What’s the Cost of an Accountant for an LTD Company?

Any type of business has a seemingly endless number of financial overheads to deal with, but when your company becomes a limited company, there will be a number of new processes and procedures you need to follow. To the untrained person, this can quickly become very daunting and you may find yourself drowning in paperwork, but perhaps not willing enough to hire an accountant.

If you misinform HMRC about anything – even by mistake – or if you let your bookkeeping practices slide a little bit, your company may be financially and legally penalised, causing further issues down the line. Coupled with the already tremendously long list of things you may have to deal with day-to-day, a financial headache is far from needed.

Hiring a professional accountant is the best route to avoid any discrepancies and help you grow your business rather than sink it, but like many directors, you’re likely questioning the fees associated with hiring an LTD company accountant.

At Accountancy Cloud, we’ve helped 300+ startups with their online accounting, CFO and R&D tax needs. So we know a thing or two about the average cost of an accountant for an LTD company.

What’s the average cost of an accountant for an LTD company?

This is perhaps the most obvious question and the one everyone wants the answer to, but it’s not quite as simple as plucking a number out of the air. There are several variables that will dictate how much a limited company accountant may charge you for their services. Some of the deciding factors will include:

· The exact services you need e.g. year-end accounts, calculating and paying tax, assisting with payroll, and online accounting software

· How big your company is

· How scalable your business activities are

Generally speaking, when you hire a limited company accountant, they will charge a monthly fee, and on average, those fees vary from £60 - £200 per month. As mentioned, the fee will depend largely on what you choose to have included in your package. At Accountancy Cloud, our team is on hand to talk you through all our packages to help you find the right solution. Simply get in touch with us to discuss your needs!

Is an accountant needed?

You might be wondering if you really need an accountant; you may even be thinking ‘I can learn how to do the payroll, bookkeeping can’t be that hard, and I can use online resources to help me with my tax’. All of these things might be true, but they aren’t necessarily the best option.

Businesses of all types operating in the UK must ensure they keep accurate records and submit data, such as tax returns, before a specific deadline. If you fail to hit the deadline due to poor time management (which is easily done when you have a million and one other things to do in a day), you will be fined. Fines from HMRC start at £100, but the longer you leave it to submit your documents, the larger the fine will be.

For a limited company with healthy profits, a fine might not seem like the biggest issue, but if you make a mistake on any of the documents you file, your business may end up being investigated, and if this is the case, a much larger fine may be imposed; one that could eat into your profits and seriously disrupt the financials of your business.

A limited company accountant is employed specifically to deal with keeping your business finances above board, meaning their job is to keep your books up to date, ensure accurate data is referenced, and make sure your business meets all the deadlines for HMRC.

When you hire an accountant, you can rest easy knowing that your company is fulfilling its financial obligations in a legal sense, meaning you can focus on your strengths as a director and funnel your efforts into running other parts of your business.

What goes into limited company accountant fees?

Before you start looking at which accountants to hire, you’ll want to understand what goes into the packages and what you can expect to gain from hiring an accountant for your limited company. As a general rule of thumb, basic amenities covered in a monthly package for a smaller limited company may include:

· Helping you structure your business with regards to financing and money during the initial set-up stage

· Registering your business as a limited company with HMRC

· Setting up your business with Companies House and managing any correspondence with them

· Ensuring you’re VAT registered and managing your quarterly VAT returns where applicable

· Completing your year-end corporate tax return

· Managing annual accounts on behalf of your company

· Dealing with payroll for both you and your staff members

If you have a larger company, you may need additional services added to your package to ensure you’re covering all bases. Some of the additional services that you may need to pay extra for can include:

· Bookkeeping services

· Assisting with drafting contracts of employment for new starters and contract changes

· Planning for and managing your quarterly accounts

· Processing any payments that are due to HMRC

Depending on which of the above you want to add on, the price will change.

Are taxes included?

As a limited business owner, one of the key things you need to keep on top of from a legal standpoint is your taxes. As this is one of the foundation parts of accounting, you should find that end-of-year tax returns are included in almost all basic package limited company accountant fees.

How to choose the right accountant

There’s little more that is precious to your business than your finances. When you’re handing the reins over to someone else, you want to know that they’re responsible, professional, efficient, experienced, and that they have the best interests of your business at the forefront of their mind. You need someone you can trust, and if you’ve been the sole person behind your company’s finances this far, it can be difficult choosing someone to pass the baton to.

There are thousands of limited company tax accountants for you to choose from, but before you select the first one you see, there are some things you’ll need to consider, and they are as follows:

Payment method

Depending on how your business is set up, you may find it more efficient to pay your accountant monthly as opposed to yearly, or vice versa. This is something you’ll need to discuss with them before you sign a contract to ensure you’re choosing a payment plan that works for your business and that you’re comfortable with.

Accessibility

Ideally, you need your accountant to be there for you whenever you need them, especially when important deadlines like tax return season rolls around. Your accountant may have a number of other clients, but it’s important to ask them how accessible they are so that if you need them, they’re able to assist you without you waiting a week for a response.

Hidden fees

Like any service provider, a lot of accountants weave in hidden fees that may not be immediately obvious to you at the beginning. To avoid getting stung, make sure you ask about things like minimum terms and whether there are termination fees should you decide to leave early, or if there are additional fees for completing things like VAT returns.

Testimonials

You might have found a seemingly great deal from an accountant with lots of experience and who ticks all your boxes on paper, but remember to ask for testimonials. You don’t want to be in a position where you’ve been reeled in by a fancy website and a pleasant conversation; the best way to judge someone’s professional capabilities is to read reviews from real people they’ve worked with before.

You can either ask the accountant for direct reviews, or you can check their website, Google profile, or feedback on review sites like Trustpilot and Feefo to get a better understanding of what you can expect from them.

Customer service

When you hire an accountant for your business, you might not realise the importance of customer service, but given how closely you’ll be working with them during the initial handover stage and near important deadlines, it’s important that you scope out their customer service skills before you commit.

How online accounting can help

At Accountancy Cloud, we understand that you need more than just an accounting firm. We deliver online accounting, but also expert CFO and R&D tax support for startups to help you reach your goals and scale.

Our online accounting software assists our incredible finance team to provide you with a seamless end-to-end solution, with ample opportunity for you to keep on track of your books and see where your money is coming from and going to.

What’s more, we charge a transparent fee which means you don’t need to worry about hidden costs.

In summary

The cost of an accountant for an LTD company varies greatly depending on what you need, the level of service you want, and the size of your company, but one thing is for sure, growing businesses need more than just the accounting basics. Our team is ready and waiting to talk you through our value added online accounting, CFO and R&D Tax services.

If this is something you would like to discuss more with us, please get in touch.