Choosing the right accountant for your limited company is one of the most important business decisions you'll make. A good accountant doesn't just file your accounts—they help you understand your finances, save on tax, and avoid costly mistakes.
This guide will help you understand when you need an accountant, what to look for, and how to find the right fit for your business.
Do You Actually Need an Accountant?
Legally, you don't have to hire an accountant for a UK limited company—you can prepare and file your own accounts and tax returns. However, for most business owners, working with an accountant makes sense because:
- Tax and accounting rules are complex: Getting things wrong can be expensive
- Accountants save you money: Good tax planning often saves more than the accountant costs
- It saves you time: Time you can spend on growing your business
- You get professional advice: Help with business decisions, not just compliance
- Peace of mind: Knowing your accounts are correct and submitted on time
Many micro-entities do their own day-to-day bookkeeping but have an accountant review and file their annual accounts. This is often the most cost-effective approach.
What to Look for in an Accountant
1. Qualifications and Professional Body Membership
Look for accountants who are members of recognised professional bodies such as:
- ICAEW (Institute of Chartered Accountants in England and Wales)
- ACCA (Association of Chartered Certified Accountants)
- CIMA (Chartered Institute of Management Accountants)
- AAT (Association of Accounting Technicians)
Membership means they follow professional standards, have relevant qualifications, and carry professional indemnity insurance.
2. Experience with Businesses Like Yours
Every business is different. Look for an accountant who:
- Has experience with micro-entities or small limited companies
- Understands your industry or sector
- Works with businesses at your stage (startup, established, growing)
- Is familiar with the accounting method you use (cash-basis, accruals)
An accountant who mainly deals with large companies may not be the best fit for a micro-entity, and vice versa.
3. Services Offered
Different accountants offer different levels of service. Consider whether you need:
- Compliance only: Annual accounts, tax returns, Companies House filing
- Bookkeeping support: Ongoing help with recording transactions
- Management accounts: Regular reports on business performance
- Tax planning: Proactive advice on minimizing tax
- Business advice: Guidance on financial decisions and strategy
- Payroll services: If you employ staff
- VAT returns: If you're VAT-registered
For micro-entities, you might only need basic compliance services, or you might want more hands-on support.
4. Communication and Availability
You need an accountant who:
- Explains things in plain English, not jargon
- Responds to queries in a reasonable timeframe
- Is proactive about contacting you when needed
- Uses communication methods that work for you (email, phone, video calls)
- Makes you feel comfortable asking questions
Trust your instincts—if someone makes you feel stupid for asking questions, they're not the right fit.
5. Technology and Software
Ask about:
- What bookkeeping software they work with
- Whether they can work with your existing systems
- How you'll share documents and information
- Whether they use cloud-based tools (making collaboration easier)
If you're using (or planning to use) specific software like Xero, QuickBooks, or Bridgly, make sure they're comfortable with it.
Questions to Ask Before Hiring
Key Questions for Potential Accountants
- What professional qualifications do you have?
- Do you have experience with micro-entities in my industry?
- What services are included in your fees?
- How much will it cost? (Get a detailed breakdown)
- How often will we communicate?
- What's your typical response time for queries?
- Will I work with you directly, or a junior member of your team?
- What bookkeeping software do you recommend or work with?
- Do you provide proactive tax planning advice?
- What happens if I miss a deadline or don't provide information on time?
- Can you provide references from similar businesses?
- What's your process for annual accounts and tax returns?
How Much Should an Accountant Cost?
Accountant fees vary widely based on:
- Your business size and complexity
- The services you need
- Where the accountant is based
- Whether you do your own bookkeeping or they do it for you
Typical Costs for Micro-Entities
As a rough guide for UK micro-entities (as of 2025):
- Basic compliance (year-end accounts and tax return only): £400-£1,200 per year
- With basic tax planning and advice: £800-£2,000 per year
- Including monthly bookkeeping support: £100-£300 per month plus annual compliance fees
- Full-service (bookkeeping, payroll, all compliance): £200-£500+ per month
Prices can be lower if your bookkeeping is well-organized and higher if your affairs are complex or messy.
If someone offers to do your accounts for £150 per year, ask yourself how they can afford to do a proper job at that price. Quality professional services cost money. That said, don't overpay either—get quotes from several accountants.
Where to Find a Good Accountant
- Recommendations: Ask other business owners in similar situations
- Professional body directories: ICAEW, ACCA websites have "find an accountant" tools
- Local networking groups: Many accountants attend business networking events
- Online reviews: Check Google Reviews, Trustpilot, and business forums
- Your bank: Some banks have partnerships with accountancy firms
Red Flags to Watch Out For
Be cautious if an accountant:
- Promises unrealistic tax savings or "guaranteed" results
- Suggests schemes that sound too good to be true
- Is reluctant to explain their fees clearly
- Doesn't ask questions about your business
- Pressures you to sign up immediately
- Isn't registered with a professional body
- Has poor communication or takes weeks to respond
Making the Final Decision
Once you've spoken to a few accountants:
- Compare quotes: Look at what's included, not just the price
- Check references: Ask to speak with a couple of their existing clients
- Trust your gut: Do you feel comfortable with this person?
- Start with a trial: Consider engaging them for one year first
- Get it in writing: Make sure you have a clear letter of engagement
Remember, you're not married to your accountant. If things aren't working out, you can change. Good accountants will make the handover process smooth and professional.
Working Effectively with Your Accountant
Once you've found the right accountant, you can get better service by:
- Keeping good records throughout the year
- Responding promptly to their requests for information
- Being honest about your circumstances and concerns
- Asking questions when you don't understand something
- Keeping them informed of changes in your business
A good accountant-client relationship is a partnership. The better organized you are, the better service they can provide.
Make Your Accountant's Job Easier
Bridgly helps you organize your bookkeeping throughout the year, making it easier and cheaper to work with your accountant. Export a complete pack when you need it.
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