How to find the best accountant for your limited company

Taking control of your company’s accounting and tax affairs can be tedious and stressful unless you have prior experience and spare time.

This is why hiring an accountant may be the best thing you do during the early days of running your limited company.

What’s in this guide?

• Why hire an accountant for your company?
• What will a limited company accountant do?
• What do you have to do for your accountant?
• How much do limited company accountants cost?
• How to choose the best accountant
• FAQs

Why hire an accountant?

Although there is no legal obligation to hire an accountant, there are some strong reasons to do so.

Most limited companies hire a specialist accountant to:

• Help with the initial company set-up process.
• Look after the company’s ongoing tax and accounting affairs.
• Deal with HMRC and Companies House.

Over the past decade, scores of dedicated small company accounting firms have emerged, facilitated by significant advances in web-based accounting.

Software like the excellent FreeAgent has made life easier for small business owners and their accountants.

It’s never been easier (or more cost-effective) to outsource your firm’s tax work to an accountant.

What will a limited company accountant do?

A typical small business accountant will:

• Set up your limited company via Companies House (assuming you haven’t already done so).
• Register your company for Corporation Tax, Value Added Tax, and as an Employer (for payroll purposes).
• Set up and run a payroll system to pay directors and employees.
• Prepare and submit your company’s quarterly VAT returns.
• Bookkeeping (this may or may not be included).
• Complete HMRC payroll-related forms (such as the end-of-year P60).
• Complete the company’s Annual Accounts.
• Complete the Company Tax Return (CT600).
• Complete your personal tax return (for an additional fee).
• Provide mortgage or tenancy references (possibly chargeable).
• Deal with HMRC and Companies House correspondence on an ongoing basis.
• Submit a Confirmation Statement each year (possibly chargeable).
• Set up a limited company bank account on your behalf.
• Conduct or facilitate IR35 contract reviews, if you provide professional services (for an additional fee).

What do you have to do for your accountant?

Your accountant will take care of your company’s tax and accounts, but their records will only ever be as accurate as the information you provide them.

It is worth noting that the directors, not your accountant, are ultimately responsible for the accuracy and timeliness of all tax returns.

Here are some of the tasks you need to take care of as a company director:

• Keep your accountant updated with any company personnel changes, salary levels, etc.
• Regularly upload records of all income and expenditure (usually via online accounting software).
• Respond to your accountant if they ask you to provide bank statements or other records.
• Check draft VAT, Corporation Tax, personal returns, and other types of paperwork.

How much do limited company accountants cost?

Costs vary between firms, depending on the expertise they provide you and the work you expect them to do.

If your company’s affairs are relatively straightforward (for example, if you’ve set up in business as a professional contractor), you can choose from a large selection of specialist accountants.

They charge anything from £70 to £180 per month for core support.

The more ‘add-ons’ you require (including insurance, bookkeeping, etc.), the more you can expect to pay.

Here are some of the small company specialist accountants we work with at LCH:

Accountant	Monthly Cost	Notes
Aardvark Accounting	£89	Full service, including FreeAgent software, payroll, tax advice.
Clever Accounts	£104.50	Package for sole traders starts from £37.50 per month.
SG Accounting	£119	Full package, contractor specialists. Half price offer currently available.
Vantage Accounting	From £79	Price based on up to £85k turnover. Small company specialists.Half price offer available.

For a comprehensive list of firms, here is a useful cost comparison table of 30+ specialist accountancy firms.

How to choose the best accountant

From our experience, one of the best ways to choose an accountant is via recommendations from people you know and trust.

Don’t necessarily look at price in isolation.

Good customer service is arguably more important, as there’s nothing worse than an unreliable accountant.

Some firms operate a kind of ‘conveyor belt’ system, so you may not know who to contact on a day-to-day basis if you have a query. So, before you sign up, find out if you will have a dedicated point of contact.

A good accountant will not only save your company money, but will also provide reassurance that your financial affairs are being looked after, tax deadlines are being met, and potential problems are spotted in advance.

Costs

Although cost should not be the most important factor to consider, inevitably, no company owner wants to pay more than necessary to secure a professional service. There are several ways accountants charge their clients:

• Annual fee – to cover all fundamental accounting tasks, including compiling your Annual Accounts, processing your payroll, VAT reconciliation, dealing with official paperwork, etc.
• Monthly fee – most contractor accountants charge for a full accounting service on this basis, in a very competitive market.
• Time basis – you may prefer to pay your accountant for the time they spend on your account. Additional services provided on top of annual/monthly fees will also usually be chargeable.

When choosing an accountant, compare like with like. This is easier with contractor-type packages, but for general accountancy services, ask two or three firms to provide a quote.

Find out more in our guide to typical accountancy costs.

Firm profile

Do you want to hire a small, local firm or a larger, perhaps less personal service? How long has the accountant been established, and what other services do they provide?

Specialists?

Do they specialise in particular types of clients, such as contractors, engineers, or dentists?

It makes a lot of sense for certain professions to hire a specialist, as they will know specific tax legislation or regulations that affect your sector.

If you provide personal services (e.g., as an IT contractor, consultant, interim, etc.), the biggest single threat to your prosperity is the Intermediaries Legislation (IR35), so only hire an IR35-savvy accountant.

Modern or traditional?

What type of service does your accountant provide?

Most small companies value the time-saving benefits of cutting-edge technology over tolerating frustrating ‘old school’ methods of communication.

There are several excellent online accounting systems, such as Xero and FreeAgent, which sit between client and accountant – massively simplifying the accounting process.

Unless your accountant has a robust bespoke online system, they should be familiar with one of these third-party tools. Your life will be massively simplified as a result.

Qualifications

Is your accountant’s firm a member of a professional body, such as the ICAEW or ACCA?

Although day-to-day accounting tasks can be completed by non-qualified staff (this is not unusual), you should expect tax planning advice to be provided by a qualified person.

Get recommendations

Several of the leading small business accountancy firms we work with at LCH take on over 50% of their new clients via word-of-mouth recommendations.

If you have any trusted friends and colleagues who have had good experiences with their accountants, their views could prove invaluable.

Unfortunately, in our experience, it is hard to use ratings or popularity indicators from the web to determine a firm’s quality, as such measurements are easy to manipulate.

For this reason, recommendations from real people are essential.

Try our directory of limited company accountants as a starting point.

Conclusion

Choosing the right accountant is one of the most important decisions for your limited company. Compare services carefully, don’t focus only on cost, and make sure your accountant understands your sector and preferred way of working. The right choice can save you time, stress, and money.

Some common limited company accountant FAQs

What’s the difference between a bookkeeper and an accountant?

A bookkeeper records day-to-day transactions. An accountant handles tax submissions, compliance, and financial interpretation. Many small business accountants bundle basic bookkeeping within their monthly services.

Can I change accountants mid-year?

Yes. Your new accountant will contact your previous one to arrange a smooth handover, including professional clearance and records transfer. Be aware of any minimum notice period or fees in your original agreement.

Do I need a local accountant?

Not necessarily. Most contractor accountants operate online. What matters more is industry experience, good communication, and familiarity with tools like FreeAgent or Xero.

Will my accountant help with IR35 reviews?

Many contractor-specialists offer IR35 reviews or partner with legal specialists. Always check if this is included or an additional service. It’s usually inexpensive.

Can my accountant help set up a business bank account?

Most accountants have banking partners, so will be very happy to set up an account for you. They’ll usually get a commission for doing this, so you won’t be charged!

What software do most accountants recommend?

Most limited company accountants use cloud software like FreeAgent, Xero, or QuickBooks to streamline expenses, invoices, and tax tracking. Both you and your accountant can log on and see your data at any time.

Is my accountant responsible if something goes wrong with HMRC?

No. Ultimately, you are legally responsible as the company director. A good accountant helps reduce risk and ensure compliance, but the liability remains with you.

Can I handle my own accounts and just have them reviewed?

Yes, but it’s only advisable if you’re confident in your accounting knowledge. In our experience, only a very few company directors can manage the accounts without professional help!

Do I still need an accountant if I use FreeAgent or Xero?

Yes. While accounting software handles data entry and automation, your accountant does a lot more – including compliance, filing all of your returns, and offering tax advice.

How can I tell if my accountant is doing a good job?

They should respond promptly, explain things clearly, file everything accurately and on time, plus identify tax-saving opportunities. If not, you might need to switch.

What happens if I pay dividends incorrectly?

HMRC may reclassify unlawful dividends as salary or loans, resulting in a nasty tax bill. Your accountant should check that there are sufficient retained profits before issuing dividends. Your accounting software should also show how much retained profit your company has at any one time.

Can I claim accountant fees as a business expense?

Yes. As long as the services relate to your company’s activities (not your personal finances), the fees are deductible against Corporation Tax. You can’t claim the costs of completing your personal tax return, although many accountants will do this for ‘free’.

Do I need a separate accountant for my personal tax return?

Many limited company accountants will complete personal tax returns (Self Assessment) as an add-on. Check if this is ‘free’ or charged separately.

What is a confirmation statement and will my accountant do it?

It’s a Companies House filing that confirms your company’s details each year. Most accountants handle it, but some will charge the statutory £34 fee.

Will I get a dedicated accountant or account manager?

It depends on the firm. Some offer a single point of contact, others use a support team model. Ask upfront, as this is an important consideration for many small company directors.

Can I hire an accountant just for the year-end accounts?

Yes. Some firms offer year-end-only services, but this requires you to keep accurate records throughout the year. There’s a lot more to accounting than keeping your accounting software up to date!

What qualifications should a limited company accountant have?

Look for credentials such as ICAEW, ACCA, or AAT. These ensure your accountant is trained, regulated, and up-to-date with tax law. Often, the firm itself is accredited.