Professional Fees

This Overheads code records the cost of professional fees incurred in running the business. As an expense account, it normally carries a debit balance: debit entries increase the balance (recording new costs) and credit entries decrease it (for example, correcting an error or a refund received).

Real-world examples

Property-related valuation or survey

Commissioning a RICS valuation or survey as part of buying commercial premises or refinancing — a standard-rated professional fee. £330 (£275 net of VAT) is a debit of £275 to 7604 (Professional Fees), a debit of £55 to 2201 (Purchase Tax Control Account), and a credit of £330 to 2100 (Creditors Control Account).

Insurance broker's arranging fee

Arranging a key person or business protection insurance policy through a broker is a different case: insurance intermediation is an exempt supply under UK VAT law, so unlike almost everything else on this page, there's no VAT to add. A £750 broker fee is debited in full to 7604, with nothing posted to 2201 at all.

Commonly confused with

Because code 7603 (Consultancy Fees) sits right next to this one in Overheads, it's a common mis-posting target. Code 7604 is specifically for professional fees, while 7603 covers consultancy fees — similar in nature, but keeping them separate is what makes the overheads section of your management accounts meaningful rather than a single lumped total.

What a mis-posting here costs you

An error posting to Professional Fees won't change total overhead spend, but it will distort the overheads breakdown that's usually reviewed line by line each month to spot cost creep.

Other codes in Overheads