Do I Need an Accountant for a Limited Company? - ESDG Accountancy

Do I Need an Accountant for a Limited Company?

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Ed, Chartered Accountant

If you are a UK Limited Company business owner , you might wonder whether (and when!) you need an accountant. The answer is not always straightforward, but in most cases, having a professional accountant at the right time can provide significant advantage in terms of both tax saving and in reducing your admin burden.

This article will seek to provide an honest answer for business owners, and explore the various benefits of hiring an accountant for your limited company, from tax planning to compliance with HMRC regulations.

If you are looking for help with your Limited Company accounts, want to check if you are being tax efficient, or would like a quote, please get in touch with us here an a Chartered Accountant will respond to you within 24 hours.

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Tax Planning Benefits

One of the core reasons to hire an accountant is for tax planning. Effective tax planning can save your business a considerable amount of money. Accountants are well-versed in the complexities of the UK tax system and can help you identify all possible deductions and reliefs, ensuring that you pay no more tax than necessary.

Maximising Deductions

An accountant can help you claim all allowable expenses, such as office costs, travel expenses, and salaries. They can also advise on the best ways to manage and record these expenses to ensure that you remain compliant with HMRC regulations.

Timing of Income and Expenditure

Strategic timing of income, expenditure and dividends can also reduce your tax liability. For instance, an accountant might advise deferring income to the next tax year or bringing forward expenditure to the current tax year to take advantage of tax breaks. Furthermore delaying a dividend could bring you a 12 month cash-flow advantage by kicking it back to the next tax year.

Utilising Tax Reliefs

Various tax reliefs are available to limited companies, such as Research and Development (R&D) tax credits, Annual Investment Allowance (AIA), and the Employment Allowance. An accountant can help you understand and apply for these reliefs, further reducing your tax burden.

Obtaining Mortgage or Lending

Another significant benefit of having an accountant is the assistance they provide in obtaining mortgages or business loans. Lenders often require detailed financial records or require the accounts to be signed off by a Chartered Accountant – this is most commonly seen with property and buy-to-let businesses.

Professional Financial Statements

Accountants can prepare accurate and professionally presented financial statements, which are crucial for securing loans or mortgages. These documents demonstrate your company’s profitability and stability to potential lenders.

Cash Flow Management

Good cash flow management is essential for any business seeking finance. An accountant can help you maintain healthy cash flow by providing forecasts and managing your receivables and payables. This proactive approach ensures that you are in a strong position to meet lenders’ requirements.

Credibility and Trust

Having an accountant also adds credibility to your financial statements. Lenders are more likely to trust figures prepared by a chartered accountant, as it gives them confidence that your accounts are accurate and reliable.

Compliance with HMRC

Ensuring compliance with HMRC is crucial for any limited company. Failing to meet your tax obligations can result in penalties and interest charges, not to mention the stress and potential reputational damage.

Accurate Record-Keeping

Accountants help maintain accurate and up-to-date records, which is a legal requirement for limited companies. This includes keeping track of income, expenses, VAT, payroll, and other financial transactions.

Meeting Deadlines

An accountant ensures that all your tax filings and payments are made on time, avoiding any late filing penalties. They will manage deadlines for VAT returns, Corporation Tax, and PAYE, giving you peace of mind that your business is fully compliant.

Handling HMRC Enquiries

If HMRC raises any enquiries or audits your company, having an accountant can be invaluable. They can handle all communications and provide the necessary documentation to satisfy HMRC’s requirements.

Software Expertise

Accountants work with a large range of clients and therefore should be up to date with the best cloud accounting option for your business.

Xero, Quickbooks, Dext, and More

Working with an accountant will allow them to advise on the best accounting software for your business size and sector. We work with a number of software packages to ensure accuracy and automation for our clients.


Do I need an accountant if my company is very small? and when?

Even small companies can benefit from hiring an accountant. If you are not VAT registered, you may not need to formally engage an accountant until after your first year end – however it never hurts to have an informal conversation with an accountant in preparation. In the event you are VAT registered you will likely want to engage an accountant prior to the end of your first VAT return period.

Can I do my company’s accounts myself?

While it is possible to complete your own personal tax return, preparing Limited Company accounts is generally accepted as a lot more complex. We often meet clients who have made mistake on their first set of accounts and have encountered penalties or enquiries from HMRC. Very few business owners complete their own accounts. In addition to the technical barrier, you also require specialist software to prepare and file the accompanying Corporation Tax return.

How much does an accountant cost?

The cost of hiring an accountant varies depending on the complexity of your business and the services required. However, the savings in tax and the value of professional advice often outweigh the costs. Get in touch for a custom quotation within 24 hours.

What should I look for in an accountant?

Accountancy is not a protected profession in the UK, unlike being a solicitor or a medical doctor. Anyone can trade as an accountant or provide tax advice. It’s therefore important you ensure you work with a Chartered Accountant, and a member of a recognised professional body, usually being the ICAEW or ACCA.

Can an accountant help with business planning?

Yes, accountants can provide valuable insights and advice on business planning, budgeting, and financial strategy, helping you to grow your business effectively.

In conclusion, while hiring an accountant is an additional expense, the benefits they bring in terms of tax savings, compliance, and financial management can far outweigh the costs. By ensuring that your limited company is operating efficiently and in compliance with all regulations, an accountant can provide peace of mind and allow you to focus on running and growing your business.

For more information on how we can help your business, check out our services and articles on our website.

By following these guidelines, you can ensure that your limited company remains financially healthy and compliant with all legal requirements. Hiring an accountant is not just about compliance; it’s about making informed decisions that can lead to long-term success and growth for your business.

Get a quotation for your accounts:

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Office Phone: 020 4522 9740


Address: 44 Royal Parade Mews, Blackheath, London SE3 0TN


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About the author

Ed is qualified Chartered Accountant and founded ESDG Accountancy in 2020. He has gained extensive experience in various sectors, working with business owners, international groups, & private equity investors.