Do You Need an Accountant for a UK Limited Company?

Do you need an accountant for a UK limited company?

A UK limited company is not legally required to hire an accountant, but doing so can simplify complex financial responsibilities such as tax returns, filing deadlines, and payroll. While directors can manage these tasks independently, many businesses choose accountants to save time, minimise errors, stay compliant with regulations, and receive tailored financial advice.

An accountant reviewing financial data on a laptop screen with charts and spreadsheets, analysing performance for a company in a modern office setting

If you are setting up a limited company in the UK, you do not need an accountant. Many businesses operate without accountants, as long as all the necessary paperwork is filed correctly. However, as the process is complex and time-consuming, most established limited companies will hire an accountant.

Running a limited company means taking on new responsibilities – and one of the biggest is managing your finances, particularly if you are running a larger company. From tax returns to PAYE and annual accounts, the admin can feel overwhelming, especially if you're wearing multiple hats. So, do you actually need an accountant, or can you handle everything yourself?

Key Takeaways

An accountant is not a legal requirement for a limited company in the UK – you have the option to do everything yourself.
As a company director, you have certain obligations to file the correct paperwork.
Accountants are particularly popular with limited companies, as the process can be complex and time-consuming.

What is a limited company and how does it work?

A limited company is a type of business structure that has its own distinct legal identity, separate from the individuals who own or manage it. Generally speaking, more established businesses tend to form limited companies, as they offer greater legal protection and are easier to manage.

A limited company is treated as a separate legal entity, meaning it can enter into contracts, own assets, and be held responsible for its own debts, instead of the individual owners (shareholders) or managers (directors).

There is no required size or revenue to set up a limited company – anyone can set up a limited company in the UK, including solo entrepreneurs. Once you form a company, and you put your name down, you will be acting as a company director.

Is it a legal requirement to have an accountant for a limited company?

No, UK law does not require a limited company to have an accountant. However, you should be aware that as a company director, you have certain legal obligations to maintain the company.

As a director, you are responsible for ensuring your company:

Keeps accurate accounting records

Prepares and files annual accounts with Companies House

Completes a Corporation Tax return (CT600) for HMRC

Pays Corporation Tax and other taxes due on time

Provided you are organised and proficient, you can perform all these tasks yourself, with no need for an accountant, much like many businesses in the UK.

It is important to understand that mistakes carry penalties. You’re legally permitted to handle your company’s accounts yourself, provided they’re accurate and submitted on time. You can check on Gov.uk for all the responsibilities as a company director which you must comply with.

Setting yourself up vs. using an accountant

If you are a new business owner considering whether to hire an accountant or register with Companies House, there are a few key factors to consider.

First, assess your own business and time. Consider factors such as your company size, your current turnover (or projected turnover) and your capacity to manage financial admin independently.

Limited companies are much more complex than they might seem, and there are penalties for incorrect filing, so ensure you understand what you are taking on if you decide to do it yourself.

Here are all the advantages and disadvantages of both doing it yourself and using an accountant.

Setting up a limited company yourself

A limited company can be registered on Companies House for as little as £50.

This will involve choosing a company name, registering directors and shareholders, and filing the correct documents.

This is the cheapest option by far, as you will only pay the setup fee from Companies House, and you can have full control and understand the process yourself.

However, there are some drawbacks to setting up a limited company on your own.

For one, you are responsible for understanding and meeting all the ongoing tax and filing obligations. Setting up a limited company is the easy part – maintaining the process, such as filing annual accounts on time, corporation tax returns, and managing payroll, can be where new businesses slip up.

This is often where new limited companies will hire an accountant.

What services do accountants typically offer to limited companies?

An accountant is typically not hired solely to form a limited company, as this is a relatively straightforward process. The ongoing obligations are often where business owners will struggle, and this is where a limited company may need an accountant.

Typical services from an accountant include:

Preparing and filing annual accounts

Submitting the Corporation Tax return (CT600)

Registering and running PAYE payroll

Advising on VAT registration and returns

Filing the Confirmation Statement with Companies House

Advising on allowable expenses and optimising tax efficiency

Handling HMRC correspondence

As businesses evolve, accountants will also be able to advise on the best way to structure the company and pay taxes, such as when introducing new employees or services.

Benefits of hiring an accountant

Running a limited company yourself is tough and requires commitment to filing everything on time.

Directors running a limited company must:

Record income and expenses accurately

Reconcile bank accounts and invoices

File annual accounts with Companies House

Submit Corporation Tax returns via HMRC software or commercial software

Pay tax on time

While possible, the learning curve can be steep, especially if your company grows, hires staff, or becomes VAT-registered. You may be too busy and forget deadlines.

This is why most businesses choose to hire an accountant.

An accountant will be able to handle the entire incorporation process, ensuring that the company is set up correctly, and provide ongoing services to help manage the company.

Some of the benefits of hiring an accountant include:

Peace of mind that filings are accurate and deadline-compliant

Saves time and reduces stress

Could potentially save money on more optimal tax structures

Can provide tailored advice on any future changes

In short, doing it yourself is completely fine, but running a business can be more complex than expected, particularly as turnover and responsibilities increase. Hiring an accountant will help you outsource all of this, and potentially save money by avoiding penalties.

Comparison table of DIY vs. an accountant

If you are unsure whether to do it yourself or hire an accountant for a limited company, here is a brief comparison to help you make a decision.

Factor

DIY setup

Using an Accountant

Using Company Formations Direct

Cost

Low setup fees, just the Companies House fee (£50 online)

Higher setup fees, plus ongoing monthly/annual fees (often £40–£100+ per month).

All-in-one company formation for £59, (including your £50 company registration and £34 annual filing fees). This includes 3 months of Revolut Business & 6 months of Xero for free.

Speed

Very quick – registration can be completed online in a few hours.

Quick and outsourced.

One business day.

Control

Complete control and direct involvement in the process.

Less hands-on – the accountant manages the paperwork.

We handle everything, but you will be kept in the loop with everything you need to know.

Risk of errors

Higher risk of errors or mistakes with share structure, filings, or deadlines, which can cause future issues.

Low, as accountants understand the legal and tax requirements and are qualified professionals.

Extremely low. Our business is company formations – we have incorporated over one million companies since 2014.

Tax planning

Limited to independent research and HMRC guidance.

Tailored advice on tax efficiency (e.g., salary/dividend split, expenses, allowances).

We handle all tax planning, including VAT, PAYE and legal compliance.

Time commitment

Significant – bookkeeping, filing, payroll, and tax returns can consume a significant amount of business time.

Minimal – accountant handles most admin, creating more time to focus on the business.

Just a few minutes to sign up to CFD.

Suitability

Best suited for very small/simple businesses, side hustles, or individuals who enjoy administrative tasks and learning.

Best for growing businesses, anyone unfamiliar with company law/tax, or those wanting peace of mind.

Best for new limited companies and small businesses who have not yet formed a limited company.

How much does an accountant cost in the UK?

An accountant in the UK is not as expensive as you might think. A small LTD company package might cost as little as £60 per month in some cases, with more premium options reaching £150-200 per month.

Payroll add-ons may cost between £20 and £40 per month, and year-end accounts may range from £300 to £1,200, depending on the provider.

Consider the cost of penalties from HMRC, which includes £100 for late filing, an additional £100 for failure to pay within three months, and further penalties beyond this point. If you have been consistently late in the past, an accountant might be an excellent investment for your business to avoid these penalties.

What HMRC/Companies House expects you to submit

If you would prefer to do things yourself, here is a breakdown of everything you are required to submit to Companies House.

Filing requirement

Deadline

Annual accounts to Companies House

9 months after year-end

Corporation Tax return (CT600)

12 months after year-end

Corporations Tax payment

9 months + 1 day after year-end

PAYE payroll submissions

On/before each payday

VAT return (if registered)

Every quarter

Confirmation Statement

Every 12 months

These must be filed with the correct details; otherwise, they may be delayed and go over the deadline, incurring a late submission fee.

Our legal and compliance services are also a way to ensure that you always stay on top of filings, deadlines, and regulations, so you can have peace of mind.

Accounting for small businesses – the best software to use

If you are not hiring an accountant, there are many accounting software tools available to help you.

Some of the best accounting software in the UK includes:

Xero– cloud-based, great for small teams
https://www.companyformationsdirect.co.uk/services/accounting/

QuickBooks – user-friendly for freelancers and Ltd companies

FreeAgent – free with some bank accounts (e.g. NatWest, RBS)

Sage Business Cloud – traditional, but reliable

These tools can help automate bookkeeping, VAT returns, and even payroll, reducing manual effort. HMRC’s systems can be complicated, so these tools often give a much easier user experience.

Remember: software simplifies the process, but does not remove your legal responsibilities as a director. If using software, look for platforms that are compatible with Making Tax Digital (MTD) to stay compliant.

Starting your limited company

You do not need an accountant for a limited company in a legal sense, but as your responsibilities grow, getting expert support can reduce risk and free up your focus.

Accountants in the UK are very common and affordable, saving you a lot of time and stress, and potentially preventing any penalties from late filing. Accountants will also provide you with professional support, which could prove helpful as your business scales.

Our all-in-one company formation service includes accountancy support, as well as your £50 company registration fee, £34 annual filing fee, and a central London virtual office with digital mailroom access. You also will receive three months of Revolut Business and six months of Xero for free, meaning you have everything you need to have your accounts sorted from day one.

Do you need an accountant for Corporation Tax?

Corporation tax is just one form of tax you will be liable for as a limited company. An accountant is not a legal requirement for any kind of tax. You or your accountant must still file a CT600 and calculate tax correctly. Accountants usually handle this to reduce errors.

How much does an accountant cost for a limited company?

In the UK, an accountant will cost roughly £60–£150/month for ongoing services, or £300–£1,200 for annual filings only.

What filing responsibilities must I manage on my own?

The director is always responsible for the business and annual accounts, and you will be liable for corporation tax, Companies House filings, and any other applicable taxes. An accountant will assist with this process.