Most UK businesses are not legally required to hire an accountant, but many choose one once VAT, payroll, or a limited company is involved because the time savings and error‑prevention typically outweigh the fees.
Who this guide helps
- Sole traders, limited companies, side hustles and growing SMEs weighing up DIY vs getting professional help.
- Anyone unsure about VAT, company filings, or the 2025 size and audit threshold changes.
Is it a legal requirement?
No, there is no blanket legal requirement to use an accountant for a sole trader or limited company; the legal duties are to keep records and file correctly and on time.
Where an audit is required, an independent auditor must be engaged, though more companies are now exempt due to higher thresholds for periods starting on or after 6 April 2025.
Even if no audit is needed, limited companies still have to file statutory accounts to Companies House and a Corporation Tax return (CT600) to HMRC, which is where many owners bring in an accountant.
When DIY makes sense
DIY is feasible for straightforward setups: a sole trader with simple income and expenses, no VAT, and no employees.
Use bookkeeping software and remember the basics: keep records for at least five years and file by the deadlines; since 2024/25, cash basis is the default for the self‑employed unless opting out.
If sticking with DIY, consider a one‑off year‑end review to catch missed reliefs and sanity‑check your return.
When to get professional help
- Nearing or passing the VAT threshold of £90,000 in a rolling 12 months, or expecting to cross it in the next 30 days.
- Hiring staff and running payroll or benefits for the first time.
- Incorporating or changing structure, especially when planning a salary/dividend mix as a director.
- Multiple revenue streams, stock, or international sales that complicate VAT, margins, and reporting.
- R&D claims, raising finance, lender reporting, or grant audits where accuracy and presentation matter.
- Late filings, penalties, or receiving HMRC letters and enquiries.
Sole trader vs limited company
Sole traders are not legally required to appoint an accountant, but value often appears once VAT, PAYE, or complex expenses and allowances enter the picture.
Limited companies also have no legal obligation to hire an accountant, yet the compliance load is heavier: annual accounts to Companies House and CT600 to HMRC, plus director decision‑making on pay and dividends.
Many limited companies choose an accountant because preventing one penalty or inefficient tax choice can more than cover annual fees
2025 size and audit thresholds at a glance
For accounting periods starting on or after 6 April 2025, company size thresholds increase, reducing audit requirements for many.
New small company limits: turnover up to £15m, balance sheet up to £7.5m, employees up to 50; medium moves to turnover up to £54m and balance sheet up to £27m.
Result: more companies remain audit‑exempt, but lenders, shareholders (10%+), or sector rules can still require an audit.
What an accountant actually does (in plain English)
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Keeps records and filings tidy so deadlines aren’t missed and penalties don’t hit cash flow.
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Advises when to register for VAT, which scheme fits, and handles quarterly returns.
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Prepares Companies House accounts and the CT600 accurately and on time.
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Spots tax‑saving opportunities and prevents over/under‑claiming on expenses and capital items.
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Explains how the 2025 thresholds affect audit exemption and reporting, including edge cases.
Two quick examples
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Freelance designer, no staff, not VAT‑registered: keeps monthly records, files via software, and books a one‑off year‑end review to check reliefs and avoid errors.
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Small limited company with VAT and payroll: accountant sets up PAYE, files VAT returns, prepares year‑end accounts and CT600, and flags upcoming tax so there are no surprises.
Frequently Asked Questions
Is an accountant legally required in the UK?
No, most businesses can file themselves; an audit is only required when thresholds or specific circumstances apply.
Do limited companies need an accountant?
Not legally, but most appoint one due to the added complexity of statutory accounts, CT600, and director tax planning.
What is the VAT registration threshold in 2025?
£90,000 of taxable turnover in any rolling 12‑month period; notify HMRC within 30 days if you exceed or expect to exceed it.
What changed for audits from April 2025?
Size thresholds rose for periods starting on or after 6 April 2025, meaning fewer companies need a statutory audit.
Can an accountant just review my year‑end?
Yes, many owners DIY bookkeeping and use an accountant for a year‑end check to reduce risk.
Practical checklist
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Map deadlines: Self Assessment 31 Jan; company accounts to Companies House; CT600 to HMRC—plan cash for payments ahead.
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Track VAT on a rolling basis; set alerts at £75k, £85k, and £90k turnover to avoid late registration.
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Decide accounting method if self‑employed; remember cash basis is now default from 2024/25 unless opting out.
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Reassess in 2025 if growth nudges audit or size thresholds—don’t assume last year’s status still applies.
Ryans’ no‑nonsense help
Not sure if it’s time to get help? Share the setup in two lines, and Ryans will recommend DIY, a one‑off review, or ongoing support that fits the workload and risk.
Advice is tailored to current VAT rules and the 2025 company size and audit thresholds, so decisions are made with this year’s facts, not last year’s assumptions.