If you’ve searched for the cost of an accountant for a limited company recently, you’ve probably seen figures ranging from £50 a month to £500 a month with no clear explanation of why the gap is so large. The honest answer is that both ends of that range can be correct — they’re just describing completely different businesses with completely different needs.

Most small one-director limited companies — particularly contractors and freelancers — sit firmly at the lower end of that range. In our experience, a typical compliance package for a straightforward contractor company should cost somewhere between £80 and £180 per month, depending on what’s in scope. Anything well above that warrants a closer look at what you’re actually getting.

Below, we’ve broken down what’s usually included in a standard package, what pushes the price up, and where the extras tend to catch people out.

For a small limited company — one director, no employees, and modest turnover — a standard accountancy package will typically include:

• Year-end statutory accounts prepared and filed at Companies House
• Corporation Tax return (CT600) filed with HMRC
• Confirmation statement (the annual Companies House filing)
• Registered office address in some cases
• Basic ongoing advice via phone or email

Some packages also bundle in the director’s personal Self Assessment tax return. Others treat it as a separate charge — usually £150 to £300 per year on top. It’s worth checking before you sign up, because most directors need one and it’s easy to assume it’s included when it isn’t.

Annual costs for that core compliance work typically sit between £800 and £1,500 for a simple one-director company. Monthly fixed fees for the same scope are commonly £70 to £150. Once you add VAT returns, payroll, or bookkeeping into the mix, the monthly figure rises — reasonably so, because the workload does too.

The key word in all of this is fixed. Cloud accounting software like Xero has made fixed-fee pricing standard across most modern practices. You should know exactly what you’re paying before any work begins, with no hourly billing surprises when you ask a question mid-year.

The main factors that push accountancy fees up for a limited company are fairly predictable once you understand what creates work:

VAT registration

If your company is VAT-registered, you’ll have quarterly VAT returns to prepare and file. That’s four additional submissions per year on top of your year-end work. Expect this to add £30 to £70 per month to a base package, depending on the volume of transactions and the VAT scheme you’re on.

Payroll

Running a payroll — even a single-director salary — means monthly or weekly RTI submissions, payslips, and auto-enrolment obligations. A basic payroll for one person might add £15 to £30 per month. Multiple employees will cost more.

Bookkeeping

If you want your accountant to handle day-to-day bookkeeping rather than just the year-end, that’s a meaningful additional service. Prices vary with transaction volume but are typically charged monthly. Many contractors prefer to maintain their own records in Xero and hand over clean books at year-end — which keeps costs down.

CIS

Construction Industry Scheme obligations add monthly filings and subcontractor verification. If CIS applies to your company, make sure it’s explicitly in scope before agreeing a fee.

The more of these you need, the higher the monthly cost. That’s not unusual — it just reflects how much work is actually involved.

A number of services are commonly excluded from standard packages and quoted separately when they come up. Knowing about them in advance means no unpleasant surprises.

Director’s Self Assessment. As mentioned above — often excluded from the headline fee. If you take dividends as well as salary, your personal tax return isn’t trivial and it’s worth valuing it properly.

Mortgage or income references. If you apply for a mortgage, some lenders ask your accountant to write a formal income confirmation letter. A reasonable fee is £50 to £150. Some firms charge nothing; others charge significantly more.

Additional self-assessments. If there are two directors, or a spouse holds shares, their personal returns are usually charged separately.

Company formation. If you haven’t incorporated yet, some accountants include this; others charge for it. The Companies House fee itself is £50 online.

HMRC investigation support. Routine enquiries and compliance checks aren’t typically covered by a standard fee. Some practices offer tax enquiry insurance as an add-on — usually £100 to £200 per year — which covers professional fees if HMRC opens a formal investigation. For most small companies the risk is low, but it’s worth being aware of.

None of these extras are unreasonable to charge for. The issue is when they’re not disclosed upfront and appear as surprise invoices later in the year.

We’re obviously not a neutral party on this question. But there’s a genuine case to be made beyond the obvious compliance angle.

The most common tax planning opportunity for a small limited company is getting the director’s salary and dividend split right. The optimal structure changes year to year as thresholds shift, and the difference between a well-structured split and a poorly structured one can be meaningful — sometimes more than the annual accountancy fee itself.

Beyond that, there’s the time cost. DIY accounting using Xero or FreeAgent is genuinely possible for a straightforward business, and plenty of contractors do it. But if you’re spending several hours a month on bookkeeping, VAT submissions, and trying to decode HMRC correspondence, that time has a value — and an accountant covering the same ground at a fixed monthly fee often represents better value than it looks on paper.

The other thing worth saying: a good accountant should be someone you can actually call when something changes — a new contract, a PAYE dispute, a question about whether a piece of equipment qualifies for capital allowances. That ongoing access matters, and it’s why we’d encourage anyone looking at a package to ask directly: who do I speak to, and how quickly will they get back to me?