A fixed quote that the client accepts usually becomes the contract price, while an estimate is generally not an offer and not legally binding. For consumer clients, though, what you say about price can become a term of the contract under section 50 of the Consumer Rights Act 2015, so the label alone does not protect you. A fee proposal avoids disputes by saying clearly which it is, what it covers, what it assumes and what happens if those assumptions turn out to be wrong.

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What is the legal difference between a quote and an estimate?

ICAEW’s fee information helpsheet summarises the position: generally an estimate does not amount to an offer and is not legally binding, although a quote may form part of a contract and therefore be legally binding. The same helpsheet says that if a firm sets a fixed fee it will be expected to honour it, and that a firm giving an estimate or quote should make clear it is not a fixed fee unless that is the case.

The practical difference is who carries the risk of the work taking longer. With a fixed quote, the firm carries it, provided the work stays within the agreed scope. With an estimate, the client carries it, but only within the limits set by the professional codes and consumer law described below. The label is not the whole story. What the client was told, and when, also counts, and for consumers the Consumer Rights Act 2015 gives that weight in statute.

What if no price was agreed at all?

The law fills the gap with a reasonable charge. For business clients in England, Wales and Northern Ireland, section 15 of the Supply of Goods and Services Act 1982 implies a term that the client will pay a reasonable charge where the price is not fixed by the contract, left to be fixed in an agreed way, or set by a course of dealing. For consumers, section 51 of the Consumer Rights Act 2015 implies a term that the consumer must pay a reasonable price for the service, and no more. Under both provisions what is reasonable is a question of fact, which in practice means an argument the firm would rather not have. Our page on fee disputes covers how those arguments tend to run.

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Can an estimate become binding on a consumer client?

It can. Section 50 of the Consumer Rights Act 2015 treats anything said or written to the consumer about the service as a term of the contract if the consumer takes it into account when deciding to enter into the contract or when making a later decision about the service. That would include a fee figure. Two points limit the effect:

  • under section 50(2)(a), the statement is subject to anything that qualified it and was said or written on the same occasion, so the caveat must sit next to the figure, not in terms of business sent later;
  • under section 50(2)(b), a change expressly agreed between the consumer and the trader takes effect, so agreeing a revised fee before doing the extra work is enforceable.

Other parts of the Act point the same way. Section 69 says that where a term could have different meanings, the meaning most favourable to the consumer prevails. Section 68 requires written terms to be transparent, meaning plain, intelligible and legible. Section 64 only shields the price from a fairness challenge if the term is transparent and prominent. Schedule 2 lists as potentially unfair a term giving the trader discretion to decide the price after the consumer is bound where no price or method was agreed (paragraph 14), and a term allowing a price increase without a right to cancel if the final price is too high compared with the price agreed (paragraph 15).

For distance and off premises contracts, Schedule 2 to the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 requires the total price inclusive of taxes or, where it cannot reasonably be calculated in advance, the manner in which it will be calculated. Section 50(3) of the 2015 Act makes that information a term of the contract. See cancellation rights for consumer clients for when those Regulations apply.

What do the professional codes require?

The ICAEW Code of Ethics, as quoted in the fee information helpsheet, requires firms to:

  • explain the basis on which fees will be calculated and give an estimated initial fee where applicable, at the earliest opportunity (paragraph 330.4);
  • give fee quotes or the basis of fees in writing, before or as soon as possible after the engagement starts, normally in the engagement letter (R330.5);
  • give a fee breakdown on request, in enough detail for the client to understand how the fee was calculated (R330.4B.1);
  • explain the reason for, and calculation of, any fee above a previous quote or estimate (R330.4B.2).

The helpsheet adds that when it becomes clear a quote or estimate will be exceeded, the firm should tell the client in advance, try to give a fresh estimate and seek consent to continue. Separately, regulation 9 of the Provision of Services Regulations 2009 requires a provider, on request, to give the price or, if an exact price cannot be given, the method of calculating it or a sufficiently detailed estimate.

How should a fee proposal be worded?

The aim is that a client reading only the fee section would understand what they will pay and why it might change. A proposal that does this usually includes:

  1. The status of the figure. Say “fixed fee” or “estimate” in the same sentence as the number, and explain what an estimate means.
  2. The scope. List the deliverables: for example, year end accounts, the corporation tax return and one director’s Self Assessment return. Anything not listed is outside the fee.
  3. The assumptions. State what the fee assumes about the client: bookkeeping reconciled to the bank, records received by a stated date, a stated number of bank accounts or properties, no HMRC enquiry.
  4. The adjustment mechanism. Say what happens if an assumption fails: the firm will tell the client before doing extra work, give a revised fee and continue only with agreement. Give the hourly rates that will apply.
  5. VAT. Show whether figures include VAT. For consumers, give the VAT inclusive total.
  6. Validity and review. Say how long the proposal stands and when recurring fees will be reviewed, with notice of any change. Our page on raising fees with existing clients covers the review itself.

Carry the same wording into the engagement letter so the two documents do not contradict each other.

How might this work in practice?

Illustration only. A firm quotes a new limited company client a fixed fee of £1,800 plus VAT for accounts and the corporation tax return, stated to assume that the client’s bookkeeping software is reconciled to the bank at the year end. The records arrive with six months of unreconciled transactions.

Before starting the clean up, the firm writes to the client explaining that the assumption has not been met, that the reconciliation work is outside the fixed fee and that it estimates £600 plus VAT for it at the stated hourly rate. The client agrees by email. The work takes slightly longer and the firm bills £650, with a note explaining the extra hour as R330.4B.2 requires. The £1,800 fixed fee is not reopened, because nothing within its scope changed.

What happens when the work overruns a fixed quote?

If the overrun is within the scope and assumptions of the quote, the firm generally absorbs it. That is the point of a fixed fee. If the overrun comes from work outside the scope, the firm can charge for it, but should agree the extra fee before doing the work. The ICAEW helpsheet says that where a firm bills extra for work it believes is outside a fixed fee, this should be made clear. Our page on scope creep covers how to spot and control it, and fixed fees vs hourly rates covers which pricing model suits which work.

What mistakes cause fee disputes?

  • Giving a single figure on a call with no caveat, then relying on terms of business sent afterwards to call it an estimate.
  • Describing the same figure as a quote in the proposal and an estimate in the engagement letter.
  • Leaving the scope open, so the client assumes every question they ask is included.
  • Doing extra work first and telling the client when the invoice arrives.
  • Quoting a consumer a VAT exclusive figure without making the VAT clear.
  • Keeping last year’s fee for a client whose business has doubled in size, then trying to recover the difference in one bill.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.