Limited company directors: do you have to hire an accountant?

When you become a director of a new limited company, you automatically take on a number of legal obligations. These include maintaining accurate records and accounts and submitting the required information to Companies House and HMRC on time.

In recent years, we have seen the rapid rise of excellent, time-saving online accounting software packages, such as QuickBooks, Xero, and ClearBooks.

These tools have made accounting far easier for company directors. You can submit VAT returns online, set up a company payroll, and even file your self-assessment returns.

But does this mean that you can take on all of your company’s accountancy duties yourself? Do you actually need an accountant for a limited company?

In fact, are you allowed to submit your company’s accounts yourself, assuming you are not a qualified accountant?

Are you legally required to hire an accountant?

No, you are under no legal obligation to hire an accountant. If your company meets the definition of a ‘small’ company, your business will also generally be exempt from audit, although there are exceptions.

(Note: These size thresholds were increased for financial years beginning on or after 6 April 2025.)

According to the current Companies House definition, a small company is one which meets at least 2 of the following:

• a turnover of £15 million or less.
• £7.5 million or less on its balance sheet.
• 50 employees or fewer.

Many one-person limited companies will fall within the smaller micro-entity regime. You can read more about the different company sizes and filing requirements in our guide to limited company annual accounts.

Always double-check the latest on GOV.UK, as thresholds and rules can evolve based on your accounting period.

From April 2028, Companies House accounts will have to be filed using commercial software.

8 reasons to hire an accountant for your limited company

From our experience of running small companies and working with hundreds of other small firms over the past 20 years, there are many powerful reasons to hire an accountant.

Here are some of them.

1. You could save time

Maintaining your company’s books isn’t easy for most of us.

Unless you have previous accounting experience, you may find that you spend a great deal of time maintaining your books.

Even with the assistance of online accounting software such as Xero (80% off for 6 months) and FreeAgent (30-day free trial, 10% off for life).

2. You could save your company money

A good accountant will make sure that your company doesn’t pay any more tax than it has to.

An accountant will understand the most tax-efficient way to run your business and ensure you comply with the rules.

What’s the most tax-efficient salary/dividend split, for example?

They can provide guidance on how best to extract profits from the company and make sure you claim the Corporation Tax reliefs and deductions your company is entitled to.

3. Essential help during the start-up process

What is the most tax-efficient way to set up your company’s share structure? Do you need several share classes?

Are you considering splitting shares with your spouse? All of these questions are crucial when setting up a new company.

4. Dealing with HMRC can be frustrating and stressful

If your accounting needs are minimal, your dealings with HMRC may also be hassle-free.

But, in reality, things go wrong, and mistakes need to be corrected.

From our experience, dealing with HMRC directly can be very frustrating for the uninitiated and is certainly a key reason to hire a professional experienced in dealing with the taxman.

5. Specialist tax knowledge

A knowledgeable accountant will know the most up-to-date tax rules and allowances and deal with the more familiar aspects of accounting, such as which expenses you can offset against your company’s Corporation Tax bill.

For small limited companies, essential issues include IR35, MSC legislation, CIS, and capital allowances.

An accountant can also help identify opportunities for R&D tax relief, creative industry reliefs, and other niche incentives, depending on your industry sector.

6. Avoid penalties

However diligent you are, with so many forms and returns to keep an eye on, it can be hard to manage tax deadlines if you decide to look after your own accounts.

Aside from Corporation Tax, VAT and PAYE obligations, all companies must submit an annual Confirmation Statement and Annual Accounts to Companies House. Your company’s accounts are also submitted to HMRC as part of its Company Tax Return.

You must also keep on top of your personal tax situation – via Self Assessment.

7. Avoid errors which could attract HMRC attention

HMRC uses a largely risk-based approach to compliance checks, although some checks are random.

Inaccuracies, inconsistencies or figures that don’t match information HMRC holds from other sources can attract attention.

An accountant should keep on top of your company’s tax deadlines and minimise the chances of avoidable errors being made.

Having said that, we always recommend taking out tax investigation insurance. It is relatively inexpensive and can cover eligible professional representation fees if HMRC opens an enquiry.

8. And finally…

The cost of hiring an accountant to manage your company’s affairs is fairly modest, given the amount of work and responsibilities they will take off your shoulders.

A good accountant will manage your company’s affairs, potentially save you money, and let you concentrate on what you’re good at – running your business.

Try our growing list of limited company accountants to get started!