Starting a home-based accounting practice typically costs between £1,500 and £4,000 in the first year, mainly on insurance, professional body fees, and software. You can be operational for under £2,000 if you already hold your qualifications and set up as a sole trader.
First-year cost breakdown
| Expense | Low estimate | High estimate | Notes |
|---|---|---|---|
| Practising certificate | £195 | £600 | AAT low end; ICAEW high end |
| AML registration (HMRC) | £0 | £300 | £0 if body-supervised; £300 if HMRC-supervised |
| Professional indemnity insurance | £200 | £800 | First-year premiums vary widely |
| Accounting software | £170 | £660 | 12 months at £14 to £55/month |
| Practice management software | £0 | £600 | Many start with spreadsheets |
| Website and domain | £100 | £2,000 | DIY vs professionally built |
| Business cards / marketing | £50 | £300 | Optional but useful |
| Companies House incorporation | £0 | £13 | Only for limited company |
| Business bank account | £0 | £120 | Several free business accounts available |
| Total (first year) | £715 | £5,393 | Typical range: £1,500 to £3,000 |
Ongoing annual costs
| Expense | Typical annual cost |
|---|---|
| Practising certificate renewal | £195 to £600 |
| PII renewal | £200 to £800+ |
| Accounting and practice software | £500 to £2,000 |
| CPD courses and training | £200 to £1,000 |
| Website hosting and maintenance | £100 to £500 |
| Professional memberships (ICB, etc.) | £100 to £250 |
Where new practices overspend
- Too much software too soon. Do not subscribe to multiple tools before you have the clients to justify the cost. One accounting platform and a spreadsheet will do for the first six months.
- Expensive website. A simple, professional website costing £500 to £800 will serve you as well as one costing five times that when you are starting out.
- Office space they do not need. A home office is perfectly legitimate and significantly cheaper. Most clients do not expect to visit your premises.
Where new practices underspend (to their cost)
- Professional indemnity insurance. The cheapest policy is rarely the most appropriate. If a client suffers a financial loss as a result of your advice, the claim can easily exceed your annual turnover.
- Engagement letters. A solicitor-reviewed engagement letter costs a few hundred pounds and can prevent costly disputes with clients.
Disclaimer: Costs are estimates as at March 2026 and will vary based on your professional body, location, and specific circumstances.