Legal, Audit & Accountancy Fees: Codes 7600, 7601 & 7602

These three codes cover the core professional services most limited companies need at least once a year, whether it's a contract that needs checking, an audit that's legally required, or the year-end accounts themselves.

The codes, and what each one holds

Code 7600 — Legal Fees records solicitor and legal advice costs, such as contract reviews or dispute resolution.

Code 7601 — Audit Fees covers the cost of a statutory audit, where the company meets the size thresholds that require one.

Code 7602 — Accountancy Fees covers the cost of preparing annual accounts, tax returns, and general accountancy support. All three are Overheads codes and normally carry a debit balance.

Real-world examples across industries

Small trading company

A growing company pays £800 to a solicitor to review a new supplier contract — a debit of £800 to 7600 (Legal Fees), plus VAT if applicable — and separately pays its accountant £2,640 (£2,200 net) to prepare the year's statutory accounts and Corporation Tax return, a debit of £2,200 to 7602 (Accountancy Fees) and £440 to 2201. Most small companies qualify for the small companies audit exemption, so 7601 (Audit Fees) sits at nil unless a lender or shareholder specifically requires one.

Group with subsidiaries

A group required to have a full statutory audit sees the fee scale with complexity, particularly where several subsidiaries each need a separate audit opinion before consolidation — a £14,400 invoice (£12,000 net) is a debit of £12,000 to 7601 and £2,400 to 2201. Consolidating those results into group accounts is itself a much bigger accountancy job than a standalone small company, so 7602 carries a correspondingly larger fee, say £6,000 (£5,000 net, £1,000 VAT). A separate legal fee of £1,500 for updating intercompany agreements lands in 7600 alongside the two larger fees, all three codes active in the same period.

Business buying commercial property

A solicitor's invoice for a property purchase typically bundles the standard-rated legal fee with disbursements — Land Registry fees, local authority searches — paid on the client's behalf and passed on at cost. Genuine disbursements meeting HMRC's conditions fall outside the scope of VAT, so a £2,400 invoice made up of a £1,200 fee (£1,000 net, £200 VAT) and £1,200 of VAT-free disbursements has to be split: only the fee element (debit £1,000 to 7600, debit £200 to 2201) gets the normal VAT treatment, while the disbursements are usually posted against the cost of the property itself rather than to 7600. No audit or accountancy fee is triggered by the purchase alone.

Why this matters day to day

Keeping these separate from general professional fees makes it easy to track statutory, non-negotiable compliance costs against more discretionary spend like consultancy. It's also useful when a company crosses the audit threshold for the first time, since Audit Fees will suddenly need to hold a meaningful balance where previously it sat at zero — worth budgeting for well ahead of the change.