Accountant For A Limited Company

Unless you have the expertise and skills of an accountant, you will almost certainly need to engage the services of an accountant for your limited company. Accountants do much more than just prepare balance sheets and profit and loss accounts; they ensure legal compliance, spot risks, advise on business strategy, and perform audits, to name just a few of their services. As we will discuss in this article, with an experienced, reliable and trusted accountant by your side, you can ensure that your business is run effectively and efficiently from a financial standpoint and continues to meet its legal obligations as a company. 

There is nothing in company law that says that your limited company must engage the services of an accountant. It is, however, a legal requirement to submit properly prepared accounts to Companies House and tax returns to HMRC each year. So, while an accountant is not mandatory, they are essential and invaluable. 

It may be reasonable not to have an accountant for a micro business entity with an owner or director who has a background in accounting. Even in this situation, it is still recommended to engage the services of an accountant to reduce the level of administrative burden and stress and have an impartial set of eyes looking at the business. 

What can an accountant do for a limited company?

You may be surprised at the breadth of services provided by an accountant. Far from simply preparing accounts, accountants carry out lots of other tasks, all of which are vital for the effective administration of a limited company. It is no exaggeration to say that the range of services offered by accountants is vast. The following is just a small sample of the many services provided by accountants for limited companies:

  • Account analysis
  • Advise on how to gain efficiencies and cost-savings
  • Advise on tax (VAT, personal tax, corporate tax, and HMRC tax allowances)
  • Advise on internal systems and controls
  • Advise on legal compliance
  • Assist with business strategy and growth
  • Bookkeeping – bookkeeping involves the day-to-day management of a company’s financial records (e.g. organising financial paperwork such as receipts, recording financial transactions, and preparing financial statements)
  • Carry out financial audits
  • Deal with any questions or queries raised by HMRC or Companies House 
  • Financial modelling and forecasting
  • Handle payroll and PAYE
  • Perform risk analysis
  • Prepare and review the accuracy of your financial statements and reports
  • Prepare and submit tax returns to HMRC
  • Prepare limited company annual accounts
  • Register company for VAT with HMRC
  • Register company with Companies House 
  • Recording and categorising business expenses

Do I need an accountant if I use accounting software?

Modern online accounting software such as Xero, QuickBooks, and Sage can handle many of the tasks performed by accountants for your limited company, but they do not replace the role of the accountant. Many limited companies use accounting software to capture day-to-day financial and accounting information and handle tasks such as invoice, payroll, and expense management. Accountants then use the information gathered within the software to prepare company accounts and tax returns. The latest online accounting software can also perform these tasks, but an accountant will ensure that they are correct prior to submission to Companies House and HMRC. For example, they will check that transactions are posted to the correct ledgers and that expenses have the correct VAT for VAT returns. This reveals the fundamental problem of relying solely on accounting software; the output is only ever as good as the input. So, if you have entered information incorrectly, the chances are that your payroll, accounts, or tax returns will also be incorrect.

Also, remember that an accountant can do much more for you than accounting software. Your accountant can discuss your plans for growth, explain the latest tax rules, and answer any queries you have. The benefit of having a human being is that they are on hand to discuss and handle your accounting matters is invaluable. Accounting software is a tool, but it is not a complete panacea when it comes to financial accounting. 

Do I need an accountant for a small or micro company?

If you run a small company or a micro business entity, there is no legal requirement to have an accountant. Even if your turnover and number of employees are small, you are still required to prepare and submit accurate annual accounts to Companies House and tax returns to HMRC. Most small business owners still have an accountant to handle their accounts and financial returns, giving them peace of mind and taking the weight of administration from their shoulders.

One area where an accountant may not be legally required for a small company is in the area of financial accounts auditing. Regulated accountants (e.g. ACCA qualified accountants) often carry out audits of company accounts. An audit is an independent assessment of a limited company’s accounts that is performed by a specialist in this area. Limited companies with members have a legal duty to provide details of their financial position to shareholders and have an audit, which is then submitted to Companies House each year. However, this is not a legal requirement for limited companies with an exemption. Your limited company will be exempt from the auditing requirement if it has at least 2 of the following:

  • an annual turnover of no more than £10.2 million
  • assets worth no more than £5.1 million
  • Fifty or fewer employees on average.

Do I need a qualified accountant for my limited company?

There is no doubt that a qualified accountant is preferable to one without suitable qualifications. In the UK, however, there is no legal requirement for accountants to be qualified. For this reason, to ensure the quality of your accounts, we recommend engaging the services of an accountant with a recognised accounting qualification. Look for an accountant with an ACCA (Association of Chartered Certified Accountants) or ACA (Associate Chartered Accountant) qualification. This will give you the confidence that your accountant has received the training necessary to properly handle your limited company accounts. 

How much does an accountant cost?

As with many professions, accountant fees can vary significantly. Large businesses typically hire in-house accountants to handle their accounting and financial requirements. Many businesses instruct an external accountant on a retainer basis, paying them a fixed amount of money each month. Monthly accounting fees can range from £60 to over £500 per month, depending on the size of your business and the extent of your needs.

Other reasons to engage an accountant

Peace of mind

Having a trusted accountant as a member of your team will give you enormous peace of mind that your accounts and finances are in order. Remember, as a director of a limited company, you are legally responsible for the information you send to Companies House and HMRC, not your accountant. As such, if something goes wrong, you cannot simply blame the accountant. While you may be able to seek compensation from their professional negligence insurance, you are still responsible for any filings and any mistakes in those filings. This is why finding a qualified, experienced, and professional accountant who you can trust is vital. 


Your accountant will save you an enormous amount of time, which you can then redirect into your business and other matters. Accountants can complete a task that may take you several hours or days much faster and with greater accuracy. Do what you do best, running your limited company; leave the accounting to the accountant.

Knowledge of the latest laws and regulations

Accountants are up to date with the latest company and tax laws, rules, and regulations. With the best will in the world, it is unlikely that you will have the time while running your business to keep abreast of changes in the law in the area of accounting. Accountants also understand how to apply the law and any recent changes because they are constantly doing the same type of work for other clients. 

Final words

It may be tempting to save some money by handling your own limited company accounts or relying solely on your accounting software to do so. As your business starts to grow and succeed, the chances are that you simply will not have the capacity to take on the administrative burden of accounting. As with any aspect of business, you get what you pay for. The same can be said of contracts. Many business owners will use a free online template for a commercial contract to save money without realising the risks of doing so until it is too late. Don’t take everything on your own shoulders; we can introduce you to an accountant who will give you peace of mind that your limited company is meeting its financial and accounting obligations, allowing you to focus on what you do best: running your business.

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