What a fixed fee accountant should include, and what quietly sits outside it

Start with the work that has a deadline attached to it. For a limited company that means year-end accounts, the corporation tax return, VAT returns if you are registered, payroll and auto-enrolment if anyone is on the books, and the director’s own Self Assessment. ACCA’s own guidance on fixed fee billing treats annual accounts and tax returns as the core services that belong in a package, and we agree.

The director’s personal tax return is the one most often left out. The company accounts get quoted, the personal return gets mentioned in January as a separate job. Since how you pay yourself and what the company pays are two halves of the same decision, splitting them across two invoices makes no sense to us.

Bookkeeping is the second gap. AccountingWEB threads on transparent fee structures keep coming back to the same point: whether bookkeeping is included is the detail most proposals leave vague. If your fee letter says “year-end accounts prepared from your records”, ask who is making those records usable. On high volume e-commerce accounts that question is the whole fee.

Everything in this list has a date HMRC or Companies House expects. If a date is involved, it should be inside the fixed fee.

Compliance tells you what happened. It arrives months after you could have done anything about it. The part of a fixed fee that actually changes your bottom line is the advice given while the year is still running.

For an online seller that means somebody looking at whether flat rate still suits you now that a real share of your sales go overseas. We moved a watch seller with around 70 per cent overseas sales off flat rate onto the standard scheme; she now pays VAT on the UK portion only and reclaims her input VAT. That conversation cost nothing extra. It was simply part of looking at the business properly.

For a professional services director it means the salary and dividend mix, whether a spouse should be on the payroll, and the £10,500 employment allowance that single-director companies cannot claim. For a funded founder it means somebody raising SEIS before the raise rather than after it.

None of this is exotic work. It is the obvious question asked at the right time. A fixed fee that excludes it is cheap for a reason.

A fixed fee is not a season ticket for unlimited work, and any firm pretending otherwise is either building the cost in somewhere or will resent you by March.

These things reasonably sit outside the agreed scope and should be quoted separately, in writing, before anyone starts:

• A one-off project with its own deliverable, such as an R&D claim, a patent box application or SEIS and EIS advance assurance.
• A company valuation, or support on a sale or acquisition.
• Cleaning up years of previous filings that were wrong before you arrived.
• Non-executive director or fractional CFO work, which is an ongoing role rather than a service line.

The test is whether the work is predictable. Your VAT returns are predictable; four years of unreconciled CIS deductions are not. What should never happen is the quiet reclassification of ordinary work as extra. A phone call in August asking whether you can afford a hire is not a project. It is the reason you pay an accountant monthly.

Our position: anything outside the fee gets its own written figure before work begins, and you decide.

There are two ways a monthly fixed fee works, and firms rarely explain which one you are signing.

The first is instalments. You are paying for an annual service in twelve parts, so if you leave halfway through, the sums are reconciled. The second is a subscription. You pay monthly for monthly service, and nothing is refunded if you leave. Practitioners on AccountingWEB draw the same distinction, and they are right that it matters most at the point somebody wants to go.

We work monthly because the service is monthly. Bookkeeping, VAT, payroll and the questions in between happen all year, not in a fortnight after your year end.

The other thing worth asking about is arrears. Some firms do the year’s work first and start collecting afterwards. That leaves you owing a lump sum and leaves them chasing it, which sours a relationship quickly. We would rather the payments match the work.

Ask the question directly: if I leave in month seven, where do we stand. A firm with a clean answer has thought about it.

Before you agree to anything, put these to the firm in writing and read the reply carefully.

1. Is the director’s personal tax return inside the fee, or billed separately in January?
2. Who does the bookkeeping, and what happens if my transaction volume doubles this year?
3. Is there an hourly rate anywhere in this agreement, and if so, what triggers it?
4. What would you charge extra for, and will I know the figure before the work starts?
5. Will the fee change next year, and on what basis?

That last one causes more irritation than the fee itself. Directors do not mind paying a sensible price in line with other firms. They mind the same standard compliance work costing a different amount every year with no explanation.

We agree the fee in writing before any work starts. No hourly billing and no surprise invoices. If the scope changes because your business changed, we tell you what the new figure is and you decide whether to go ahead. That is the whole arrangement, and it fits on one page.