As a business owner, you can choose to have an accountant handle your taxes and complete your Self Assessment tax return for you. The cost for this service will vary depending on the type of business you run and how complex your operations are.

This guide will explore how much you might expect to pay to have an accountant manage your taxes. We’ll answer the following questions:

  • How do Self Assessment tax returns work?
  • Do I need an accountant to file my tax return?
  • How can I find an accountant to help with my tax return?
  • What records will an accountant need to file my tax return?
  • How can Countingup help me get my financial records in order?

How do Self Assessment tax returns work?

Whether you’re a sole trader or run a small limited company, you need to file annual accounts with HMRC. These accounts show how much your business earned (your income) and spent (your expenses) in the tax year (April 6 – April 5). You will then need to pay taxes against your profit, which is your total income minus your overall business expenses.

Learn more about how to do a Self Assessment tax return.

Do I need an accountant to file my tax return?

No, is the simple answer. 

It’s not a legal requirement to have a professional accountant help you with your Self Assessment tax return. You’re perfectly fine completing and filing these yourself. That said, you certainly can choose to hire an accountant to take the burden off your shoulders.

Many self-employed people have limited knowledge of accounting and may not feel confident in their ability to get everything right. For example, you might miss out on claimable expenses that could shave money off your tax return (learn more about expenses here).

An accountant can make sure everything gets done correctly, work out calculations quickly, and advise you on expenses and income factors that are relevant to your business.

How much does an accountant charge for filing tax returns?

It’s difficult to give an exact number for how much you’ll have to pay to have an accountant file your tax return since prices will vary significantly depending on the situation. 

There are several aspects that play a role in determining the cost, including: 

  • How complex your business is (for example, if you have inventory, employees, company vehicles, and so on)
  • Whether you’re close to the deadline and need express service
  • Where you’re based (accountants in London and the southeast typically charge a higher rate than elsewhere)
  • How experienced your accountant is (the more experience they have, the more they’ll charge)

But, on average, you can expect an accountant to charge around £150-£300  to file your Self Assessment tax return for you. While this might seem expensive, you could save even more by ensuring you claim tax relief on all your eligible expenses. Additionally, you can also use the extra time you get to focus on growing your business

Hiring an accountant will also give you peace of mind knowing that your tax returns will be done correctly and on time. But if you keep organised records yourself and feel confident in your ability to get it right, you can also choose to file the tax returns yourself.

How can I find an accountant to help with my tax return?

One way to find a reliable accountant is to look for a virtual accounting service. Virtual accountants don’t work from an office and do all their business online. 

Because virtual accountants don’t have any office-related costs, they often charge lower fees than traditional accounting firms. The downside is that your accountant may be based far away from you, meaning they may not be familiar with your area.

Alternatively, you can look for an accounting firm that’s based in your area. Local accountants will not only be familiar with your region but could also meet in person to discuss any concerns or questions you may have. You can also bring any physical records you have in-person to make sure they don’t get lost on the way. 

The downside to local accounting firms is that they usually charge more than virtual accountants.

What records will an accountant need to file my tax return?

If you’ve been staying on top of your bookkeeping and keeping clear records, sometimes all you need to do is send those records to your accountant for them to complete your tax return. But if you haven’t managed to keep your records up to date, your accountant might need you to send them all your business receipts.

If you’re unsure of your total income for the year, you’ll need to share records to help your accountant calculate this figure. This could be your invoices, bank statements, cash receipts, and so on.

To summarise, your accountant will need the following information to complete your tax return:

  • Your employment information – if you run your business as a side hustle and also work for someone else, you will need your P45 or P60 to demonstrate how much tax you have already paid.
  • Any pension income – your accountant will need to know if you’ve received any state pension in the tax year or if you pay towards a private pension. 
  • Business records – you’ll need to share records of all your business’ income, expenses, and taxes deducted.
  • Capital transactions – if you’ve sold, bought, or disposed of any assets and the values included in each transaction.

Save time on tax returns with a simple app 

Designed to help self-employed people save time on financial admin, Countingup is the business current account that comes with free built-in accounting software. It automates the time-consuming aspects of bookkeeping and taxes. Instant invoicing, automatic expense categorisation and cash flow insights mean that you can confidently keep on top of your business finances every day.

Find out more here.