Which Accountant Do I Need? Ltd Company, Sole Trader or Both
Packages for growing limited companies start from £85pm+, but the right accountant depends on how your business is structured and what support you need.
If you are wondering which accountant you need, you are not alone. A sole trader may need help with bookkeeping and Self Assessment, while a limited company usually needs support with annual accounts, Corporation Tax, Companies House and director responsibilities.
Add VAT, payroll or business growth to the mix and choosing the right service becomes even more important.
This guide explains the main options in simple terms, so you can decide what type of accountant is right for your business.
First, understand your business structure
Most small businesses in the UK operate as either a sole trader business or a limited company.
A sole trader is legally the same person as the business owner. You keep the profits after tax, but you are also personally responsible for the business’s debts. GOV.UK describes sole trader businesses as the simplest structure to set up and manage.
A limited company is legally separate from its owners. It has its own records, tax responsibilities and reporting duties. The company director is responsible for making sure these duties are met, even when an accountant is handling the paperwork.
You can read the official guidance on setting up as a sole trader or setting up a private limited company.
Your structure affects the type of accountant you need.
If you run a limited company
A limited company accountant should understand more than basic bookkeeping. They should be comfortable dealing with company filings, Corporation Tax and the way directors take money from a company.
A suitable limited company accountant may help with:
- Statutory annual accounts
- Corporation Tax calculations and returns
- Companies House filings
- Confirmation statements
- Director salary and dividend planning
- Director Self Assessment
- Bookkeeping and management accounts
- VAT returns
- Payroll and workplace pensions
- Cash-flow forecasting and business planning
This is especially important if your business is growing, taking on staff, becoming VAT registered or paying you through a mixture of salary and dividends.
A limited company accountant can also help you keep personal and business finances separate. That matters because money taken from a company must generally be recorded correctly. For example, a payment may be a salary, dividend, expense reimbursement or director’s loan. Treating everything as a simple withdrawal can create problems later.
You can learn more about the support available from a limited company accountant.
When should a limited company hire an accountant?
You do not have to appoint an accountant by law. However, many directors choose to do so from the beginning because limited companies have more reporting responsibilities than sole traders.
It is sensible to speak to an accountant before or soon after incorporation if:
- You are setting up your first limited company
- You expect the business to grow quickly
- You will pay yourself a salary or dividends
- You have more than one director or shareholder
- You plan to employ people
- You need VAT registration
- You want help with business funding or tax planning
- You are moving from sole trader status to a limited company
The earlier you get advice, the easier it is to set up good systems. Waiting until accounts or tax returns are overdue can limit your options and make the work more expensive.
If you are a sole trader
A sole trader usually needs a self-employed or small business accountant rather than a specialist corporate accountant.
The core services often include:
- Recording income and expenses
- Bookkeeping
- Checking allowable business expenses
- Calculating business profit
- Preparing and filing a Self Assessment tax return
- Advising on payments on account
- VAT support if your business is registered
- Payroll support if you employ staff
A sole trader must keep accurate records to work out the profit or loss for their tax return. You may need to register for Self Assessment if your gross trading income is more than £1,000 in a tax year, although other rules can apply.
If you are self-employed and also work for an employer, you may still need to report your business income through Self Assessment.
A self-assessment accountant can help you check what needs to be reported and avoid common errors.
When might a sole trader need more support?
Basic year-end accounts may be enough if you have a straightforward business, few transactions and no employees.
You may need a broader service if:
- Your turnover is increasing
- You are registered for VAT
- You have employees or subcontractors
- You work in construction and need CIS support
- You have stock or complex expenses
- You are buying equipment or business assets
- You are considering becoming a limited company
- You need regular cash-flow information
A bookkeeping-only service may keep your records tidy, but it may not include tax planning or advice about your business structure. Ask exactly what is included before you agree to a price.
Should you use one accountant for both?
Sometimes, yes.
You may be a sole trader who also owns a limited company. Alternatively, you may have a personal Self Assessment return alongside your company’s accounts. In these situations, using one accountant can make communication easier.
One firm may be able to manage:
- Your limited company accounts
- Corporation Tax
- Your personal Self Assessment
- Salary and dividend records
- VAT returns
- Payroll
- Bookkeeping
- Business and personal tax planning
However, do not assume that every accountant who prepares sole trader accounts also has strong limited company experience. Ask whether they regularly work with businesses like yours.
You should also check whether personal tax returns are included in the monthly fee or charged separately. Many limited company packages cover the company’s accounts but not the director’s personal return.
VAT and payroll: specialist services to check
Your business structure is only part of the decision. You should also consider the services your business needs now and may need soon.
VAT
You must generally register for VAT when your taxable turnover goes over the current registration threshold of £90,000, or if you expect to exceed it in the next 30 days. Voluntary registration may also be possible below the threshold.
The rules can change, and the calculation is based on taxable turnover rather than simply the money in your bank account. Check the latest information on VAT registration through GOV.UK.
If you are VAT registered, ask whether your accountant will handle:
- VAT registration
- Choosing an appropriate VAT scheme
- Preparing quarterly VAT returns
- Making Tax Digital records and submissions
- VAT on expenses and business purchases
- Queries from HMRC
You can also view Accountant Search’s VAT accountant service.
Payroll
Payroll is not just about paying wages. Employers normally need to calculate deductions, provide payslips and report pay information to HMRC.
If you employ staff, ask whether your accountant handles:
- Monthly or weekly payroll
- PAYE and National Insurance calculations
- Full Payment Submissions to HMRC
- Payslips
- Workplace pension duties
- New starter processes
- Payroll year-end work
- Director payroll
You can read the official GOV.UK payroll guidance before speaking to potential accountants.
A limited company director who pays themselves through PAYE may also need payroll support, even if there are no other employees.
How to choose the right accountant
If you have searched for how to find an accountant for small business uk, start with your actual needs rather than choosing the cheapest headline price.
Ask each accountant:
- Do you work with businesses in my structure and industry?
- What is included in the monthly fee?
- Are VAT returns included?
- Is payroll included?
- Is the director’s Self Assessment included?
- Will you deal with Companies House and HMRC filings?
- Which accounting software do you support?
- Who will be my day-to-day contact?
- How quickly do you normally respond?
- Are there extra charges for phone calls, bookkeeping or year-end work?
You should also check qualifications, professional memberships, insurance and the firm’s approach to data security.
A good accountant should explain things clearly, tell you what they need from you and make deadlines easy to understand. You should not feel pressured into services your business does not need.
How Accountant Search can help
Searching for “find an accountant uk” can bring up hundreds of firms, which makes comparing them difficult.
Accountant Search helps business owners explain what they need and connects them with suitable accounting professionals. Whether you need a limited company accountant, Self Assessment support, VAT help or payroll services, the aim is to make the search more focused.
You can find an accountant for your business and provide details about your structure, location and required services. The information helps identify accountants who may be a better fit for your situation.
The simple answer: which accountant do you need?
- Sole trader with simple finances: choose a sole trader or self-employed accountant who handles bookkeeping and Self Assessment.
- Sole trader with VAT, staff or growing turnover: choose a small business accountant offering VAT, payroll and ongoing advice.
- Limited company: choose a limited company accountant experienced with annual accounts, Corporation Tax, Companies House and director tax.
- Limited company plus personal tax needs: choose a firm that can handle both company accounts and your personal Self Assessment.
- Growing SME: look for a broader fixed-fee service that can support bookkeeping, VAT, payroll, tax filings and business planning as you grow.
The best accountant is not necessarily the most expensive or the closest to your office. It is the one that understands your structure, covers the services you need and can continue supporting the business as it develops.
Author: Sam