Online Accountant or Traditional Accountant? Fees, Services and What to Check in the UK

In the UK, anyone can call themselves an accountant. The title isn't protected, so the first job when you look for a small business accountant is to check who you are actually hiring. After that, the choice between an online accountant and a traditional one comes down to how complicated your affairs are and how much advice you want alongside the paperwork.

Check who you are hiring

• Professional body membership. Look for membership of a recognised body such as ICAEW, ICAS, ACCA or CIMA, and ask for the membership number. Chartered accountant is a protected title, and bookkeepers may be members of AAT
• Anti-money-laundering registration. Firms that provide accountancy services must be supervised for anti-money-laundering purposes, by HMRC or a professional body. Ask who supervises them
• Professional indemnity insurance, which protects you if they make a costly mistake
• A written engagement letter that sets out what they will and won't do
• A complaints route if something goes wrong

Online or traditional

What accountant fees usually cover, and what is extra

Accountant fees depend on your turnover, the number of transactions, whether you are VAT-registered, whether you run payroll, and how tidy your records are. A package usually includes some of the following, so read the scope carefully:

• Year-end accounts and the Company Tax Return, or your Self Assessment return
• The annual confirmation statement for a limited company
• VAT returns, which are sometimes an extra
• Payroll, often charged per employee
• Bookkeeping, often an extra
• Management accounts and tax planning advice

Things that are commonly outside a standard fee include HMRC enquiries, late-filing problems, research and development claims and Construction Industry Scheme returns. Ask what any extra work would cost before you need it.

Questions to ask

1. What exactly is included, and what is charged extra?
2. Who will be my day-to-day contact, and how quickly do you reply?
3. Do you work with businesses like mine?
4. How do you charge for VAT, payroll and one-off work?
5. Which software do you use, and do I keep access to my data?
6. How will you handle Making Tax Digital? Sole traders and landlords with qualifying income above £50,000 now need it for Income Tax, and the threshold falls to £30,000 in April 2027 and £20,000 in April 2028
7. What is the notice period, and will you help with the handover if I leave?

Do it yourself or pay

A very small sole trader with simple records can often manage with good software. A limited company has more filing duties, so it is worth understanding them first; our guide to setting up a limited company lists them. The advice that tends to repay its fee is the kind that affects decisions: choosing a VAT scheme, claiming expenses properly, and planning tax before the year end rather than after it.

For the software side of bookkeeping, see our guide to small business accounting software with payroll, and for keeping business and personal money apart, the guide to a business bank account.

What to have ready

• Your company number and your Unique Taxpayer Reference, if you have one
• Bank statements and a record of sales and expenses
• Invoices and receipts
• Last year's accounts and tax returns
• VAT and payroll details, if they apply
• Details of loans, assets you have bought, and any money you have put into or taken out of the company

Warning signs

• Promises of guaranteed tax refunds or unusually large savings
• Pressure to claim expenses that aren't genuinely business costs
• No engagement letter, or reluctance to show membership of a professional body or its anti-money-laundering supervision
• A request to pay fees into a personal account
• Suggestions of complicated tax avoidance schemes. HMRC warns about these, and you remain responsible for what is filed in your name