Small Business Accountants

When Should I Hire a Small Business Accountant?

Most UK small businesses hire an accountant at one of four points: when incorporating a limited company and setting up PAYE, when VAT registration is triggered by the £90,000 threshold or a voluntary early registration, when the business grows beyond what a solo owner can track in a spreadsheet, and ahead of the self-assessment or CT600 deadlines. An accountant typically saves more in tax and time than they cost.

By Jordan Macey MAAT Reviewed by Noor Fiaz Updated 16 Apr 2026 4

Key takeaways

Forming a UK limited company is the most common trigger for hiring an accountant, because statutory accounts and CT600 returns are more complex than self-assessment.
Crossing the £90,000 VAT threshold, or voluntarily registering early, introduces quarterly VAT returns under Making Tax Digital that benefit from accountant oversight.
Hiring an accountant before the 31 January self-assessment or 12-month corporation tax deadlines gives time to claim allowances and reduce the tax bill.
An accountant's fees are usually deductible against corporation tax or self-assessment, making the net cost lower than the headline fee.
Sole traders with simple income often start with DIY bookkeeping software, then switch to an accountant once turnover grows, staff are hired, or MTD for Income Tax applies from 6 April 2026.

Introduction

If you're a <a href="https://goforma.com/self-employed" target="_blank">self-employed person</a> or small business owner, you might have already asked yourself the question, "Do I really need an accountant?" When people ask that, they usually mean, "Can I justify the cost of an accountant?"It seems simple: Hiring an accountant might seem like something you could do without, and if you handle the accounting yourself, you save money. But that isn't the best way to think about it. The reality is that there are hidden costs associated with DIY accounting, and you don't want to come up short. So instead, ask yourself, "Will hiring an accountant add value to my business?"The answer is yes.Below, we'll cover the key cases when you should hire an accountant:

Defining: Accounting and Bookkeeping

Before diving in further, it’s important that we run through the definitions of accounting and bookkeeping. That’s because these two terms are often used interchangeably—yet they refer to two distinct functions.

Accounting refers to the process or work of analysing and reporting financial transactions. It takes the financial data from your business, and ‘turns’ the information into useful insights.

Bookkeeping is more administrative, and refers to the process of recording and summarising financial transactions. Examples of bookkeeping tasks include data entry, completing payroll, generating reports and posting debits and credits.

When should I hire an accountant for my small business?

You’re starting a business

When you’re forming your business, there are many key decisions you need to make.

‘Should you set up as a sole trader or form a limited company? How do you know if your financial projections are realistic? And are there important tax deductions that you might have overlooked?’ are just some of the questions that may be running through your head.

At this stage, an accountant is a valuable source of information, and can help you with the following:

Putting together a well-thought-out business plan
Deciding on the right business structure for your situation
Getting the required business licenses
Tax compliance and tax planning
Setting up your business accounting software

You want to save time on managing your business finances

According to the Federation of Small Businesses (FSB), British SMEs spend an average of 95 hours—each year on tax compliance alone.

It’s the equivalent of almost three working weeks—yet this isn’t taking into account the time that business owners spend on managing other aspects of their company finances.

Some of the hurdles that these small business owners face include determining the tax rates at which they’re required to pay, figuring out tax exemptions or knowing which tax reliefs were available.

An accountant can help you get around challenges that you’re unfamiliar with quickly. As such, it can be a worthwhile investment turning over these tasks to specialists, as it frees up more time for you to focus on more productive business activities.

You’re buying or selling a business

Buying or selling a business can be a stressful time—and it’s to your benefit when you have experts on your side to guide you through the process.

If you’re buying a business, an accountant can:

Review the financial statements
Help with preparation of business plans
Help you assess the actual or perceived value of the company
Help you determine areas for growth through reviewing inventory management, cash flow patterns and more
Provide advice on financing the purchase

If you’re selling a business, an accountant can:

Provide an objective valuation
Help you organise and structure the deal
Help evaluate risk
Make sure that your financial statements are up to date
Help you with planning your next steps, whether that’s financing your next venture, start investing or plan for retirement

You’re applying for a small business loan

Applying for a business loan can be a tedious and time-consuming process. Lenders want to see a strong financial profile—and this is where many small businesses fall short.

Small business owners may lack the knowledge or time to put together a professional package for their loan application, and here’s where an accountant comes into the picture.

They can help:

Determine how much you need to borrow
Introduce a wider variety of financing options
Identify repayment sources and solutions
Provide insight on how the loan can impact your finances
Pull together the collateral you need for the loan application process

Not sure where to start?

Visit our small business accounting hub for further information, or reach out to our team.

We understand small businesses, and do our best to give you everything you need to succeed.

Frequently asked questions

When should a sole trader hire an accountant?

A sole trader typically hires an accountant once turnover crosses around £30,000, once they take on a first employee, or once they need to register for VAT. Sole traders with qualifying income over £50,000 will have to move onto Making Tax Digital for Income Tax from 6 April 2026, which is another common trigger. Before those points, many sole traders manage with cloud software and an accountant's one-off tax-return review each January.

Do I need an accountant to form a limited company?

Forming a UK limited company at Companies House can be done directly online for £100, so an accountant is not strictly necessary. Most owners still involve an accountant either before or shortly after incorporation to advise on share structure, to set up PAYE, to register for corporation tax with HMRC, and to ensure the first year-end accounts and CT600 are correctly prepared. That early advice usually prevents structural problems that are expensive to fix later.

Can I do my own accounts without an accountant?

Legally, UK sole traders and directors can prepare and file their own accounts. In practice, limited company statutory accounts must follow UK accounting standards, the CT600 requires correct corporation tax calculations, and directors' loan disclosures, related-party transactions, and capital allowances all create areas where mistakes are costly. Most small businesses use cloud bookkeeping software for day-to-day records and an accountant for statutory year-end work and tax planning.

How much does a UK small business accountant cost?

Most UK small business accountants charge between £60 and £250 per month on a fixed package, or £720 to £3,000+ annually, depending on business size and services. A basic limited company package covers statutory accounts, CT600, confirmation statement, and the director's self-assessment. Adding payroll, VAT returns, bookkeeping, or management accounts increases the fee. Fees are a deductible business expense against corporation tax or self-assessment.

What are the signs I should hire an accountant now?

Common triggers include: spending more than a few hours a week on bookkeeping, approaching the £90,000 VAT registration threshold, hiring the first employee, incorporating from sole trader to limited company, receiving an HMRC compliance check letter, feeling unsure about allowable expenses or tax allowances, or approaching a self-assessment or CT600 deadline without clean records. Any of these points is a sensible time to move from DIY to professional support.

Will an accountant save me money?

A good accountant usually saves more in tax and penalties than they cost. Typical savings come from identifying legitimate expense claims, optimising salary and dividend mix, using the Annual Investment Allowance, claiming R&D relief where applicable, advising on pension contributions, and avoiding late-filing penalties. They also free up the owner's time for running the business. The net cost after corporation tax relief is often 75% of the headline fee.

Can I hire an accountant mid-year rather than at year end?

Yes. In fact hiring an accountant early in the financial year gives them more time to advise on tax planning, set up cloud software, and collect records month-by-month rather than scrambling at year end. Many UK accountants onboard new clients at any point in the year. Switching mid-year is also straightforward, with the new accountant requesting professional clearance and taking over the records within two to four weeks.