How Much Do Accountants Charge to Prepare Financial Statements in the UK?
Preparing financial statements is a crucial task for businesses, ensuring compliance with legal requirements and providing insights into financial performance. However, the cost of hiring an accountant to prepare these statements varies widely depending on several factors.
By the end, you’ll have a clear understanding of what to expect when hiring an accountant for financial statement preparation in the UK.
Average Costs of Financial Statement Preparation in the UK
The cost of preparing financial statements in the UK depends on the business size, complexity, and the accountant’s expertise. Here’s a general breakdown:
Sole Traders & Micro Businesses
- Basic financial statements (Profit & Loss, Balance Sheet): £300 – £800
- Including tax return filing: £500 – £1,200
Small to Medium-Sized Businesses (SMEs)
- Basic financial statements: £800 – £2,500
- Full statutory accounts (for limited companies): £1,200 – £3,500
- Including corporation tax return: £1,500 – £4,000
Large Companies & Complex Businesses
- Full financial statements with detailed reporting: £3,500 – £10,000+
- Audited financial statements (if required): £5,000 – £20,000+
These are rough estimates—actual costs depend on factors like transaction volume, industry, and additional services required.
Accountant Fees for Financial Statement Preparation in the UK
| Business Type | Type of Financial Statements | Average Cost (£) | Additional Services (Cost Range) |
| Sole Traders | Basic Profit & Loss + Balance Sheet | £300 – £800 | Tax Return (+£200 – £500) |
| Freelancers / Self-Employed | Simple Income & Expense Reporting | £400 – £1,000 | VAT Returns (+£150 – £400) |
| Micro Businesses (<10 employees) | Unaudited Accounts (Cash Basis) | £500 – £1,500 | Payroll Processing (+£300 – £800) |
| Small Limited Companies | Statutory Accounts (Abridged) | £1,200 – £2,500 | Corporation Tax Return (+£300 – £700) |
| Medium-Sized Companies | Full Statutory Accounts (FRS 102 Compliant) | £2,500 – £5,000 | Management Accounts (+£1,000 – £3,000) |
| Large Companies | Complex Financial Statements (Audit Required) | £5,000 – £20,000+ | Group Accounts (+£3,000 – £10,000) |
| Charities & Non-Profits | Charity Accounts (SORP Compliant) | £1,500 – £6,000 | Independent Examination (+£800 – £2,500) |
| Startups (First-Year Accounts) | First-Year Statutory Filing | £800 – £2,500 | R&D Tax Claims (+£500 – £2,000) |
Additional Cost Factors
|
Factor |
Impact on Cost |
|
Business Complexity |
More transactions = Higher fees (£1,000 – £5,000+) |
|
Accountant’s Experience |
Big 4 firms (£150 – £500/hr) vs. Freelancers (£30 – £150/hr) |
What Are Financial Statements?
Financial statements are formal records that summarize a business’s financial activities, position, and performance over a specific period. They are essential for decision-making, tax compliance, investor relations, and legal reporting.
In the UK, businesses (especially limited companies) must prepare financial statements to comply with Companies House and HMRC regulations.
Who Needs Financial Statements?
|
Business Type |
Requirement |
|
Limited Companies |
Must file with Companies House & HMRC (annual accounts). |
|
Sole Traders |
Not legally required, but needed for tax returns (Self Assessment). |
|
Partnerships |
Recommended for tax and loan applications. |
|
Charities |
Must follow SORP (Charity Accounting Rules). |
|
Investors & Lenders |
Used to assess creditworthiness and growth potential. |
Types of Financial Statements
There are three core financial statements, each serving a different purpose:
Balance Sheet (Statement of Financial Position)
- What it shows: A company’s assets, liabilities, and equity at a specific point in time.
- Key components:
- Assets (what the business owns) – Cash, inventory, property.
- Liabilities (what the business owes) – Loans, unpaid bills.
- Equity (owner’s/shareholder’s stake) – Retained earnings, share capital.
- Why it matters: Indicates financial health and solvency.
Profit & Loss Statement (Income Statement)
- What it shows: The company’s revenue, expenses, and profit/loss over a period (e.g., monthly, yearly).
- Key components:
- Revenue (sales, services)
- Expenses (salaries, rent, utilities)
- Net Profit/Loss (Revenue – Expenses)
- Why it matters: Measures profitability and operational efficiency.
Cash Flow Statement
- What it shows: How cash enters and exits the business.
- Key sections:
- Operating activities (day-to-day business cash flow)
- Investing activities (purchases/sales of assets)
- Financing activities (loans, dividends, equity changes)
- Why it matters: Helps track liquidity and cash management.
(Some businesses also prepare a Statement of Changes in Equity, showing how ownership stakes shift over time.)
Why Are Financial Statements Important?
✔ Legal Compliance – Avoid fines for late/missing filings.
✔ Tax Calculations – Determine corporation tax, VAT, and income tax.
✔ Business Decisions – Identify profit trends, cash shortages, and growth areas.
✔ Investor & Lender Confidence – Essential for securing loans or investments.
Example: A Small UK Business’s Financial Statements
Business: “Brighton Café Ltd” (Small Limited Company)
- Balance Sheet: Shows £50,000 in assets (coffee machines, cash) and £20,000 in liabilities (bank loan).
- Profit & Loss: Revenue (£200,000), Expenses (£150,000), Net Profit (£50,000).
- Cash Flow: Reveals seasonal dips in cash (e.g., slower winter months).