How much do annual company accounts cost?
26th June, 2023
If you are planning on starting a business or are nearing the end of your first year, you may be wondering how much your first set of company accounts are likely to cost.
It’s good to plan ahead and build the cost of the accounts into your first-year or annual budgets. But exactly how much should you expect to pay?
The simple answer is that there is no single, one-size-fits-all figure, and there are a lot of variants that can affect the price you pay, such as:
- The legal structure of your business: are you a Limited Company, LLP, partnership, or sole trader?
- Complexities of the accounts: Is your business relatively straightforward in terms of income and expenditure or do you have a lot of assets, carry out R&D, and have loans and debt?
- The collation and presentation of the data What accounting systems do you use, Have all your transactions been correctly added during the year?
There will be geographical variances too, and you can easily end up paying for ego. In the City of London, you will pay more, but a higher price is not necessarily a sign of better quality, and you tend to end up paying for their increased operational costs.
While there is no industry-wide agreed pricing structure, an established company should expect to pay £1,500 for the preparation and filing of their statutory accounts, Directors’ tax planning, and then the corporation tax calculation and return to HMRC. Expect to pay more if you are running a slightly more complex business, but small businesses, partnerships, and sole traders will cost less.
What are annual company accounts?
The preparation of annual company accounts should not be confused with broader accounting activities such as the provision of regular management accounts, bookkeeping, payroll, or an ‘all-in’ annual accounting subscription. So, if you are comparing prices, ensure you are being quoted on a like-for-like basis.
Annual business accounts are those required by companies as part of their statutory obligations. You may be quoted for this activity in pure isolation, but that is unlikely. Typically, accountants, like Haggards Crowther, will give you a price inclusive of those other year-end activities (corporation tax, tax planning, and filing) that are directly linked to the preparation of the accounts.
What else will I have to pay for?
Be prepared to pay for anything outside of this year-end process, such as general business advice or add-on services (VAT returns, payroll, or credit control, for instance).
If you are seeking an accountant, the best advice we can offer is to agree on a price and payment profile that fit your cash flow and are reflective of your overall needs across the year. Most accountants will agree on a monthly package these days, with the benefit being that it spreads the total costs across the year, avoiding lumpy one-off bills.
Look for a match with your own business
If you want to balance service with cost, then find an accountant whose values and scale match your business. As an example, don’t go to KPMG or Ernst & Young if you have a turnover of £200,000. Find someone with expertise or experience in your field who is local or simply understands your vision. That experience of working with similar-sized companies or knowledge of your sector will add value and will also ensure the preparation process is faster, often leading to savings.
While we all enjoy value, we would strongly recommend that you avoid faceless, online-only, price-driven accounting options. These organisations tend to lack the advice element and are merely processing the numbers.
Hamid has a wealth of experience advising owner-managed businesses across a wide range of issues, including the sale of businesses, value generation for shareholders, and formulating and advising on tax-efficient strategies. He’s also a specialist at helping start-up companies reach their full potential through teamwork, strategic thinking, and leadership.
His expertise spans technology, cryptocurrency, property investment, and various service-based industries, offering clients tailored solutions to navigate their unique challenges effectively.
