How to Choose an Accountant for Your Small Business

A good accountant can save you far more than they cost — but only if you choose the right one. This guide walks you through the qualifications to look for, what you can expect to pay, when you actually need one, and the questions worth asking before you sign up.

Do You Actually Need an Accountant?

Not every small business needs a full-service accountant from day one. If you are a sole trader with a simple income and straightforward expenses, you may be able to manage your own Self Assessment tax return, particularly if you use cloud accounting software such as QuickBooks, Xero, or FreeAgent.

That said, there are situations where an accountant quickly earns their fee:

  • You have set up or are considering setting up a limited company — company accounts and Corporation Tax returns are significantly more complex than a sole trader Self Assessment.
  • Your turnover is approaching or has crossed the VAT registration threshold (currently £90,000 in 2024/25).
  • You employ staff and need to run PAYE payroll.
  • Your income comes from multiple sources — property rental, dividends, overseas income, or consultancy alongside employment.
  • You are unsure whether your expenses are allowable and want to claim everything you are legally entitled to.
  • You have received a letter from HMRC and do not know how to respond.

Understanding Accountancy Qualifications

In the UK, the title “accountant” is not legally protected — in theory, anyone can call themselves one. This makes professional qualifications an important filter when comparing candidates.

Qualification Awarding Body What It Means Typical Work
ACA ICAEW Chartered Accountant — the gold standard for business and corporate work Audits, corporate tax, complex advisory
ACCA ACCA Chartered Certified Accountant — globally recognised, strong in practice Small business accounts, tax, audit
CIMA CIMA Chartered Management Accountant — focused on business finance Management accounts, budgeting, strategy
AAT AAT Accounting Technician — strong practical bookkeeping and tax skills Bookkeeping, VAT returns, payroll, Self Assessment
ATT / CTA CIOT Tax Technician / Chartered Tax Adviser — specialist in tax Tax planning, complex personal and business tax

For most small businesses, an ACCA or ACA-qualified accountant in general practice is the most common and reliable choice. An AAT member can be an excellent and more affordable option for sole traders who primarily need bookkeeping, VAT, and a straightforward Self Assessment return.

How Much Does an Accountant Cost?

Fees vary considerably depending on location, the complexity of your affairs, and whether you use a sole practitioner or a firm. The table below gives typical annual fee ranges for small businesses in 2024/25:

Service Typical Annual Cost Notes
Sole trader Self Assessment only £150 – £400 Simple income, basic expenses
Sole trader with bookkeeping review £400 – £900 Accountant reviews your records
Limited company (accounts + CT600) £800 – £2,000 Statutory accounts filed at Companies House
Limited company + director Self Assessment £1,000 – £2,500 The most common package for owner-directors
VAT returns (quarterly) £200 – £600 p.a. Add-on if not included in main package
Payroll (per employee, per month) £5 – £15 per employee RTI submissions, payslips, P60s

Many accountants now offer fixed monthly fees rather than annual invoices, which can help with cash flow. A typical owner-director package might run to £80–£200 per month all-in.

What to Look for When Choosing

Specialism and experience with small businesses

A large firm that primarily handles corporate clients may not give your one-person business much attention. Look for a sole practitioner or small firm that specifically works with small businesses, startups, or your particular industry. An accountant who works regularly with tradespeople, freelancers, or e-commerce sellers will already understand the common expenses and tax issues in your sector.

Software compatibility

Check which accounting software they support. If you are already using Xero or QuickBooks, an accountant who works with the same platform can access your books directly, saving time and reducing errors. Some accountants will recommend (or insist on) a particular package — factor any software subscription cost into your overall budget.

Communication and accessibility

Will you deal with a qualified accountant directly, or will your work be passed to a junior? How quickly do they respond to emails? Some small businesses speak to their accountant only once a year at Self Assessment time; others want regular advice. Be clear about what you expect and make sure they can match it.

Location

Most accountancy work can be handled entirely online, so location matters less than it once did. However, if you prefer face-to-face meetings, proximity still counts. Online-only accountancy services (such as Crunch, Gorilla Accounting, or Mazuma) can be cost-effective for straightforward accounts but may offer less personalised advice.

Questions to Ask Before You Hire

Before committing to any accountant, have an initial conversation — most offer a free consultation. Use it to ask:

  • Are you a member of a recognised professional body, and do you hold a current practising certificate? If they hesitate or cannot confirm, walk away.
  • Do you have experience with businesses similar to mine? Ask for examples of the type of client they typically work with.
  • What is included in your fee, and what would be charged as an extra? A low headline fee that excludes VAT returns, payroll, and director Self Assessment can quickly add up.
  • How will you communicate with me, and what is your typical response time?
  • Which accounting software do you use or recommend, and is the subscription included in your fee?
  • How do you handle HMRC enquiries if I am investigated? Some accountants include fee protection insurance; others charge separately.
  • What do I need to provide, and by when, to ensure my returns are filed on time?

Where to Find a Good Accountant

Word of mouth remains the most reliable route. Ask other business owners in your network who they use. If you are drawing a blank, the following directories list qualified practitioners:

Switching Accountants

If you are not happy with your current accountant, you can switch at any time — there is no lock-in. Your new accountant will write to your old one requesting the “professional clearance letter” and any outstanding papers. Make sure you have copies of all returns, accounts, and correspondence filed in your name before you switch.

The most common reasons businesses switch are lack of proactive advice, slow communication, unexpected fee increases, and errors in returns. If any of these apply to your situation, it is worth shopping around.

Frequently Asked Questions

Look for ACA or FCA (ICAEW — most prestigious), ACCA (widely respected), or AAT (excellent for small business accounts). For tax specialists, look for ATT or CTA (Chartered Tax Adviser). Always verify membership directly on the relevant institute's website — the title "accountant" is not legally protected in the UK.

Sole trader accounts plus self-assessment: £400–£1,200 per year. Limited company full package (accounts, CT600, self-assessment, VAT returns): £1,200–£3,500+ per year. Monthly bookkeeping as an add-on: £100–£400 per month. London and South East rates tend to be higher; online accountants are often competitive regardless of location.

Not legally, but practically yes for most directors. Statutory accounts must comply with accounting standards and be filed in iXBRL format. Corporation Tax returns (CT600) require specialist knowledge. Most directors find the risk and time cost of doing it themselves outweighs the accountant's fee.

A bookkeeper records day-to-day transactions: invoices, bills paid, bank reconciliations. An accountant prepares year-end accounts, tax returns, and gives broader financial advice. Many small businesses benefit from a bookkeeper keeping records current throughout the year, with an accountant reviewing and filing at year-end.

Yes — cloud accounting means your accountant can work with your books remotely in real time. Services like Crunch, Mazuma, and Accounts and Legal offer fixed-fee packages for sole traders and limited companies. You do not need a local accountant in 2026.