Starting a limited company in the UK is an exciting step, and one question many entrepreneurs ask is: “Can I run a limited company without an accountant?” The simple answer is yes—you are not legally required to hire an accountant to run your limited company. However, while it’s possible to manage your company’s finances and compliance requirements on your own, there are several factors to consider before deciding whether you need professional help.
In this article, we’ll explore what’s involved in running a limited company without an accountant, the challenges you might face, and when it’s worth seeking expert assistance.
What Are the Responsibilities of Running a Limited Company?
When you operate a limited company, you take on several legal and financial responsibilities. These include:
1. Bookkeeping and Record-Keeping
You are legally required to maintain accurate records of:
- Income and expenses.
- VAT (if registered).
- Payroll and employee-related payments (if applicable).
- Invoices, receipts, and bank statements.
2. Submitting Annual Accounts
Every limited company must file annual financial statements with Companies House. These accounts provide a snapshot of your company’s financial health.
3. Filing Corporation Tax Returns
You must calculate your company’s Corporation Tax liability and submit a Company Tax Return (CT600) to HMRC annually, even if your company has no profits.
4. Managing PAYE and Payroll
If your company has employees (including yourself as a director), you’ll need to set up and manage Pay As You Earn (PAYE), deducting income tax and National Insurance contributions.
5. VAT Returns (If Applicable)
If your business turnover exceeds £85,000, you must register for VAT and submit regular VAT returns to HMRC.
6. Confirmation Statement
You need to file a Confirmation Statement with Companies House annually, ensuring your company’s details are up to date.
Can You Handle These Tasks Without an Accountant?
If you have a good understanding of financial management, tax laws and compliance requirements, you can manage your limited company without hiring an accountant. There are tools and resources available to help you, such as:
- Accounting Software: Tools like QuickBooks, Xero, or FreeAgent make it easier to manage bookkeeping, invoices, and tax submissions.
- HMRC Guidance: HMRC provides online resources and guides to help small business owners understand their obligations.
- Templates and Spreadsheets: For basic bookkeeping, spreadsheets can help you track income and expenses.
However, while it’s possible to do this yourself, there are some challenges to consider.
Challenges of Running a Limited Company Without an Accountant
1. Time-Consuming
Managing bookkeeping, tax filings, and compliance tasks can be time-intensive. This takes you away from focusing on growing your business or delivering services.
2. Risk of Errors
Tax laws and accounting rules are complex. Mistakes in tax returns, VAT filings or payroll calculations can lead to penalties or fines from HMRC.
3. Changing Regulations
Tax laws and regulations frequently change. Keeping up with the latest rules and applying them correctly can be overwhelming, especially if accounting is not your area of expertise.
4. Missed Opportunities
Accountants don’t just handle compliance—they also provide strategic advice to help you save money. For example:
- Identifying allowable expenses to reduce your Corporation Tax bill.
- Advising on tax-efficient ways to pay yourself (e.g., salary vs. dividends).
- Helping you plan for growth or major investments.
5. Complex Financial Situations
If your company has multiple revenue streams, international dealings, or complex transactions, managing the accounts yourself can become unmanageable.
When Should You Consider Hiring an Accountant?
While it’s possible to manage without an accountant, there are situations where professional help can make a significant difference:
1. Time Constraints
If your business is growing rapidly or you find it difficult to keep up with admin tasks, outsourcing accounting can save you time and reduce stress.
2. Tax Efficiency
An accountant can help you identify ways to minimise your tax liability while staying compliant with UK laws.
3. Compliance Concerns
If you’re unsure about how to handle legal requirements, such as filing Corporation Tax returns or VAT submissions, an accountant can provide peace of mind.
4. Complex Finances
As your business grows, managing payroll, expenses, and investments becomes more complicated. An accountant can streamline these processes.
5. Strategic Advice
Accountants do more than crunch numbers—they can provide insights into cash flow, profitability, and long-term financial planning.
How Much Does an Accountant Cost?
The cost of hiring an accountant varies depending on the size and complexity of your business. For small limited companies, you can expect to pay:
- Basic Bookkeeping and Compliance: £50–£150 per month.
- Full-Service Accounting: £150–£500 per month, depending on the services required.
- One-Off Services: Some accountants offer pay-as-you-go services, such as filing your annual accounts or providing tax advice.
While this is an additional expense, it can often pay for itself through time savings and tax efficiency.
Can You Start Without an Accountant?
If you’re just starting out and your finances are simple, you might feel confident handling your accounts yourself. As your business grows and becomes more complex, you can always bring in an accountant later to take over.
When starting without an accountant:
- Use reliable accounting software to automate and simplify processes.
- Stay organised by maintaining detailed records of all transactions.
- Set aside time each month to focus on bookkeeping and compliance tasks.
- Educate yourself about tax laws and deadlines to avoid penalties.
Final Thoughts
Yes, you can run a limited company without an accountant, but it requires time, effort and a solid understanding of financial management and compliance. While it’s possible to handle these tasks yourself, many business owners find that hiring an accountant saves time, reduces stress and ensures compliance with HMRC and Companies House requirements.
If you’re unsure whether you need an accountant, consider starting with a consultation. Many accountants offer initial advice to help you understand your obligations and decide whether professional support is right for you.
Need help with your new limited company? Contact us today for tailored advice.