How UK bookkeepers structure their fees

What to take away

UK bookkeeping is priced by the hour, by the month or as a fixed annual fee, and the unit of charge matters more than the headline number.
Transaction volume, the number of bank accounts and how tidy your records are drive most of the variation between quotes.
VAT returns, payroll and software subscriptions are usually separate line items rather than part of a base fee.
A bookkeeper's rate has to cover their own earnings, software and supervision, so the lowest quote rarely covers the same work.
Ask for the assumptions behind a quote in writing, because the invoice gets checked against them later.

Why the unit of charge decides the price

Bookkeepers quote in three main ways: an hourly rate, a monthly retainer or a fixed annual fee. The unit tells you where the risk sits. Hourly pricing passes the risk of slow or messy work to you. A monthly retainer spreads that risk across the year.

Hourly pricing suits a business whose records arrive in bursts, or whose transaction count moves around. You pay for the time actually used. The drawback is that a poorly organised year costs more to repair, and the final bill is unknown when you sign up. If the work later needs accounts preparation or a signature, the difference between an accountant and a bookkeeper decides who can do it.

Monthly retainers suit steady work: an agreed transaction count, one or two bank accounts and a fixed deadline. The fee is predictable, which helps cash flow, but the scope is capped.

How the three fee models compare

The table sets out what each model covers and where the risk sits. No model is cheaper in the abstract: the best fit depends on how predictable your records are.

Three bookkeeping fee models

Hourly

What it covers: Time recorded
Where risk sits: With you
Best for: Bursty records

Monthly retainer

What it covers: Agreed transactions
Where risk sits: Shared
Best for: Steady work

Fixed annual fee

What it covers: Defined task list
Where risk sits: With bookkeeper
Best for: Predictable scope

What it covers

Hourly: Time recorded against your records
Monthly retainer: An agreed transaction count and deadlines
Fixed annual fee: A defined task list for the year

Where the risk sits

Hourly: With you, if records arrive late or messy
Monthly retainer: Shared, with per-item charges above scope
Fixed annual fee: With the bookkeeper, inside the stated scope

An illustrative combined monthly total

The figures below are illustrative, not a market average. They describe a two-director limited company with about 120 transactions a month and a VAT registration.

The amount below is a combined monthly total for the example, not a market average or itemised tariff. A quote for this business is built from four lines, and each one moves with a different driver:

Core bookkeepingbank reconciliation and coding for about 120 transactions a month, priced by the transaction count and the number of bank accounts.
VATpreparing the quarterly return from the same records, so the work peaks once a quarter even when the fee is spread monthly.
Payrollone monthly run for the two directors, priced per payslip or per run.
Softwarethe Making Tax Digital compatible subscription, either included by the bookkeeper or bought by the business.

Illustrative monthly bookkeeping costs

£180 | Base bookkeeping
£20 | VAT returns
£24 | Payroll
£30 | MTD software

Change one assumption and the total moves. A second bank account, or a quarter of receipts unsorted, pushes the hours up first.

The add-ons that change the monthly number

VAT is the most common add-on. Once registered, a business usually files quarterly, and the bookkeeping behind each return has to match the period. HMRC sets out the deadlines, and what a nil return still requires, in its guidance on sending a VAT Return: the online return is usually due one calendar month and 7 days after the end of the accounting period, which is also the deadline for paying. A bookkeeper who prices VAT separately is pricing that quarterly deadline work.

Payroll is priced per payslip, per month, or as part of a package. A weekly payroll for six staff takes more time than a monthly payroll for two, because submissions and checks scale with headcount. Any quote should cover the employer payroll tasks listed by GOV.UK: recording pay, calculating deductions such as tax and National Insurance, producing payslips and reporting each payment to HMRC in a Full Payment Submission on or before payday.

Software is the quietest line in a quote. Making Tax Digital for VAT needs compatible record-keeping software, and the MTD for VAT rules set out what that software must do. Some firms include a licence, others expect you to buy one. Price the subscription separately, and check which tools fit your transaction volume in this comparison of bookkeeping software.

What a fee should buy in supervision

Part of a bookkeeper's fee pays for anti-money laundering supervision. GOV.UK lists professional bookkeeping services among the work of accountancy service providers, who must register with HMRC unless they are already supervised by a professional body. The main supervisory bodies named by HMRC include the Association of Accounting Technicians, the Institute of Certified Bookkeepers and the Institute of Accountants and Bookkeepers. Before you compare two quotes, ask each bookkeeper which body supervises them, because a fee from an unsupervised provider is not like for like.

Common questions

These answers cover the questions small businesses most often ask when a bookkeeping quote arrives.

Is it cheaper to do my own bookkeeping?

In cash, usually yes; in time, rarely. Deadlines and penalties stay the same, and repair work later often costs more than routine bookkeeping would have.

How much does a bookkeeper charge per hour in the UK?

Freelance bookkeepers in the UK typically charge £20–50 per hour, while monthly retainers range from £50 for sole traders to £700+ for growing businesses, according to Xero's UK fee guidance. Rates vary with region, experience and whether the bookkeeper is supervised by an accountant. Rather than rely on a national average, ask three local firms for their hourly rate and what it includes.

Do I pay less if I supply my own software?

Sometimes. Buying your own licence can remove a markup, but it also moves setup and troubleshooting onto you. Agree in writing who fixes problems and whether support time is chargeable.

Can I move from hourly billing to a fixed fee?

Often, once your records are consistent. Two or three clean months give a bookkeeper enough evidence to price a fixed fee, because the transaction count and the number of accounts are known.