20 questions to ask a limited company accountant before you sign up

When you run a limited company, it’s normal to wonder exactly what your accountant is (and isn’t) supposed to do, who’s responsible for what, and where the line is drawn between their job and what you (the client) need to do.

Here, we cover some of the most common questions directors ask when choosing (or reviewing) an accountant.

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 typically deals with 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 accountant to arrange a smooth handover, including professional clearance and the transfer of records. 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, strong communication skills, and familiarity with tools like Xero (80% off for 6 months) and FreeAgent (30-day free trial, 10% off for life).

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 charged separately. Basic contract reviews are often low-cost, but detailed contract or legal reviews may carry an additional fee.

Remember that the written contract is only part of an IR35 status assessment. The actual working practices also matter.

Can my accountant help set up a business bank account?

Many accountants have banking partners and can help you set up a business account. This is often free to you, as the accountant may receive a referral fee from the bank.

What software do most accountants recommend?

Most limited company accountants use cloud-based software such as the excellent FreeAgent, Xero, or QuickBooks to streamline expense, invoice, 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?

Ultimately, you are legally responsible as the company director for meeting your company’s obligations. A good accountant helps reduce risk and ensure compliance, but appointing one doesn’t remove your responsibilities as a director.

That doesn’t mean an accountant has no responsibility for their own work. If an accountant makes a serious professional error, they may be liable to you for losses caused by their negligence.

Can I do my own accounts and just get them checked?

Yes, but it’s only advisable if you’re confident in your accounting knowledge. Limited company accounts involve a number of tax and statutory requirements, so make sure you understand exactly what you’re taking on before deciding to manage them yourself.

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

Not necessarily. There is no legal requirement for most limited companies to appoint an accountant. However, while accounting software such as FreeAgent, Xero, QuickBooks or Sage handles a lot of data entry and automation, an accountant can do much more, including compliance work, filing statutory returns, and offering tax advice.

Read our guide to whether you need an accountant for a limited company for more information.

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, and identify legitimate tax-saving opportunities. If not, you might need to switch.

What happens if I pay dividends incorrectly?

A company can only pay dividends from profits available for distribution. If there aren’t sufficient distributable profits, the payment may be an unlawful dividend and may need to be repaid or treated as a director’s loan, with potential tax consequences.

Your accounting software can help you keep track of retained profits, but the figures are only as reliable as the information entered. Your accountant can help make sure there are sufficient distributable profits before you declare a dividend.

Can I claim accountant fees as a business expense?

Yes. As long as the services relate to your company’s activities, accountancy fees are normally deductible when calculating your company’s Corporation Tax profits.

The cost of preparing your personal Self Assessment tax return is different because this is personal work. If the company pays the cost, there may be a tax or benefit-in-kind consequence for the director. Many accountants include a director’s Self Assessment return within their overall package or offer it as an add-on.

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

No. Many limited company accountants will complete personal tax returns (Self Assessment) as an add-on or as part of their package. Check whether this is included or charged separately.

What is a confirmation statement, and will my accountant file it?

It’s a Companies House filing that confirms your company’s details each year. Most accountants handle it, although some may pass on the statutory Companies House digital filing fee of £50 or charge an additional admin fee.

Will I get a dedicated accountant or account manager?

It depends on the firm. Some offer a single point of contact, while others operate a team-based support model. Ask upfront, as this is an important consideration for many 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 is more to limited company accounting than keeping software up to date.

What qualifications should a limited company accountant have?

Look for credentials from recognised professional bodies such as ICAEW, ACCA, AAT, ICAS or CIMA. These can provide reassurance about formal training and professional standards. Check who will actually be responsible for reviewing your company’s accounts and tax work.

What questions should I ask before hiring an accountant?

Ask whether they specialise in limited companies, what the fee includes, what software they use, and whether you will have a dedicated contact. See our top questions to ask an accountant.

Is my accountant familiar with the Managed Service Company (MSC) legislation?

A good contractor accountant should be very familiar with the MSC rules, which were introduced in 2007.

They should understand the distinction between providing normal professional accountancy services and the circumstances in which a business may be considered a Managed Service Company Provider involved with its client companies.

Will my accountant handle payroll for me?

Many specialist limited company accountants offer payroll services (e.g. for salary payments or director’s PAYE) – and will handle the monthly payroll for you and your employees. Confirm whether payroll is included in your package or available at extra cost.

Further resources

• For more help, read this popular guide: how to find the best limited company accountant.
• You can also start with our list of limited company accountants.