As a small business owner, you’re already wearing a lot of hats. You’re making all the leading business decisions, while also heading up customer service, your marketing, and ultimately delivering your product or service. To top it all off, you need to handle your finances and make sure your books are in order.
Which brings us to today’s question – do I need an accountant for a small business in the UK, or is this a waste of money?
Small businesses aren’t legally required to hire an accountant at all. This is something that you can, and might want to, take care of yourself. However, for many businesses, managing their own accounts is a time-consuming task they’d rather have professionals handle. After all, isn’t there something better you can do with your time other than bookkeeping?
The decision is completely up to you. But to help you make the right one for your business, we’re going to run through the pros and cons of having an accountant and whether it’s the right match for your business.
Accounting 101: What You Legally Have To Do Yourself
Although it’s not a requirement to hire an accountant, there are legal responsibilities that you need to comply with. Firstly, as a business owner, it’s your legal responsibility to keep accurate records and submit your returns.
For sole traders, this means submitting an annual Self-Assessment tax return with HMRC. For more information on your tax return, read this guide on paying income tax as a sole trader here.
For limited companies, this means filing your annual accounts and company tax returns with Companies House. You’ll also need to file a VAT return if you are VAT registered.
Research into tax compliance has found that self-managed filings are more likely to contain errors, due to complex tax rules or inaccurate calculations (HM Revenue and Customs, 2022). Any late filings will be subject to fines and penalties. It’s important that you do this correctly and on time.
| Business Structure | Key Requirements | Filing Body & Deadline |
| Sole Trader | Submit a Self-Assessment Tax Return and pay income tax | HMRC. The online filing deadline is 31st January. |
| Limited Company | 1. File annual Confirmation Statement 2. File your year-end Accounts and pay corporation tax. 3. File a VAT return if VAT registered | Companies House: Accounts are due within 9 months of your Accounting Reference Date (ARD). Your tax return is due within 12 months of the end of the accounting period. |
Inaccurate filing can also lead to fines and potentially trigger HMRC investigations into your business, which is about as fun as it sounds.
Why Your Small Business Might Benefit From An Accountant
Let’s explore the ways that your small business might benefit from having an accountant first, before we weigh up the value versus the cost.
Accountants can be used for many jobs, such as:
Bookkeeping
Looking after the day-to-day management of your books and finances.
Filing returns
Keeping you compliant with your legal responsibilities by making sure they are filed correctly and on time.
Payroll
Managing any PAYE payroll (if needed), as well as reporting this back to the HMRC.
Admin
Taking on financial paperwork and administrative tasks. They can also help you secure loans and investments when you need them.
Strategic accounting
Saving you money by optimising your costs and identifying allowable expenses or allowances that bring down the tax bill that you may not have known about. They can also provide business and growth planning advice, using your financial information to offer clear insights and a plan to take your business to the next level.
Fundamentally, accountants can help save you time. With an accountant on board, you don’t have to spend hours looking after your accounts yourself or filing your returns. Instead, you can focus on other areas of your business, putting that time back into growing your sales.
In addition to taking care of your accounts, accountants can also help save money and grow your business. Explore our guide on how accountants can help your business succeed, to see more examples.
The caveat is that the more you want to use your accountant, the more expensive it will be.
Recommended – Top-Rated Online Accountant:
Weighing The Cost vs. The Value Of An Accountant
Accountants come at a cost. For some small businesses, this is worth paying because the value they receive outweighs the initial expense. For other small businesses, it might be an expense that you just don’t have enough room for at the moment.
To work out if the cost is worth the benefit, it’s helpful to break down the value of your own time spent on accounting tasks. For example, let’s say that an accountant charges £200 to prepare and submit self-assessments for a sole trader.
As a business owner, preparing and submitting your own return might take you 10 hours to complete yourself. Now, how much do you value your time?
Let’s say you value your time at £25 per hour. At 10 hours, this has cost you £250 in value to complete yourself, which is more than the accountant’s fee.
But that’s not all.
You also need to factor in potential fines that you may be subject to for filing inaccurate or late returns, as well as any potential savings that you might have missed. You are a business owner, and not an accountant, so it’s not unreasonable that you might make an error that an accountant would be able to spot and correct for you.
This is especially true when you consider that one survey found that one-third of business leaders manage their own finances manually using pen and paper, which leaves a lot of room for human error.
Not yet convinced? Forbes (2025) revealed the real cost of manual accounting for SMEs, with a 1 to 3 per cent error rate. Imagine how many potential mistakes are present in a thousand transactions recorded by an overworked business owner.
It’s also worth mentioning that although an accountant can perform several services for your company, you don’t need to invest in them all. If you just want someone to do your returns and take care of the rest of your returns yourself, this could be a perfect situation for your business.
In fact, according to the same survey, 29% of business owners hire an accountant to help with their tax returns but do everything else themselves. Only 27% of businesses don’t use an accountant at all.
DIY Accounting: Is Paying For Accounting Software Better Than Hiring An Accountant?
This is often where the question shifts from how to manage accounts to do I need an accountant for a small business in the UK, or can software handle it?
Accounting software is a great option for small businesses, and for some, it might be the better answer to invest in software rather than an accountant.
We’ve previously broken down the full pros and cons of accounting software, but in a nutshell, accounting software can:
- Help save time by automating parts of your accounting, for example, connecting to your bank accounts and automatically recording transactions.
- Reduce human error, as the calculations are handled for you.
- Make it easier to keep your records, especially with features like uploading pictures of receipts.
- Give you real-time insights into how your business is doing, helping you make the right decisions.
Like accountants, accounting software will also come at a cost (although often significantly less!). For small businesses, there are also a few options that offer free tiers for businesses to get started – including ANNA Business Tools and Zoho Books.
It’s also another tool that you have to learn. Some are more complicated than others, and you’ll have to carefully consider what features you need and what’s right for your business.
However, if you use accounting software, you may also be able to reduce your accountant fees as they will need to spend less time on your accounts, so for some businesses, you might want to invest in both.
Top-Rated Accounting Software:
| Accounting Software | Cheapest Package | Ease Of Use | Our Rating | Review | Official Site |
|---|---|---|---|---|---|
 | £33/mo | Excellent | 9.4 | Read Review | Visit Website |
 | FREE | Outstanding | 9.3 | Read Review | Visit Website |
 | £10/mo | Excellent | 9.3 | Read Review | Visit Website |
Making The Right Call: Do I Need An Accountant For A Small Business In The UK?
Ultimately, the answer to do I need an accountant for a small business in the UK depends on your confidence with compliance, the time you have available, and the complexity of your finances.
However, if any of the following sound like you, then hiring a professional might be the right call:
- You’re feeling stressed about your accounts, or you’re worried about filing your returns.
- It takes you a lot of time and energy to do your accounts, and you’re worried about making errors.
- You need financial advice about the current state of your business and how to grow.
- You want help securing loans or investments.
- You think your tax bill is too high.
- You’re in a crisis, such as being investigated by HMRC.
If you’re confident and happy doing your accounts, then it might be best to save the money and invest elsewhere in your business.
If you do choose to use an accountant or accounting software, it’s important that you find the right match for your business. Not all accountants or software are the same, so you need to weigh up which options are best for your particular needs. To help, you might want to check out:
- The best questions to ask when hiring an accountant
- The ultimate guide to choosing accounting software for your business
- Our best online accountant reviews
- Our best accounting software reviews
Until next time, get all the business advice, tips, and news you need at Business4Beginners.
