One of the first questions we hear from sole traders who are thinking about hiring an accountant is: how much should I actually be paying? It’s a fair question, and the answer is less straightforward than most fee guides suggest. Sole trader accountant fees range from under £200 a year for a bare-bones self-assessment return to well over £1,500 a year for a more complete service that includes bookkeeping, VAT, and proactive tax advice.

The range is wide because the service varies enormously. A self-assessment return filed from a tidy spreadsheet takes far less time than one prepared from a year’s worth of unreconciled bank transactions. That’s not a sales pitch — it’s just how accountancy pricing works in practice.

This post walks through the main fee structures you’ll encounter, what affects the price, and a few things that are worth clarifying before you sign up with anyone.

Sole trader accounting fees fall broadly into two categories: one-off services and ongoing monthly arrangements. For most straightforward businesses, here’s what you can expect.

A self-assessment tax return prepared by an accountant typically costs between £150 and £400 per year. The lower end applies to simple cases — employed income with modest self-employment earnings on the side, for example. The higher end reflects more complexity: multiple income streams, significant business expenses, rental income, or capital gains.

If you want annual accounts prepared alongside the tax return — a more complete picture of your trading year — fees tend to sit between £300 and £800. Bear in mind that sole trader accounts aren’t legally required in the same way limited company accounts are, but they’re genuinely useful for mortgage applications, loan applications, and understanding your business performance.

For an ongoing monthly package covering bookkeeping, quarterly VAT returns, and self-assessment, you’d typically be looking at £50–£150 per month. What sits in that range depends on your turnover, the volume of transactions, and whether VAT is involved. If your books are clean and your volume is low, you’ll be at the lower end. Higher-turnover businesses with more moving parts will sit higher.

Outside London, fees tend to be more competitive. London-based firms often charge 20–40% more than firms elsewhere — which is worth bearing in mind if you’re open to working with a remote accountant.

Accountants price based on time, and time is driven almost entirely by complexity and how organised your records are. A few things consistently push sole trader fees higher.

Volume of transactions

A freelance consultant invoicing ten clients a month is a very different job to a sole trader running a small retail or trade business with hundreds of purchases, supplier invoices, and cash transactions. More transactions mean more bookkeeping time, which means higher fees.

VAT registration

Once you cross the VAT registration threshold (currently £90,000 turnover), quarterly VAT returns become part of the picture. Each return takes time to prepare and review, so this adds meaningfully to annual costs. Under Making Tax Digital for VAT, returns must be submitted through compatible software — another reason cloud bookkeeping has become the norm.

Mixed income sources

Sole traders with rental income, investments, or income from employment alongside their self-employment have more complex returns. Each additional income source adds time.

Late or disorganised records

This one is worth saying plainly: if your records are a mess, your accountant will spend longer sorting them out. Some firms charge a separate catch-up fee; others build it into the annual bill. Either way, good bookkeeping habits lower your accountancy costs over time.

If you’re not sure whether your bookkeeping is in good shape, it’s worth having an honest conversation before agreeing a fee — rather than discovering the problem when the invoice arrives.

Yes — with one nuance worth understanding. Accountancy fees are an allowable business expense for sole traders, provided they’re incurred wholly and exclusively for the trade. That covers bookkeeping, preparing your annual accounts, and general tax advice related to your business.

The nuance: HMRC’s position is that the portion of your accountant’s fee attributable to preparing and filing your personal self-assessment return is not deductible. The logic is that the personal tax return is a personal obligation, not a business one. In practice, many accountants don’t split this out on their invoices, but if yours does, only the business-related portion should go through as an expense.

If your accountant handles both personal and business work on the same invoice, you’re entitled to claim the business portion only. In most cases for a straightforward sole trader, the vast majority of the fee is legitimately deductible — so don’t be put off by the nuance.

The practical effect is that a £600 annual fee costs you less in real terms after tax relief. For a basic-rate taxpayer, the effective cost after the deduction is £420. For a higher-rate taxpayer, it’s closer to £360. That’s worth keeping in mind when you’re comparing fees — the headline number isn’t quite the number that comes out of your pocket.

Making Tax Digital for Income Tax (MTD for ITSA) is the next major change to how sole traders report their income to HMRC. Instead of a single annual self-assessment return, you’ll be required to submit quarterly updates digitally, plus a final end-of-year declaration.

The rollout is phased. From April 2026, it applies to sole traders with income over £50,000. From April 2027, the threshold drops to £30,000. From April 2028, to £20,000. If your income is below those thresholds for now, you have some time — but the direction of travel is clear.

Why does this matter for fees? More reporting means more accountant time. A quarterly filing cycle is fundamentally different to an annual one, and firms that currently handle your accounts once a year will need to move to a more active, ongoing relationship. That’s likely to push costs up for some sole traders who are currently on minimal annual arrangements.

The flip side is that quarterly reporting should mean fewer surprises at year-end. If your bookkeeping is up to date and submitted quarterly, your accountant can spot issues as they arise rather than discovering them in January. For businesses that are currently chaotic at year-end, the discipline MTD forces could actually reduce catch-up costs.

The honest answer is that if you’re approaching any of the income thresholds, now is a sensible time to move onto a proper cloud bookkeeping setup — rather than waiting until you’re required to.

Most accountants for sole traders now offer fixed-fee pricing rather than hourly billing, and we think that’s the right model for most clients. With a fixed fee, you know what you’re paying upfront, you’re not penalised for asking questions, and your accountant has an incentive to work efficiently rather than clock hours.

Hourly rates for qualified UK accountants typically sit between £50 and £150 per hour. For a simple tax return, that might sound attractive — but for anything with any complexity, an open-ended hourly arrangement can produce surprises. If your accountant charges by the hour and your records are disorganised, you’re paying for the disorganisation directly.

When comparing fixed-fee quotes, look carefully at what’s included. Some firms quote a low headline figure for the self-assessment return alone, then charge separately for any advice, bookkeeping review, or correspondence with HMRC. Others bundle everything into a single monthly retainer. Neither model is inherently better, but knowing what’s in scope before you start avoids friction later.

Ask specifically: is HMRC correspondence included? What happens if there’s an enquiry? Is phone or email support part of the fee? These aren’t gotcha questions — any decent firm will answer them clearly.