How much does it cost to hire a small business tax accountant?

HomeInformation Centre
Small business taxation
Accounting
By
John Liston
John Liston
Director | Adviser
June 26, 2019
5
minute read

An overview of the cost and benefits of hiring the right tax accountant for your small business

When you’re looking at hiring a tax accountant for your small business you might be tempted to ask “how much does this cost?” But a better question to consider is “what will this save me?”

When choosing a business tax accountant it’s important to determine whether they’re the right fit for your business, rather than choosing an accountant simply based on price. Engaging the wrong accountant can end up costing you more in the long run.

So it’s important to look at what your tax accountant will do for your business to help you reduce your tax, and the value they can add, then look at what your business tax accountant is likely to cost.

For expert small business tax advice to help you make the most of your tax return, get in touch with Liston Newton Advisory today.

Choosing your tax accountant depends on your business situation

The cost of accounting is generally linked to the size of your business, and the complexity involved in completing your annual tax return and accounting. As your business grows, so too does your expenditure, which makes your accounting needs more complex.

The type of tax structure you operate under also has an impact on the price. For example, a sole trader won’t need the same level of support as a business operating under a company structure, which requires a full set of financials and company tax returns, so likely will pay less for their tax accounting services.

It’s important to choose a tax accountant who specialises in businesses of your size, to make sure you’re getting the right level of service.

Consider the level of accounting support you need

business tax accountants

When looking into engaging the services of a business tax accountant you need to determine the level of support you’ll need. At the bare minimum, your tax accountant is there to support you in meeting and maintaining your compliance requirements with ASIC and the ATO.

For someone operating as a sole trader you fall under the same tax requirements as an individual, so your business tax accounting needs can be considered reasonably straightforward. But if you’re running a business under a company or trust structure your compliance needs are significantly more involved, and can include:

  • Annual company tax returns and financial statements
  • Quarterly or monthly BAS lodgements
  • Annual ASIC lodgements
  • Personal tax returns for the business owner/s
  • Tax minimisation planning

Determining the level of support you require will give you a better idea of the price range you can expect to pay.

The cost of a good business tax accountant

As a general rule, the best indication for what your business tax accountant may cost is based on your annual revenue.

For a business in a company or a trust structure with revenue of $500k or less, you can expect annual tax and compliance to start at between $3,000 - $5,000 + GST.

For revenue between $500k to $1m, expect annual tax and compliance to start at between $5,000 - $10,000 + GST, depending on the complexity of your business and needs.

While we all want to get the best value for money, choosing your business tax accountant based on cost isn’t necessarily the smartest way to go.

The risks of hiring a cheap business tax accountant

Like most things in life, you get what you pay for. While it’s certainly possible to find a cheap accountant who can complete your annual business tax return and accounting for bargain basement prices, you need to be aware that this brings a certain amount of risk.

For an accountant to provide cheap services, they’re usually doing one of two things.

  1. Spending very little time on your accounting work so that they can complete it quickly and cheaply (and move on to the next one).
  2. Hiring cheap staff with limited experience or qualifications.

To get accounting work of a good quality it needs to be completed by experienced and qualified professionals, who are willing to dedicate the necessary time to your needs.

The hidden cost of hiring a cheap accountant

Good accounting work can’t be rushed, as careful analysis is required to ensure that the work is accurate and compliant with Australian tax law. We often see work that’s been completed cheaply, which ends up costing a business owner more in the long run.

Inaccurate work needs to be re-done, which costs additional fees. Or the accountant may have missed opportunities for strategic tax planning that could have saved you thousands of dollars in unnecessary tax.

A good business tax accountant may cost more at the outset, but they’ll allow you to save more in the long run.

Other things to consider when looking for a tax accountant

Tax and accounting is just the tip of the iceberg when it comes to running a business, and your accountant is a valuable resource who can assist you in guiding your business in the right financial direction.

So when looking for a new accountant you should ensure they’re going to provide more than just a completed tax return.

  • Will your new accountant review your business and personal tax structure to make sure it's as tax-effective as possible?
  • Can they offer advice on ways to grow your profit each year?
  • Are they able to assist you with your accounting software to make sure you’re getting the most out of it?
  • Will they take the time to understand your business and personal goals so they can tailor the advice to suit your situation?

If your business tax accountant doesn’t do these things, you need to start shopping around for a new accountant, and fast. Engaging a tax accountant who doesn’t take a strategic view of your business means you’re essentially leaving money on the table.

What you should ask a new business tax accountant

  • What’s their experience and knowledge in your industry?
  • Can they assist you with strategic tax planning?
  • What is the level of work they do behind the scenes to make sure your tax work is correct and compliant?
  • Are they generally proactive in offering you advice, or do they only assist when asked?
  • Are they successful in running their own business? Can they teach you about successful business operations?

Choose a business tax accountant whose goal is to help you achieve yours

small business tax accountant

At Liston Newton Advisory our business tax accountants provide you with a range of accounting services and advice that will keep your business on track to achieve your financial goals. We can discuss your business circumstances and needs, and work with you to develop a plan that delivers the best long-term value for your tax situation.

Related articles