Creator tax: how accounting and software models work

What to take away

Creator tax pricing models are the fee structures accountants and software providers use when quoting a creator.

Use HMRC for deadlines and penalties. Use ACCA, ICAEW, AAT and CIOT directories to check adviser status. Use provider rate cards for real prices.

Fixed fees and percentage fees

UK accountants and software quote creators in four broad ways: a fixed fee, a percentage, a subscription, or a hybrid of the last two. Each shifts the risk of a busy or a quiet year between you and the adviser.

How fixed fees work in practice

A fixed fee is agreed in advance for a defined piece of work, such as a Self Assessment return.

TaxScouts publishes fixed-fee Self Assessment returns. Extra income sources are priced as add-ons. It suits creators with simple returns.

Crunch sells fixed monthly accounting packages. Higher plans include annual accounts and company tax returns. It suits limited companies that want predictable bills.

Read the engagement letter as carefully as the price. HMRC's standards for dealing with taxpayers and their representatives set out what you can expect when an adviser deals with HMRC for you.

How percentage fees change with income

A percentage fee is calculated from your income, your tax bill or the tax saved.

Ask what figure the percentage applies to. Income, profit and tax saved give very different invoices. Some firms cap the fee or set a minimum. Check whether VAT is included.

Percentage models suit irregular income, because the fee falls in a quiet year. They need a large saving to beat a fixed fee.

Our budget guide for England creators shows how to test those figures against your cashflow.

Subscriptions and hybrid models

Subscriptions and hybrids usually trade a smaller headline bill for a narrower scope, so the inclusions matter as much as the amount.

Monthly subscriptions for software and support

A subscription charges a recurring monthly or annual amount, usually for software, a support retainer or both.

GoSimpleTax sells tiered subscriptions for Self Assessment software. A free trial is available, and filing costs extra.

FreeAgent is free with NatWest, Royal Bank of Scotland, Ulster Bank and Mettle business accounts. Otherwise it costs £33 plus VAT per month. It suits sole traders and limited companies.

Xero and QuickBooks Online sell monthly accounting subscriptions. Higher tiers add VAT, payroll and multi-currency tools.

Some creator platforms bundle tax reporting into a wider product. Check whether that sits inside a subscription or costs extra, and whether the package covers bookkeeping or filing.

Check whether filing, correspondence and year-end work sit inside the fee. Subscriptions rarely cover HMRC correspondence.

Hybrid fees and add-ons

A hybrid model combines a base subscription with a fee for each return or advisory session.

Mazuma offers fixed monthly accounting for limited companies. Extra VAT returns and advisory work are usually charged separately.

Ask for a written schedule of add-on prices, so two providers can be compared on the same basis.

What changes the price

Quotes move with the work involved, the risk the adviser carries and how easy your records are to work with.

Your income mix and record keeping

Providers price risk and time. A creator with one income stream and tidy records is cheaper to serve than one with five streams and missing receipts.

Use AAT, ACCA, ICAEW and CIOT directories to confirm an adviser's qualification. These bodies do not set fees, so ask for a written quote.

If you handle personal data in your marketing, the rules on lawful basis apply to what you send and keep. The ICO's guidance on choosing a lawful basis for direct marketing is the reference point.

Provider models and public facts to check

The table below lists provider models and public facts to check for a creator with £45,000 of income. Check current rate cards before you decide.

Percentage models can look cheaper in a good year and dearer in a bad one. Fixed fees are easier to plan around.

Keep your own figures in a template you control. Our guide to a creator tax budget template with its data and sources shows how to record quotes, fee bases and payment dates in one place.

Common questions

Short answers to the questions creators ask most about how these models work in practice.

Are percentage-based tax fees allowed in the UK?

Yes, provided the engagement is clear and the fee basis is agreed in writing.

Which model is cheapest for a small creator?

Usually a fixed fee or a low-cost subscription, because a percentage fee needs a large saving to compete.

Can I switch pricing models mid-year?

Often yes, but check the notice period and any exit fee in the engagement letter.

Do I need a qualified adviser for my own case?

This article is general guidance only, so speak to a qualified adviser about your own circumstances.