MIP - What fees to charge?

Hi - What fees do people charge their clients? I don't want to under charge or over charge.
I am thinking of doing vat returns, bookkeeping, payroll, tax returns, management accounting and financial accounting.


  • Buhir_the_Bookkeeper
    Buhir_the_Bookkeeper Registered Posts: 36 Regular contributor ⭐ ? ⭐
    Hi Trina

    A few different pointers to help.

    Have a look at industry standard. A qualified bookkeper / accountant will charge more than a non-qualified. AAT qualified is a higher rate than a bookkeeper with industry experience etc.

    When starting a new client the work always takes longer to get up to speed and in good order so you can carry it on in a normal fashion moving forward. So with books that look messy I would offer to charge hourly for the first few months or the first quarter then tell them you would like to offer them a fixed fee moving forward after that.

    Always be very clear about the fees from the start of the assignment and put an agreement in writing as many clients will make an issue after receiving there first invoice if they are not expecting such a bill.

    Fixed fees are also very useful. if you know you want to earn 30.00phr and the job will take four hours charge £120.00 for the job. Another very useful tool is monthly standing order. If you know expected regular work over the year. split the fee into twelve months and ask the client to pay you a fixed monthly amount. This way you have regular income. The client has no surprises with fees and it is like a retainer as the client will not leave you if they are already paying you monthly. Then for odd one off jobs that the client wants charge your normal hourly rate.

    Take the following scenario into account overall in a year if you earn £1000 as fee income from clients you actually only take home 450.00 that is 45% of your charge out rate. So if you are charging an average of £30.00 per hour you take home an average of £13.50 per hour. Forgive the approximates but I hope it gives you an idea of whats left over. This is evend out as Financial & management accounts & tax returns fee income is way over 30.00 per hour and bookkeeping can go as low as 16.00phr.

    Fee Income £1000
    All Practice Overheads 30% £-300.00
    Approximate Tax 25% £-250.00

    Profit after tax £450.00

    In relation to fees charge different fees for different levels of work. I group as follows

    Vat returns - Charge the hourly rate for bookkeeping to prepare all the paperwork ready for the vat return then charge a slightly higher rate to complete, reconcile, file and order the vat return. Usually 85% of the time is spent in preparing the bookkeeping before doing the final vat cheking & filing.

    Bookkeeping anywhere between £16.50 and £30.00phr depending on the complexity of the job and location of the client. High street corporates charge more but your competition will charge less.

    Payroll. Usually takes 30 mins to 1 hour to set up each staff member then 5.00 per payslip for paper copies or 4.00 per payslip for online copies emailed to client.

    Tax returns between 75.00 and 200.00 depending on the complexity. These can take from 30 mins to three hours to complete and file. Software helps but is expensive when starting off Charge the client a separate fee to do the accounts and paperwork before completing the tax return. Then a separate fee to complete the tax return.

    Management accounting again charge a higher fixed rate than bookkeeping. Once you have completed the monthly bookkeeping. The element of management accouting reporting takes another 20% of your time. So charge a higher rate for that extra portion of time.

    Financial accounting varies on the complexity and messiness of the clients records. Really, you want to bill upwards of £40.00phr for this work to compensate for charging lower rates on bookkeeping. As a rule of thumb sole trader accounts between £300 & £600 depending on size and complexity. Vat registered are more expensive as take more time.

    Ltd companies £500.00 to £2000 again depending on size, complexity, messiness of records.

    Always be clear how much you are charging before you start work to ensure payment as expected. Have a look around at the competition. Ask the client for a look at their last years invoice to see what they were previously being charged.

    I used to charge as much as is possible when I started out but lost a lot of clients this way. Then I changed my fee structure to reasonable and fair costs, which covered my overheads and gave me the profit that I required. I now have a much higher retention rate. Beware billing too low to get your foot in the door as its difficult to increase the price very much each year once you have started at such a low level.

    There are lots of good articles on a forum called accouting web regarding how to charge clients. Also look for a forum by an industry expert Book Mark Lee you will also find good information on how to deal with clients. Type into google accouting web what to charge clients and lots will come up.

    Good luck from Buhir the accountant and bookkeeper in Bristol and Cardiff. Please bear in mind these figures are not exact and you always need to look at what you actually want to take home and is realistic for the client and at the same time ensure you keep the work. If you bill too low you will be working too many long hours and not make enough money. If you bill to high you migh have a few clients but not keep them very long?
    Claire R
  • Trina_16uk
    Trina_16uk Registered Posts: 4
    Thank you for your help. You have given me a great starting point as to what to charge.
  • MarieNoelle
    MarieNoelle Moderator, MAAT, AAT Licensed Accountant Posts: 1,369
    Hi Trina
    This thread might also give you some ideas of fees to charge.
  • burg
    burg Moderator, FMAAT, AAT Licensed Accountant Posts: 1,441
    Trina the thread linked above to is useful and I have taken part in a few surveys over the years. This led me to think maybe it's time for a new survey which I'm happy to conduct.
    Some details are in the linked thread above.


  • David Ballantyne
    David Ballantyne Registered Posts: 105 New contributor ?
  • Trina_16uk
    Trina_16uk Registered Posts: 4
    Thank you for all your help. Ian if you are conducting a new survey I would like to have a copy please. Thanks
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