Do You Need an Accountant for a Limited Company in the UK?

If you have just incorporated, the question comes up almost immediately: do you need an accountant for a limited company in the UK, or can you file everything yourself? The short answer is that there is no legal obligation to appoint one — but the director carries personal responsibility for every filing, and that is where most people decide the fee is worth paying.

This guide sets out exactly what a limited company must file, what it costs to get it wrong, when doing it yourself is realistic, and what a good accountant actually does beyond compliance.

The Legal Position: No, You Do Not Have To

Nothing in the Companies Act 2006 requires a small private company to appoint an accountant. Most small companies are also exempt from audit, so long as they meet two of the three thresholds: turnover under £15m, balance sheet total under £7.5m and no more than 50 employees (these limits apply to financial years starting on or after 6 April 2025).

What the law does require is that the company’s accounts are accurate and filed on time — and that duty sits with you as director, not with whoever prepared them. HMRC and Companies House pursue the company and its officers, not the software you used.

What a UK Limited Company Must File Every Year

Even a one-person company with modest turnover has a fixed compliance cycle:

• Annual accounts to Companies House — within nine months of your accounting reference date, prepared under FRS 105 (micro-entity) or FRS 102 1A.
• Company Tax Return (CT600) to HMRC — within 12 months of the period end, with accounts tagged in iXBRL.
• Corporation Tax payment — due nine months and one day after the period end, which is earlier than the return itself.
• Confirmation statement — at least once every 12 months, confirming directors, shareholders, share capital and registered office.
• VAT returns — quarterly if registered, filed under Making Tax Digital.
• PAYE and RTI submissions — every time you run payroll, including a director-only payroll.
• Director’s Self Assessment — reporting salary, dividends and any other income.
• Dividend paperwork — board minutes and dividend vouchers for every distribution, paid only out of retained profit.

You can read the official filing requirements on GOV.UK’s running a limited company guidance and check your own deadlines on the Companies House service.

What It Costs to Get It Wrong

The case for an accountant is rarely about bookkeeping — it is about penalties and overpaid tax.

• Late accounts at Companies House: £150 up to one month late, rising to £1,500 over six months, and doubled if you also filed late the year before.
• Late CT600: £100 immediately, a second £100 after three months, then tax-geared penalties of 10% of unpaid tax.
• Late Corporation Tax payment: daily interest from day one, charged by HMRC at a rate linked to base rate.
• Illegal dividends: dividends paid without sufficient retained profit can be reclassified as a director’s loan and taxed under s455.
• Missed reliefs: unclaimed capital allowances, the Employment Allowance, home-office costs, mileage and pension contributions quietly cost more than most annual fee quotes.

Directors who overpay tax usually do so not by making mistakes, but by never being told the option existed. Our breakdown of how much an accountant costs for a UK small business puts those fees next to the penalties they prevent.

When Doing It Yourself Is Realistic

Self-filing genuinely works for some companies. It tends to be viable if:

• the company is dormant or pre-revenue, with no payroll and no VAT;
• you are not VAT registered and have very few transactions;
• you take a single salary and no dividends, or no salary at all;
• you are comfortable with FRS 105, iXBRL tagging and the HMRC/Companies House joint filing service.

It becomes a false economy once you register for VAT, take on staff, pay yourself in salary and dividends, buy equipment or a vehicle, lend money to or borrow from the company, or bring in a second shareholder. Each of those adds a decision with a tax consequence, not just another entry to record.

What a Good Accountant Actually Does for a Limited Company

Compliance, handled

Statutory accounts, the CT600, confirmation statement, VAT returns, payroll and RTI, plus your personal Self Assessment — filed on time, from one set of records. A specialist accountant for limited companies runs this as a calendar, so nothing arrives as a surprise.

Paying yourself efficiently

The salary and dividend mix is the single biggest lever most director-shareholders have. It needs reviewing every tax year as thresholds, National Insurance and the dividend allowance change — see our current figures on salary vs dividends for limited company directors.

Keeping the director’s loan account clean

Money moving between you and the company is the most common source of unexpected tax bills. Our guide to the director’s loan account explains the s455 charge and the benefit-in-kind trap.

Planning, not just reporting

Forecasting your Corporation Tax before year end, timing asset purchases, deciding when VAT registration helps or hurts, funding a pension through the company, and telling you what the numbers mean while you can still act on them.

Contractors have an extra layer again, since IR35 status affects how the company should be paid — covered in our contractor and IR35 guide.

Accountant vs Accounting Software

Software and an accountant solve different problems. Xero or QuickBooks will capture invoices, reconcile the bank and file a VAT return. Neither will decide your remuneration, judge whether a cost is allowable, prepare FRS 105 accounts or spot that a dividend exceeded distributable profit. In practice, the cheapest reliable setup for a small company is good software plus a fixed-fee accountant reviewing it.

How to Choose One

• Qualified and regulated — ACCA, ICAEW or equivalent, with professional indemnity insurance.
• Fixed fees, quoted upfront — you should know the annual cost before you sign anything.
• Limited company experience — specifically director-shareholder companies of your size and sector.
• Cloud-based — working in your accounting software, not asking for a shoebox of receipts in January.
• Proactive — contacting you before year end, not six months after it.

If you are weighing up local firms, our guide to choosing the right accountant covers the questions worth asking. Companies that are still growing into their first employees may also want our small business accountant service.

The Verdict

You do not legally need an accountant for a UK limited company. But once the company is trading, registered for VAT, running payroll or paying dividends, the fee usually costs less than a single missed deadline or an inefficient pay structure — and it moves the risk of getting it wrong off your desk.

We look after limited companies across Lancashire and Greater Manchester, from our Blackburn office. Directors nearby often work with our accountants in Chorley and accountants in Preston pages, and you can see the full picture on our accountants in Blackburn page — fixed monthly fees, quoted upfront, and a free 30-minute consultation to start.

Frequently Asked Questions

Do you need an accountant for a limited company in the UK?

Legally, no. There is no rule that a UK limited company must appoint an accountant, and directors can file their own accounts and Corporation Tax return. In practice almost all companies do use one, because the director is personally responsible for filings being accurate and on time, and the penalties for getting them wrong cost far more than the fees.

Can I do my own limited company accounts?

You can, if you are confident preparing statutory accounts under FRS 105 or FRS 102, tagging them in iXBRL, filing a CT600 with HMRC and running payroll and dividend paperwork correctly. Most directors who try it spend several days a year on it and still ask an accountant to review the result.

How much does an accountant cost for a limited company?

Most small UK companies pay a fixed monthly fee covering bookkeeping, VAT returns, payroll, year-end accounts, the Corporation Tax return and the director’s Self Assessment. The fee depends on turnover, VAT registration and how many people you pay, and it should be quoted upfront rather than billed by the hour.

What happens if I file my company accounts late?

Companies House issues an automatic late filing penalty starting at £150 and rising to £1,500 the longer accounts are overdue, and it doubles if you filed late the previous year too. HMRC charges separate penalties and interest for a late Corporation Tax return and payment.

Is an accountant or accounting software enough for a limited company?

Software such as Xero records the transactions; it does not decide your salary and dividend split, check your Corporation Tax position or sign off statutory accounts. Most companies use both — software for day-to-day bookkeeping and an accountant for compliance and planning.