How Much Does an Accountant Cost for a Sole Trader?

A straightforward sole trader Self Assessment return is a low-hundreds fixed fee, not a four-figure one. The number moves with turnover, VAT registration, how clean your records are, and — new since 6 April 2026 — whether you are inside Making Tax Digital for Income Tax and therefore need quarterly updates filed as well as a return.

The bigger problem is that almost every price list you will find online is quoting for something else.

Most published accountancy prices are limited company prices

Search for accountancy fees and you get numbers built around a company: annual accounts, a CT600 Corporation Tax return, a confirmation statement, director payroll, and often a director’s personal return on top. That is four or five deliverables.

A sole trader normally buys one: a Self Assessment return with the self-employment pages. Under MTD for Income Tax it becomes five submissions — four quarterly updates and a year-end return — but it is still one business, one set of records and one tax computation.

Do not anchor your expectations on a company quote. These prices, all verified from provider pricing pages on 20 August 2026, are for limited company work and are included here only so you can recognise them for what they are.

Two things are worth reading off that table before you dismiss it.

VAT registration alone is a 27% step change. Taxfix charges £329 + VAT for a non-VAT-registered company and £419 + VAT once it is registered. Nothing else about the business has changed. The same logic applies to a sole trader: registering for VAT adds four returns a year and a reconciliation obligation, and the fee reflects it.

How you hand over your records moves the price by 65%. Mazuma’s ladder runs £575 inc VAT from a trial balance, £700 inc VAT from electronic records, £950 inc VAT from a bag of paperwork. That gap is your bookkeeping, priced by someone else.

Prices that genuinely apply to a sole trader

QuickBooks also publishes entry-level plans; check the current figure directly, because it moves with promotional pricing.

The FreeAgent figure you have probably read is the wrong one. FreeAgent prices by business structure rather than feature tier: £10 unincorporated landlord, £19 sole trader, £27 partnership or LLP, £33 limited company, all excluding VAT. The £33 that circulates in most comparison articles is the limited company tier. A sole trader pays £19.

Xero’s UK prices rose on 1 September 2026. The figures above are the post-increase ones — Simple unchanged at £7, Ignite up from £16 to £18, both excluding VAT. If you are not VAT registered, Simple is the relevant plan and £7 is the number, not £16 or £18.

Check what an entry tier actually includes before you compare. Published “from” prices are the cheapest tier a provider offers, and providers scope those tiers differently — some to sole traders, some to micro limited companies, some with transaction caps. A £38 headline that excludes VAT returns is not cheaper than a £60 one that includes them.

Never compare an inclusive figure with an exclusive one — and check, because one provider can use both. Mazuma quotes its monthly subscriptions plus VAT and its one-off accounts packages inclusive of VAT: two bases on two pages. Put the two entry subscriptions on the same footing and the gap is small. At 20%, £38 + VAT is £45.60 against £47.40 for £39.50 + VAT — £1.80 a month between them, not the difference the headline figures imply.

The five things that move a sole trader’s fee

Turnover. Most fixed-fee firms band by turnover. Crossing a band boundary costs more than the extra work usually justifies, so ask where the bands sit.

Transaction volume. A consultant issuing 12 invoices a year and a market trader taking 300 card payments a week have the same tax return and completely different bookkeeping.

VAT registration. Compulsory once taxable turnover passes £90,000 on a rolling 12-month basis. It adds four MTD VAT returns a year.

Records quality and backlog. Late years cost more than current ones, and providers charge for them separately — backdated work is commonly priced per financial year on top of the ongoing fee.

MTD for Income Tax. Live from 6 April 2026 for sole traders and landlords with qualifying income over £50,000, measured on the 2024/25 return. The £30,000 tier follows on 6 April 2027 and the £20,000 tier on 6 April 2028. In scope means digital records, quarterly updates by 7 August, 7 November, 7 February and 7 May, and a year-end return.

MTD has removed the free DIY route for anyone in scope

This is the cost change most articles have missed. If you are not in MTD for Income Tax you can still file a Self Assessment return through HMRC’s own free online service. If you are in MTD, you cannot: HMRC requires you or your agent to use commercial software that works with the service to create digital records, send quarterly updates and submit the return.

So the honest comparison for someone inside MTD is not “accountant versus free”. It is “accountant versus software subscription plus your own time, five times a year”. Entry-level compatible software starts in the low tens of pounds a month; free products exist for simple affairs but usually cap transactions.

Fixed fee or hourly

Ask for the basis in writing before you engage. An hourly rate turns every question you ask into a cost, which is exactly when clients stop asking questions. A fixed fee prices the outcome, which is what you actually want to buy.

What a fixed quote should specify: which tax years it covers, whether quarterly MTD updates are included or extra, whether VAT returns are included, what happens if records arrive late or incomplete, and what an amended return costs.

SmartFiling prices Self Assessment and MTD for Income Tax on a fixed fee, with turnaround of three weeks from receiving your records and every submission reviewed by an ICAEW Chartered Accountant. An express option is available at £150, subject to availability.

Frequently asked questions

Is it worth paying an accountant if my sole trader business is small?
It depends on what you would otherwise get wrong. The common ones are missing allowable expenses, choosing the trading allowance when actual expenses would have been better, and being caught out by payments on account. If your affairs are genuinely simple and you are not in MTD for Income Tax, HMRC’s free filing service is a reasonable option.

Why is a company quote so much higher than a sole trader quote?
Because it covers more work. A company needs annual accounts, a CT600 Corporation Tax return, a confirmation statement and usually RTI payroll, plus the director’s own return. A sole trader needs a Self Assessment return, or under MTD four quarterly updates and a year-end return.

Does registering for VAT increase my accountancy fee?
Yes, and materially. One provider’s published prices rise from £329 + VAT to £419 + VAT for the same business purely on VAT registration — a 27% increase. VAT registration is compulsory once taxable turnover passes £90,000 on a rolling 12-month basis.

Can I claim my accountant’s fee as a business expense?
Fees for preparing your business accounts and the self-employment part of your return are normally allowable against trading profits. Costs relating purely to your personal tax affairs are not. If a single fee covers both, it should be apportioned.

Do I need to pay for software as well as an accountant?
If you are inside MTD for Income Tax, compatible software is mandatory — but your accountant may include it, or file using their own. Ask before you buy your own subscription. If you are not yet in MTD, software is optional.

Getting a straight number

The fastest way to a real quote is to say four things up front: your turnover, whether you are VAT registered, roughly how many transactions a month you have, and whether you are already in MTD for Income Tax. Any firm that cannot price from that is going to price by the hour.

SmartFiling handles Self Assessment and MTD for Income Tax on a fixed fee, including quarterly updates where MTD applies and the year-end return. Every submission is reviewed by an ICAEW Chartered Accountant, and turnaround is three weeks from receiving your records.