An advertised price rarely tells the whole story. Many London small business owners sign up to an accountant expecting one monthly figure, only to find additional charges appearing throughout the year for things they assumed were already included. These hidden fees are not always deliberate or dishonest, but they can turn what looked like an affordable package into a genuinely expensive one by the time you add everything up over twelve months. Knowing exactly where to look before you sign is the best protection you have against unwelcome surprises later, and this guide covers the areas that catch out London business owners most often.
Setup and Onboarding Charges
Some firms charge a separate fee simply to take you on as a client, covering the process of migrating your historical records, setting up your software, and getting your account established on their systems. This is not unreasonable in itself, since onboarding genuinely takes time and effort on the accountant's part, but it should always be disclosed clearly before you commit, rather than appearing as a surprise line on your first invoice once the work is already underway.
Ask specifically whether this charge is one-off or repeats annually, and what exactly it covers. A one-off setup fee that includes proper migration of several years of records is a very different proposition to a vague annual "administration charge" with no clear justification behind it, and the difference is well worth clarifying before you sign anything.
Charges for Correspondence With HMRC
Routine filing is usually included in a standard package, but responding to a specific HMRC query, letter, or enquiry can sometimes be billed separately, occasionally at an hourly rate even within an otherwise fixed-fee arrangement. This is one of the most common places where costs escalate unexpectedly, particularly if HMRC opens even a basic compliance check into your return, which can happen at random regardless of how carefully your accounts were prepared.
Ask specifically what your fee covers if HMRC does raise a query. Some firms include a set amount of correspondence time as standard, others offer optional fee protection insurance for a small additional cost, and some simply bill hourly for anything beyond the original filing. Knowing which applies to you before an enquiry lands is far better than finding out afterwards.
Costs for Adding Staff or Services Mid-Year
If you take on a new employee partway through the year, some firms charge a per-employee setup fee for adding them to payroll, on top of your existing monthly fee. Similarly, registering for VAT partway through the year, or adding a new business activity, can sometimes trigger additional charges that were not obvious from your original quote. None of these charges are inherently unfair, but they should be listed clearly upfront so you can plan for them as your business grows and changes.
- Per-employee setup fees when adding new starters to payroll
- Charges for registering for VAT partway through the year
- Fees for producing references for mortgages or loan applications
- Charges for amending a previously filed return
- Software subscription costs billed separately from the core fee
- Fees for closing down a company or business partway through the year
Charges for References and Ad Hoc Letters
Mortgage lenders, landlords, and some suppliers often ask for a reference or letter from your accountant confirming your income or the health of your business. Many firms charge a flat fee for producing these, which is reasonable in isolation, but worth knowing about in advance rather than discovering it at the exact moment you need the document quickly for a time-sensitive application, when you are in the weakest position to negotiate over the price.
It is also worth asking how quickly these documents are usually turned around. A slow response at exactly the moment you need a reference for a mortgage offer or a lease can be just as costly, in stress and missed deadlines, as the fee itself.
Software Subscriptions Billed Separately
Cloud accounting software is central to most modern bookkeeping, but not every firm includes the licence fee within their quoted price. Always ask whether Xero, QuickBooks, or whichever platform is used comes bundled into your monthly fee for bookkeeping and accounting services, or whether it is billed to you directly as a separate subscription, since this can add a meaningful amount to your annual spend if it is not accounted for from the start of your engagement.
It is also worth checking what happens to your data if you ever decide to leave. Some software subscriptions are held in the accountant's name rather than yours, which can make switching providers more complicated than it needs to be if this is not clarified early on.
How to Get a Genuinely All-Inclusive Quote
The simplest way to avoid hidden fees is to ask directly: "Is there anything else I might be charged for beyond this fee?" and to get the answer in writing. A transparent firm offering accounting services for small businesses will be happy to list every possible extra charge upfront, rather than leaving you to discover them one invoice at a time throughout the year as your circumstances naturally change.
It is also worth asking for a sample invoice from an existing client, with figures anonymised if necessary. Seeing what a real bill actually looks like tells you far more than any glossy marketing page ever can about how a firm genuinely handles pricing in practice.
Reading Your Engagement Letter Properly
Your engagement letter is the formal document that sets out exactly what your accountant will do and what they will charge for it. It is easy to skim past, but this is precisely where hidden fees are usually disclosed, buried in a paragraph most people never read closely. Taking twenty minutes to read it properly before signing can save a great deal of confusion and frustration later in the relationship, and it is entirely reasonable to ask questions about any clause you do not fully understand.
Pay particular attention to any section describing what happens if you want to leave the firm, since some engagement letters include notice periods or exit charges that are easy to miss when you are focused purely on the headline monthly price at the point of signing up.
Building Extra Costs Into Your Budget Anyway
Even with the most transparent accountant, it makes sense to build a modest buffer into your annual budget for genuinely unpredictable items, such as an unexpected HMRC query or a one-off reference request. This is not a criticism of fixed fee pricing at all, simply a sensible acknowledgement that no package can realistically anticipate every single situation a growing business might encounter over the course of a busy year.
The Bottom Line
Hidden fees are consistently one of the most common reasons an apparently affordable accountant ends up costing considerably more than expected. Ask direct questions about setup charges, HMRC correspondence, mid-year changes, references, and software before you commit, and insist on getting the answers in writing. A genuinely transparent firm will welcome these questions rather than avoid them, and that willingness to be upfront is itself one of the clearest signs of a trustworthy accountant worth working with over the long term.
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