A UK small business typically pays a bookkeeper between £20 and £45 an hour, or £100 to £500 a month on a fixed retainer. Per-transaction pricing, where it is offered, commonly runs from about £0.50 to £2.00 per item. Those are observed market ranges taken from advertised pricing on UK bookkeeping and accountancy practice websites and from what we see quoted in practice. There is no official price index for UK bookkeeping, so no honest guide can give you a single national average, and any article that does is inventing one.
What actually sets your price is not turnover. It is transaction volume, VAT status, and how much of the record capture is already automated. A consultancy invoicing four clients a month costs a fraction of what a café with daily takings, weekly supplier deliveries and a card terminal costs, even at identical turnover. This guide breaks down the three pricing models, shows where in-house stops being more expensive than outsourced, and sets out what Making Tax Digital for Income Tax adds to the bill from 6 April 2026.
The Three Pricing Models, and When Each One Wins
Almost every UK bookkeeping quote you receive will use one of three structures. They are not interchangeable, and the cheapest one depends entirely on how predictable your business is.
| Model | Typical observed range | Best suited to | Main risk |
|---|---|---|---|
| Hourly | £20 to £45 per hour | Ad hoc work, catch-up jobs, businesses with erratic volume | Open-ended bill. No incentive for the bookkeeper to work faster. |
| Fixed monthly retainer | £100 to £500 per month | Steady businesses wanting a predictable cost line | Priced against an assumed volume band. Exceed it and the fee is reviewed. |
| Per transaction | £0.50 to £2.00 per item | Seasonal or spiky volume (retail, events, ecommerce) | Definition of "transaction" varies. Get it in writing. |
| Catch-up or rescue work | £30 to £60 per hour | Businesses several months or years behind | Often quoted per hour precisely because the scope is unknown. |
Retainers dominate for a reason. Both sides prefer a known number, and a bookkeeper who has priced a job properly is usually cheaper on a retainer than the same work billed by the hour, because they are not padding for uncertainty.
The trap in per-transaction pricing is the definition. Some practices count a bank line as one transaction. Others count the bank line and the matching invoice as two. On 1,000 items a month that distinction is the difference between £500 and £1,000. Ask before you sign.
What Actually Drives Your Price
Four factors do most of the work.
- Transaction volume. The single biggest driver. Bookkeeping is per-item work, so 900 lines costs roughly ten times what 90 lines costs, regardless of the pounds involved.
- VAT registration. Once you cross the £90,000 rolling twelve-month VAT registration threshold, quarterly returns, partial exemption checks and correct rate coding all enter scope. Expect this to add materially to a quote.
- Payroll. Usually priced separately, commonly per payslip per month, and a genuinely different discipline. Real Time Information submissions and P32 reconciliation are not bookkeeping.
- State of the records. A business handing over a clean Xero file with connected bank feeds and Dext capture costs far less than one handing over a carrier bag. Rescue work is priced accordingly.
Location matters less than people expect. A cloud bookkeeper working from Sheffield can service a business in Soho, and most do. Where geography still bites is in-house hiring, and in practices that operate purely face to face.
Bookkeeper or Accountant: What You Are Actually Buying
The line matters because paying the wrong rate for the wrong work is the most common way small businesses overspend here. A bookkeeper maintains the records: bank reconciliation, sales and purchase ledgers, expense coding, VAT return preparation, credit control. An accountant takes those records and produces the statutory outputs: annual accounts filed at Companies House, the CT600 corporation tax return, the SA100 and SA103 self assessment pages, and advice on structure, remuneration and reliefs.
If your accountant charges £150 an hour and spends five hours a month doing data entry, you are paying £750 for work a bookkeeper would do for £150. That is the crossover most businesses miss. Our bookkeeping and compliance guides go into the split in more detail, and the underlying record-keeping duty is not optional: Companies Act 2006 s.386 requires every company to keep records that show and explain its transactions.
As ICAEW qualified accountants, the pattern we see work best in small companies is a bookkeeper monthly through the year and an accountant at year-end, with one conversation between them in month ten so nothing surprises anyone in month twelve.
In-House, Outsourced or Software: Where the Lines Cross
The in-house comparison is usually done wrong, because people compare a salary to a fee and forget the on-costs. Take a bookkeeper on £28,000:
| Cost element | Annual amount | Basis |
|---|---|---|
| Gross salary | £28,000 | Assumed full-time salary |
| Employer National Insurance | £3,450 | 15% on earnings above the £5,000 secondary threshold |
| Auto-enrolment pension (employer minimum) | £653 | 3% of qualifying earnings (£6,240 to £50,270 band) |
| Fully loaded cost | £32,103 | Before software, equipment, holiday or sickness cover |
Two caveats. If the company is eligible for the Employment Allowance (up to £10,500, with single-director companies excluded), that employer NI figure may be covered, which materially changes the comparison for a business already running payroll. And the £32,103 buys you one person with no cover: holiday, sickness and resignation are your problem, not a supplier's.
Against that, outsourced bookkeeping at £500 a month is £6,000 a year. The lines cross somewhere around 20 to 25 hours of genuine weekly work, which for most small businesses means a few hundred transactions a week before an in-house hire makes arithmetic sense.
Software sits below both. Entry-level cloud bookkeeping subscriptions (Xero, QuickBooks, FreeAgent, Sage Accounting) typically run in the region of £10 to £35 a month plus VAT depending on tier, and list prices are revised most years, so check the vendor's current pricing page rather than any figure in an article. Software plus your own time is the cheapest option right up until your time is worth more than £30 an hour, at which point it stops being cheap and starts being a hobby.
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What Making Tax Digital Adds From April 2026
This is the change most likely to move your bookkeeping bill in the next three years. Making Tax Digital for Income Tax becomes mandatory in phases, based on qualifying income (gross self-employment plus property income, before expenses):
- 6 April 2026: qualifying income above £50,000 (tested on the 2024/25 tax year)
- 6 April 2027: qualifying income above £30,000 (tested on 2025/26)
- 6 April 2028: qualifying income above £20,000 (tested on 2026/27)
Partnerships are in scope at a later date that HMRC has not yet set. The practical effect is that records must be digital and updates go to HMRC quarterly, followed by a final declaration. That converts bookkeeping from an annual chore into a quarterly discipline.
Where a business already keeps monthly records in compatible software, the incremental cost is often just the submissions themselves. Where a business has been dropping a bag of receipts on someone in January, the cost rises, sometimes sharply, because the work that used to be compressed into one messy job now has to happen four times a year properly. Our VAT and Making Tax Digital section covers the software and submission mechanics; the sole trader guides cover which income counts toward the threshold.
Three Worked Profiles
A Sheffield landscaping sole trader, £68,400 turnover, around 90 transactions a month, not VAT-registered. Roughly three to five hours of bookkeeping monthly. Expect £120 to £200 a month on a retainer. Qualifying income above £50,000 puts this business in Making Tax Digital for Income Tax from 6 April 2026, so quarterly updates should be priced in now rather than discovered in April.
A two-director consultancy near Newcastle Quayside, £197,600 turnover, VAT-registered, around 60 transactions a month. Low volume, higher complexity. Bookkeeping here is often £150 to £300 a month, with the VAT return the main driver rather than the transaction count. The bigger spend for this business is accountancy, not bookkeeping, because dividend planning and the CT600 matter more than data entry.
A Leeds Dock ecommerce limited company, £412,000 turnover, around 1,100 transactions a month across two marketplaces. Fifteen to 25 hours monthly, so roughly £450 to £900 depending on how much marketplace settlement reconciliation is involved. Marketplace payouts are the cost driver: a single monthly payout hiding 400 orders, fees and refunds is more work than 400 clean bank lines, not less.
How to Compare Quotes Without Getting Caught
Three questions separate a real quote from a headline number.
- What volume is this priced against, and what happens if I exceed it? Most retainers assume a band. Get the band and the review trigger in writing.
- Is the year-end handover pack included? This is the most commonly excluded item and the most expensive to buy later, because your accountant rebuilds it at accountancy rates.
- Who owns the software subscription? If the bookkeeper owns your Xero file, moving practices becomes their decision as much as yours.
Also check qualification. Bookkeeping is not a reserved activity in the UK, so anyone can call themselves a bookkeeper, but anyone providing bookkeeping services in business must be supervised for anti-money-laundering purposes, either by a professional body (ICB, AAT, ICAEW, ACCA) or directly by HMRC. Ask which one, and ask for the supervision number. A bookkeeper who cannot answer that is a compliance problem, not a bargain. You can compare the tax side of your own numbers using our calculators before any of those conversations.
The Short Answer
Budget £100 to £200 a month if you are a low-volume sole trader, £200 to £400 if you are a VAT-registered small limited company, and £450 or more once you are past a few hundred transactions a month. Treat hourly rates of £20 to £45 as the sanity check on any retainer: divide the fee by the hours it should take, and if the implied rate is under £18 or over £55, ask why.
If your qualifying income was above £50,000 in 2024/25 and you are still keeping records on a spreadsheet, the trigger for getting advice is now, not April. Quarterly filing under Making Tax Digital for Income Tax started on 6 April 2026, and the first quarter is the expensive one to get wrong. Our services page sets out how the bookkeeping and year-end pieces fit together.
This article is general guidance on typical UK market rates and tax rules, not personal advice. Figures quoted as ranges are observed market ranges, not published statistics.