An accountant handles the financial reporting and tax compliance a UK business is legally required to produce. That means recording the money moving in and out, and filing the returns HMRC and Companies House expect on time. It covers six recurring jobs: bookkeeping, VAT returns, year-end accounts, a Corporation Tax return or Self Assessment return, payroll, and advisory work on top. Not every business needs all six. Not every business needs an accountant at all, and that’s the honest question this guide answers before it explains what each service involves.
This is a service-by-service breakdown, not a pricing page or a software comparison. Every tax figure below traces to a verified GOV.UK source, checked in August 2026. Where a rule is genuinely unverified, such as Making Tax Digital start dates or dividend tax rates, we say so rather than guess.
- An accountant covers six core jobs - bookkeeping, VAT returns, year-end accounts, Corporation Tax or Self Assessment returns, payroll and advisory work sit on top of each other, not as separate purchases.
- The VAT threshold is £90,000 - cross it in any rolling 12-month period and quarterly VAT returns become a legal requirement, not a choice.
- Self Assessment has one hard deadline - online returns for the 6 April 2025 to 5 April 2026 tax year, and any tax owed, are due by 31 January 2027.
- Corporation Tax is banded, not flat - 19% on profits up to £50,000, 25% above £250,000, with Marginal Relief tapering the rate in between.
- Not every business needs one - a sole trader with simple, low-turnover affairs can legally file their own return; complexity, not size, is what makes an accountant worth the fee.
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What Does an Accountant Actually Do for a UK Business?
An accountant handles the financial reporting and tax compliance a UK business is legally required to produce, plus the advice that keeps it solvent along the way. In practice, that breaks into six recurring jobs. Bookkeeping means recording every transaction. VAT returns apply once the business is registered. Year-end accounts are the annual financial statements. Limited companies file a Corporation Tax return; sole traders and partners file Self Assessment instead. Payroll applies wherever there are employees. Advisory work covers things like cash flow planning or structuring a director’s pay. Some accountants handle all six under one monthly fee. Others, particularly budget fixed-fee firms, charge for the annual filing only and expect the client to keep their own books. Which combination a business needs depends on its legal structure, whether it employs anyone, and whether it is VAT registered – not on how big it is.
Bookkeeping
Bookkeeping is the day-to-day recording of every sale, purchase, invoice and receipt in a form HMRC and Companies House can inspect. It is the raw material every other accounting job draws from. A VAT return, a set of year-end accounts and a tax return are each just a summary of the bookkeeping sitting underneath them. Many online accountants do this work for the client inside cloud accounting software. Budget fixed-fee firms instead expect the client to keep their own records and hand over a folder of receipts once a quarter, which is one reason their annual price is lower. A year of unsorted paperwork typically triggers a one-off clean-up fee before an accountant will start the actual filing. The bookkeeping has to be rebuilt before anything else can happen.
Software that automates expense capture and matches receipts to transactions as they happen keeps bookkeeping current instead of reconstructed at year-end. Our guide to spend management covers how that works alongside an accountant rather than instead of one.
VAT Returns
VAT registration becomes compulsory once a business’s taxable turnover passes £90,000 in any rolling 12-month period, not just at the end of a tax year. Once registered, a business must file a VAT return, almost always quarterly. This shows VAT charged on sales and VAT paid on purchases, with the difference paid to or reclaimed from HMRC. An accountant’s job here is time-sensitive rather than complicated. It means reconciling the underlying bookkeeping, applying the correct VAT treatment to each transaction, and submitting the return online before the deadline. Businesses under the threshold can register voluntarily, which lets them reclaim VAT on purchases but adds the filing obligation. Missing the £90,000 line without registering is a compliance failure, not a grey area. That’s why most accountants monitor a client’s rolling turnover rather than waiting to be told.
VAT return work is usually priced separately from an accountant’s core monthly fee. Budget firms in our guide to accountant costs charge roughly £29 to £30 per return on top of any package price, filed quarterly.
Year-End Accounts and Corporation Tax Returns
Every limited company must prepare annual accounts and file a Corporation Tax return, even in a year with no profit. Year-end accounts are the statutory financial statements, covering profit and loss, balance sheet and notes. They are filed with Companies House and used as the basis for the Corporation Tax calculation. Corporation Tax itself is banded. The small profits rate is 19% on profits of £50,000 or less. The main rate is 25% on profits above £250,000. Marginal Relief applies in between, tapering the effective rate from one band to the other. Both thresholds are reduced proportionately for short accounting periods and where a company has associated companies. An accountant’s job is to prepare the accounts, calculate the tax due under the correct band, and file the return. That’s materially more involved than a sole trader’s Self Assessment.
These two filings are effectively one job for most accountants: the accounts feed directly into the tax calculation, and firms bill them as a single fixed fee rather than two separate pieces of work.
Self Assessment
Self Assessment is the tax return sole traders, partners and company directors use to report income HMRC does not already collect through PAYE. The current tax year runs 6 April 2025 to 5 April 2026. A paper return is due by 31 October 2026. An online return is due by 31 January 2027, and any tax owed must be paid by the same date. A second payment on account is due the following 31 July where it applies. An accountant’s role is to gather income and allowable expenses, work out what is owed, and file before the deadline. Missing it triggers an automatic penalty regardless of how small the amount due is. For someone with one income source and few expenses, this is a job that can be done without help. For anyone with property income or multiple income streams, the return gets complicated enough that most people pay for it.
Directors usually need their own Self Assessment return in addition to the company’s Corporation Tax return, since the two report different things: company profit versus personal income drawn from the company.
Payroll
Payroll covers calculating and paying staff wages, deducting Income Tax and National Insurance through PAYE, and reporting each payment to HMRC on or before payday. Many accountants offer payroll as an add-on to their core service, priced per payslip or per month per employee. It’s a recurring monthly job rather than an annual filing. Getting it wrong has consequences beyond an unhappy employee. Incorrect PAYE reporting or late payment can trigger HMRC penalties for the employer, not just a correction next month. Businesses with a handful of staff often run payroll through their accountant by default. Larger or more complex payrolls sometimes move to a dedicated payroll bureau or software instead, because the volume of monthly processing outgrows what a general accountant wants to handle alongside everything else.
If payroll is the main reason you’re considering an accountant, it’s worth comparing the alternatives directly. Our guides to running payroll yourself, payroll bureau versus software and staying HMRC-compliant on payroll cover that side in more depth than an accountancy guide can.
Business Advisory
Beyond compliance, many accountants advise on the decisions that shape a business’s finances. That includes how to structure director’s pay, whether a purchase counts as a legitimate business expense, when to register for VAT voluntarily, and how to read a set of management accounts month to month. This layer is usually included in a monthly retainer but charged separately, or not offered at all, by budget fixed-fee firms focused purely on annual filing.
It’s also where an accountant can flag a cash flow problem before it becomes a crisis. If the underlying issue is timing rather than profitability, tools like invoice finance address the cash gap directly rather than waiting for an accountant to restructure around it.
Do You Actually Need an Accountant?
Not every business needs one. A sole trader with a single income source, turnover well under the £90,000 VAT threshold, and straightforward expenses can legally complete their own Self Assessment return using HMRC’s free online service. Plenty of people do this every year without issue. An accountant earns their fee once the situation has more than one moving part. That might be a limited company, which has statutory accounts and a Corporation Tax return regardless of size. It might be VAT registration, employees on payroll, or property income. Or it might simply be not having the time to learn the rules well enough to trust your own filing. The honest dividing line is complexity and consequence, not turnover alone – a small business with employees has more compliance surface than a larger one with none. If your affairs are genuinely simple, the cheapest and often best option is to file it yourself and put the fee toward something else.
A reasonable rule of thumb: if you’re a limited company, VAT registered, or run payroll, an accountant is very likely worth the fee. The same is true if you spend more time worrying about a return than it would cost to have someone else do it. If none of those apply, it’s fair to wait.
How Much Does This Cost?
Pricing varies by which of the services above you need and whether you pay monthly or per filing. Online accountants typically charge from around £24.50 a month for a sole trader and more for a limited company, while budget fixed-fee firms charge once a year, banded by turnover, for the accounts and Corporation Tax return alone. Our full breakdown of UK accountant costs compares verified pricing across six firms, including what each package covers and what’s typically charged as an add-on.
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