If you’ve recently started a company, or are reviewing its costs, it’s reasonable to ask whether you could manage the accounts yourself. There is no particular turnover or profit figure at which every company suddenly needs an accountant.
The useful question is whether you can prepare the right information, understand the tax treatment and meet the filing requirements without spending more time on the work than you want to.
You can do it yourself, but the responsibility stays with you
As a director, you can maintain the company’s records, prepare its annual accounts and submit its Company Tax Return. You can also appoint an accountant to do some or all of that work. Either way, the directors remain legally responsible for the company’s records, accounts and obligations.
An accountant and an auditor have different roles. Some companies must have their accounts audited, while many small private companies qualify for an exemption if they meet the relevant conditions. An audit exemption does not remove the requirement to prepare accounts, and it should not be assumed simply because a company is small.
A limited company is legally separate from its directors and shareholders, even when one person owns and runs it. Its transactions need to be recorded as company transactions, with money paid to or received from the director properly identified.
That separation is one of the main differences from working as a sole trader. Filing a personal tax return does not, by itself, deal with the company’s accounts or Corporation Tax obligations.
Preparing accounts involves more than adding up bank transactions
Good bookkeeping is the starting point, but a bank balance is not an accounting profit. A customer may still owe money for work completed before the year end. An insurance payment may cover part of the following year. Equipment bought for use over several years may need different treatment from an everyday running cost.
Those matters can affect the accounts even when every bank transaction has been recorded correctly. Statutory accounts must follow the applicable accounting requirements, and the profit used for Corporation Tax can differ from the profit shown in those accounts.
For example, depreciation charged in the accounts is generally added back when calculating taxable profits. Any available tax relief for qualifying equipment is considered separately under the capital allowances rules. Buying accounting software does not remove the need to understand those adjustments.
An accountant can review the records, make the year-end adjustments and prepare the accounts and tax computation. Our Accounts & Corporation Tax service explains the support available if you want that work handled for you.
Accounts preparation and filing software are different jobs
The joint Companies House and HMRC online accounts and Corporation Tax filing service closed on 31 March 2026. From 1 April 2026, companies generally need commercial software to submit their Company Tax Return to HMRC. Paper returns are restricted to permitted exceptions, such as filing in Welsh or having a reasonable excuse.
Companies House filing is separate. Accounts can currently be submitted through suitable software, the available Companies House online services or paper filing, subject to the requirements for the company and accounts concerned. The closure of the joint service did not make every Companies House accounts submission software-only.
Preparing the figures and submitting them are distinct tasks. You need a correct set of accounts and tax computations, then a filing method that meets the recipient’s requirements. HMRC normally requires the accounts and computations in tagged iXBRL format alongside the CT600 return. That is a structured electronic format, rather than simply uploading a spreadsheet or an ordinary PDF.
If you intend to file yourself, check that your chosen product supports all the elements you need. Some bookkeeping packages help maintain records but do not prepare or submit statutory accounts and Corporation Tax returns. You do not have to appoint an accountant solely to access filing software, but the software must be suitable for the job.
Where professional advice can make a difference
For an owner-managed company, decisions about taking money out deserve particular care. A transfer from the company bank account is not automatically salary or a business expense. It might be a dividend, an expense reimbursement, repayment of money you lent the company or a director’s loan.
Dividends need sufficient distributable profits and the appropriate records. Cash sitting in the bank is not proof that a dividend is available: some of that cash may be needed for tax, suppliers or other liabilities. Our guide to paying yourself from a limited company explains the main options.
Regular withdrawals can also leave a director owing money to the company. An overdrawn loan account has its own tax considerations, which can be missed if withdrawals are all recorded under a general expenses heading. The director’s loan accounts guide covers this in more detail.
Business expenditure raises similar questions. A cost being paid from the company account does not establish that it is allowable for Corporation Tax. Mixed business and personal use, or equipment purchases, may need further consideration. Our guide to expenses you can claim through a limited company provides practical examples.
Advice can also be useful before taking on employees, registering for VAT or bringing in another shareholder. Those changes introduce different reporting requirements or affect how profits and payments are handled. Getting help before a decision is made gives you time to understand the consequences.
When handling the work yourself can be reasonable
A company with a small number of straightforward transactions may be manageable if you understand the accounting and tax requirements, keep reliable records and have suitable filing software. The number of transactions alone is not the deciding factor: a quiet company can still have a complicated director’s loan or an unusual transaction.
Dormant companies may have simpler reporting obligations, but dormancy does not mean there is nothing to file. Companies House and HMRC use different tests for dormancy, so check the position with each. Companies House accounts and confirmation statements may still be required.
You also do not have to choose between doing everything yourself and handing over every task. You might keep the day-to-day records and appoint an accountant for the year end, with advice when a particular issue arises. Alternatively, bookkeeping support may be useful if keeping the records up to date is the part that takes too much time.
What should the fee cover?
There is no single standard fee for limited company accountancy. The work depends on the records, the company’s activities and the level of support you want. A straightforward company may not need a comprehensive package, while a low headline price may omit work you expected to be included.
When comparing proposals, clarify:
- Whether both statutory accounts and the Corporation Tax return are included.
- Who will handle bookkeeping, payroll and VAT where needed.
- Whether directors’ personal tax returns and advice during the year are included or charged separately.
- Who will monitor deadlines, and how you will approve accounts and exchange records.
Ask about the accountant’s qualifications, professional supervision and professional indemnity insurance. It also helps to understand who you will speak to when a question arises and whether explanations are clear enough for you to make decisions.
Keeping records is still part of the job
Appointing an accountant does not remove the company’s record-keeping responsibilities. Agree who will maintain the bookkeeping and what information you need to provide. Missing invoices, unexplained transfers or incomplete records cannot reliably be corrected by looking only at the bank statement.
Keeping records current also helps you understand the business between filing dates. Profit, cash available and tax still to be paid are different figures. Knowing how they relate can be useful when deciding whether to buy equipment, employ someone or increase your own withdrawals.
If you have the knowledge, time and systems to manage your company accounts yourself, that can be a reasonable choice. If the work is becoming difficult, or you need advice on a decision, you can seek support for that part of the job without assuming every task must be outsourced.
To discuss the level of help that would suit your company, get in touch with Baldwin’s Accountancy Services.