Bookkeeping, tax filings, UK law compliance – all of them are some financial responsibilities of setting up and running a limited company. You can do it yourself and it is doable but you’ll save time, stress and avoid mistakes by hiring the accountant. But do you absolutely need an accountant for a limited company?

In this guide, we’ll go over what an accountant can do for your business, why you might want to consider hiring one, and the risks of trying to handle it all on your own.

 

What Can an Accountant Do for My Limited Company?

A limited company accountant job is much more than just tax. They make sure your business operates smoothly, stays compliant, and maximises profits. Here’s what they do for you:

 

1. Company Formation and Registration

An accountant can register the new limited company with Companies House (ensuring everything is set up properly, as it should be). They’ll offer advice on tax structures, shareholder agreements, and VAT registration, if necessary.

For instance, you get an accountant who makes sure that your company is registered correctly rather than you going through both the legal paperwork and the worry about problems with HMRC later.

 

2. Bookkeeping and Financial Records

Documents like invoices and receipts for all income, expenses, and payroll must be kept, as limited companies are expected to be transparent with their finances. This process is managed by an accountant, ensuring compliance and facilitating the preparation of financial statements.

For example, with professional bookkeeping, you won’t be scrambling at tax season trying to find receipts or balance your accounts.

 

3. Corporation Tax Returns and VAT Returns

Limited companies have to file an annual return for corporation tax and, if applicable, for VAT as well. An accountant sees to it that these are filed properly, and promptly, so that penalties are avoided.

For example, HMRC issues late filing penalties yet an accountant will ensure your returns are filed weeks before the deadline.

 

4. Payroll and PAYE (Pay As You Earn)

If your limited company has staff (including you as a director), you will have to run payroll and pay PAYE & National Insurance. This can be taken care of by an accountant so as to ensure accurate wage payments based on tax laws.

For example, payroll mistakes can result in fines or displeased employees — an accountant ensures that everyone is paid accurately and on schedule.

 

5. Business Tax Planning and Advice

A good accountant doesn’t simply crunch the numbers — they guide you into the future with tax-saving strategies and financial advice.

For instance, they may suggest a claim for additional expenses or restructuring your salary and dividends to minimise tax liability.

 

6. Annual Accounts Preparation and Filing

Annual accounts are required to be filed at Companies House for limited companies. These are prepared (and correctly) by an accountant as per the accounting standards.

For example, poorly completed accounts could incur penalties or even be referred to HMRC — an accountant makes sure everything is correct.

 

7. Handling HMRC Investigations and Audits

In addition, when HMRC contacts your business, an accountant can do all the dealings, communicate with the authorities and submit all the relevant documents for your case.

For example, If you are audited, an accountant can show that your books are in order and can deal with HMRC for you.

 

8. Cash Flow Management and Financial Forecasting

For small and medium enterprises, cash flow is one of the biggest challenges to manage. Accountants assist in monitoring income and expenses to ensure sufficient cash flow for operating costs.

For instance, a business with seasonal income and expenses would need an accountant to assist in developing a financial forecast to maintain enough liquidity during its off-season.

 

9. Helping with Business Loans and Investments

An accountant creates financial statements and business plans to help you win loans or raise investment money from external investors if you need outside funding.

For example, if a growing business is seeking to obtain some investment, it will need professionally prepared balance sheets and cash flow statements to show to potential investors.

 

 

The Benefits of a Limited Company Accountant

Your accountant will offer many benefits outside of mere compliance. Here are some key benefits:

 

1. Saves Time and Reduces Stress

Dealing with tax laws and compliance requirements is a time-consuming task when managing company finances. An accountant lifts this weight from your shoulders, freeing your time to run your business.

For example, a business owner can spend 10 hours a week on finances, but with automation, they can invest that time in business growth and client acquisition instead.

 

2. Ensures Compliance with HMRC and Companies House

As tax regulations change, accountants know the latest and greatest laws, so your business remains within the law and steers clear of penalties.

 

3. Helps You Save Money on Taxes

An accountant can cherry-pick the legal avenues available to an individual to bring down his or her tax bill –whether by claiming permissible expenses or structuring a salary in a way that is efficient.

 

4. Provides Business Growth Advice

The financial insights accountants provide can support you to scale your business, from cash flow forecasting to planning for staff and other investments.

For example, if your business is on a rapid growth trajectory, an accountant can advise you about when you should hire additional staff, and how to pay for that growth.

 

5. Prepares You for Business Loans and Funding

If you’re after a loan for your business, ensuring you have accurate financial records and professionally prepared accounts can strengthen your chances of attracting a loan or investors.

 

The Risks of Not Hiring an Accountant for Your Limited Company

Technically, it’s possible to handle your own accounts. However, the following major risks are identified:

• Errors in tax filings – Mistakes in your corporation tax return or VAT filings may cause fines or, even worse, HMRC audits.
• Missed deadlines – Late filing penalties shall quickly add up and negatively impact the financial well-being of your company.
• Lost tax-saving opportunities – Lacking expert knowledge, you could be leaving valuable tax reliefs, deductions, and opportunities on the table.
• Compliance issues – Incorrectly filed accounts, payroll errors, and so forth may result in some of the gravest legal ramifications.
• Increased workload and stress – Records management takes precious time away from growing your business and remains a significant source of stress.

Many business owners definitely start by doing it themselves but appreciate the risks and switch to a professional accountant.

 

When Is the Best Time to Get a Limited Company Accountant?

While the specific timing of hiring an accountant will depend on the stage of your business, there are several key moments to consider along the way.

• At company formation – To avoid misunderstandings from day one.
• Before your first tax return – To avoid penalties and capitalise on tax-saving opportunities.
• When your business starts growing – More transactions mean more complexity, and that makes an accountant a must-have.
• If you’re struggling with finances – When you find that bookkeeping is costing too much time – it’s a clear indicator you need professional assistance.

Even if your company has been operational for some time without an accountant, you can still reap great rewards from hiring one.

 

 

Why You Should Choose Reed & Co. as Your Limited Company Accountants

Reed & Co. provides tailored services specifically for limited companies should you be seeking an experienced and reliable accountant. Here’s what business owners can depend on from us:

• Expertise in limited company accounting – We have extensive experience dealing with financial matters. We serve only limited companies in the UK and make sure they stay compliant.
• Personalised service – Our priority is to understand your business so we can provide effective tax planning and tailored financial advice.
• Affordable and transparent pricing – No gimmicks — only simple pricing to help you plan your spending. 
• Proactive tax-saving strategies – Our compliance service doesn’t just stop at form-filling, we proactively find the ways you can save on tax and maximise profits
• Dedicated support – Our staff is available to help when you need support with tax filings, payroll, or financial planning.

Reed & Co. streamlines your limited company finances so you can concentrate on doing what you do best — growing your business.

 

FAQs

 

1. Do I legally need an accountant for my limited company?

No, you are not legally required to hire an accountant. However, due to the complicated nature of company accounting and tax laws, many business owners opt to hire one to maintain compliance and save time.

 

2. How much does an accountant cost for a limited company?

Costs range from basic to full concierge service. Basic accounting services can start at approximately £50-£100 per month, whilst more comprehensive packages covering areas such as tax planning and payroll, can be higher.

 

3. Can I do my own limited company accounts?

Yes, but differs to a significant extent in tax laws as well as compliance. Most owners discover that employing an accountant saves them time, money, and stress in the end.