an administrative layer that professional support can help manage efficiently.
Is £800 a Fair Price?
In the small business community, annual accountancy fees typically range from £500 to £1,200, depending on the complexity of the business, volume of transactions, and scope of services provided. For a business turning over approximately £75,000, a fee of £800 is within a standard range, especially when the owner maintains their bookkeeping, reducing the accountant’s workload.
Should You Be Concerned About the Cost?
While costs can sometimes seem high, it’s essential to consider the value of professional advice and compliance assurance. Engaging an accountant can help identify tax savings, prevent costly errors, and ensure smooth regulatory compliance—ultimately saving money and reducing stress.
If the upcoming VAT registration and dividend payments increase the complexity of your financial affairs, discussing potential fee adjustments with your accountant is advisable. Some firms offer fixed-price packages tailored to small businesses, which can provide greater clarity and budget predictability.
