How outsourced bookkeeping works in the UK, what it costs and what stays with you
Outsourced bookkeeping means someone outside your firm keeps your clients' books: coding transactions, reconciling bank feeds, running payables and payroll, and preparing the figures behind each VAT return. In the UK the dealings with HMRC, the client authorisations and your money laundering duties stay with you unless the provider is registered to take them on. The bookkeeper can be a local firm, an offshore provider or a dedicated person working inside your own software.
Below: who may do what, how Making Tax Digital and UK GDPR affect it, the three ways firms buy it, published prices, and what you can't hand over.
Serkan Honeine, Co-founder, CoSauce
Published · Last updated
Who may do what with HMRC, AML supervision and the professional bodies
The line that matters in the UK is contact with HMRC. HMRC says that if you interact with it about someone else's tax affairs and get paid for it, you're a tax adviser and need to register. That covers phone calls, letters, payments and sending returns. The legal entity registers, so individual employees don't register separately. Businesses based outside the UK must register too. Online registration began on 18 May 2026 and runs in windows by type of adviser (GOV.UK, register as a tax adviser).
Registration runs through an HMRC agent services account, which is how advisers use HMRC's online services and ask clients to authorise them. You need approved anti-money laundering supervision before you apply, and HMRC rejects the application if that supervision is still pending (GOV.UK, agent services account).
Bookkeeping itself sits under the Money Laundering Regulations. HMRC's list of accountancy service providers includes professional bookkeeping services, alongside accountants, tax advisers and payroll agents. A provider must register with HMRC for supervision unless a professional body already supervises it (GOV.UK, accountancy service provider registration). The approved bodies include ICAEW, ACCA, AAT, the Institute of Certified Bookkeepers and the Institute of Accountants and Bookkeepers (GOV.UK, who needs to register).
So ask any provider two things. Who supervises you for AML, and are you registered with HMRC as a tax adviser? If the answer to the second is no, the HMRC side stays with you. That is the normal set-up when the bookkeeper prepares and your firm reviews and submits. GOV.UK doesn't spell out how an overseas team working under your direction fits your own supervision, so put that question to your supervisor.
What MTD changes for the bookkeeping
All VAT-registered businesses should now be signed up for Making Tax Digital for VAT, and HMRC signs up new registrations itself (GOV.UK, MTD for VAT). For Income Tax, sole traders and landlords with qualifying income over £50,000 in 2024 to 2025 should have started on 6 April 2026. Over £30,000 in 2025 to 2026 means starting on 6 April 2027, and over £20,000 in 2026 to 2027 means 6 April 2028 (GOV.UK, MTD for Income Tax). From September 2026 HMRC has been signing up people who need it for the 2026 to 2027 year (GOV.UK, MTD overview).
For a firm that means more clients keeping digital records in compatible software, more often. That is steady, rules-based processing, the kind of work outsourcing suits. The submission still goes through your agent services account.
UK GDPR when the bookkeeper is overseas
Client books are personal data, so UK GDPR applies when they leave the UK. Countries with UK adequacy need no extra paperwork. The GOV.UK list covers the EU and EEA states. It also covers Andorra, Argentina, Canada (partial), the Faroe Islands, Gibraltar, Guernsey, the Isle of Man, Israel, Japan (partial), Jersey, New Zealand, South Korea, Switzerland, the United States (Data Privacy Framework only) and Uruguay. South Africa, India and the Philippines aren't on it. For those, exporters need a safeguard under Article 46 of the UK GDPR. The usual ones are the UK International Data Transfer Agreement (IDTA) and the UK Addendum to the EU standard contractual clauses (GOV.UK, UK approach to international data transfers). Ask the provider which one they sign. This is a summary, not legal advice.
Three ways UK firms buy bookkeeping help
| Option | Who does the work | How you pay | Who deals with HMRC |
|---|---|---|---|
| Local bookkeeping firm or freelancer | Their staff, on their process, shared across their clients | An hourly rate, or a monthly retainer per client | They can, if registered with HMRC as a tax adviser. Otherwise you. |
| Offshore provider, service or seat model | The provider's staff overseas, in your software or theirs | A monthly package, an hourly rate or a fee per full-time person | Usually you |
| Dedicated offshore team, salary at cost | A dedicated person the provider employs and manages with you, in your software | Their salary at cost, plus a flat management fee | You |
The third option is how we work at CoSauce. We employ the person in South Africa, pass their salary through at cost and add one flat monthly fee. They work on named logins inside your own software, and a co-founder joins your weekly review. We quote after we've mapped the work. The outsourced bookkeeping page describes the Offshore finance desk, and how we work covers the method. South Africa is one hour ahead of the UK in summer and two in winter, so the team shares most of your working day. Our UK page has more on that.
UK bookkeeping prices from Xero and QX
Xero's UK guide puts freelance bookkeepers at £20 to £50 an hour. Monthly retainers run from £50 to £150 for a sole trader, £120 to £400 for a small limited company, and £300 to £700 or more for a growing SME. An employed bookkeeper earns £24,000 to £35,000, and Xero adds 20% to 30% for employer costs (Xero UK, how to hire a bookkeeper). The National Careers Service gives the same salary span, starter to experienced, on 37 to 40 hours a week (National Careers Service).
Offshore prices in pounds are thin on the ground. QX Accounting sells to UK practices. It publishes a market range of £8 to £25 an hour for offshore accountants and £12,000 to £30,000 a year per outsourced employee (QX Accounting, cost guide). Those are its benchmarks rather than a rate card, so check what any quote leaves out. Our offshore accounting cost article covers what usually sits inside an offshore price.
A worked example with one full-time bookkeeper's year
| Route | Cost a year |
|---|---|
| Freelancer at £20 to £50 an hour, 37 hours a week, 52 weeks | £38,480 to £96,200 |
| Employee on £24,000 to £35,000, plus 20% to 30% employer costs | £28,800 to £45,500 |
| Offshore, at QX's published range per employee | £12,000 to £30,000 |
The freelance row is 1,924 hours at Xero's range, which shows why hourly billing is the dear way to buy a full week. The employee row uses Xero's salary span and its 20% to 30% uplift, and still leaves out recruiting and holiday cover. The offshore row is QX's published range. None of the three includes your reviewer's hours or the time spent submitting to HMRC.
What a UK firm keeps in-house
- Your agent services account, client authorisations and every submission to HMRC.
- Your AML supervision.
- The UK GDPR safeguard for any transfer outside the UK, and telling clients in your engagement letter.
- The review: someone in your firm checks the figures before they go to a client or to HMRC.
Our people work on ISO 27001-certified infrastructure, inside your software and under your access rules. The questions worth asking any provider about access and data are in security questions to ask an offshore accounting provider. For the first month, see how to onboard an offshore bookkeeper onto Xero.
Questions
Does an offshore bookkeeper need to register with HMRC as a tax adviser?
Only if they are paid to deal with HMRC about your clients' tax. Overseas businesses are covered, and the business registers rather than each employee. If your firm does the submitting and the talking to HMRC, the registration is yours.
Can we send client books to South Africa under UK GDPR?
Yes, with a safeguard. South Africa isn't on the UK adequacy list, so the usual route is the IDTA or the UK Addendum, signed with the provider before any data moves.
Is this outsourced accounting for accountants, or for businesses?
Both exist. This article is for firms that keep books for clients and want to keep the client relationship, the review and the HMRC side in-house. If you run a business and want someone to do your own books, a local firm on a monthly retainer is usually simpler.
Next step
If you're weighing up outsourced bookkeeping for your practice, book a call with me. Bring a rough count of the clients you'd move and tell me who submits to HMRC today. I'll say which route fits. If it isn't us, I'll say that too.