An accountant is a financial professional who helps individuals and businesses manage their finances, prepare their accounts, and meet their tax obligations. In practice, what an accountant does for a small business goes far beyond filing a tax return once a year.
Many business owners are unclear about exactly what an accountant handles, which often means they either use one for less than they should or avoid using one altogether and end up paying more tax than necessary. This guide explains what accountants do, what qualifications to look for, and what you should expect to receive for your fee.
What an Accountant Does: The Full Picture
| Service | What It Involves | Who Needs It |
| Self Assessment tax return | Preparing and filing your annual personal tax return with HMRC, declaring all income sources and claiming allowable expenses | Self-employed, landlords, directors, anyone with untaxed income |
| Limited company annual accounts | Preparing statutory accounts in the required format for Companies House and the Corporation Tax return for HMRC | All limited companies |
| Corporation Tax return (CT600) | Calculating the company’s taxable profit, applying deductions and reliefs, and filing the return with HMRC | All limited companies |
| Payroll | Running the monthly payroll, submitting Full Payment Submissions to HMRC, producing payslips, P60s, and P45s | Any business with employees or a director on a salary |
| VAT returns | Preparing and filing quarterly VAT returns, advising on scheme selection, and managing Making Tax Digital compliance | VAT-registered businesses |
| Bookkeeping | Recording income and expenses throughout the year so your accounts are accurate and up to date | All businesses that want clean records |
| CIS returns and refunds | Managing contractor obligations or subcontractor Self Assessment returns and refund claims under the Construction Industry Scheme | Construction contractors and subcontractors |
| Company formation | Registering a limited company, setting up the right share structure, and registering with HMRC for Corporation Tax, PAYE, and VAT | Anyone incorporating a new company |
| Tax planning | Advising on legal ways to reduce your tax bill, including salary and dividend structure, pension contributions, timing of income and expenses | Businesses and individuals wanting to minimise tax |
| Virtual office | Providing a registered office address and mail handling service for businesses that want a professional address | Home-based businesses, limited company directors |
What Accountants Do Beyond Filing Returns
The most visible part of an accountant’s work is filing returns and preparing accounts. But for small business owners, the most valuable part is often everything else:
Keeping you out of trouble with HMRC
HMRC sends penalty notices automatically when returns are late, payments are missed, or VAT is filed incorrectly. An accountant tracks every deadline for you and files on time, every time. For most small businesses, the cost of a single penalty notice exceeds the cost of a month of accountancy fees.
Telling you what you actually owe before the deadline
One of the most common complaints from self-employed people who handle their own accounts is that they do not know what their tax bill will be until they file in January. An accountant can give you an accurate estimate of your tax liability months before the deadline, so you can plan your cash flow and avoid being caught short.
Reducing your tax bill legally
An accountant who knows your business well will make sure every allowable expense is claimed, every relief is applied, and your income is structured in the most tax-efficient way. For limited company directors, the difference between an optimised pay structure and a default one can easily be £2,000 to £5,000 per year.
Advising on business decisions
Should you incorporate? When should you register for VAT? Is it worth buying equipment before your year end? An accountant with knowledge of your business can model the tax implications of decisions before you make them, rather than after.
Acting as your agent with HMRC
A registered accountant can act as your authorised agent with HMRC. This means they can speak to HMRC on your behalf, respond to enquiries, and deal with correspondence that might otherwise be stressful and time-consuming to handle yourself.
Accountant Qualifications: What to Look For
In the UK, the term ‘accountant’ is not legally protected. Anyone can call themselves an accountant without any formal qualifications. This means checking qualifications and regulatory status before appointing one is important.
| Qualification / Body | What It Means |
| ICB (Institute of Certified Bookkeepers) | Regulated bookkeepers and accountants. ICB members must meet educational standards and follow a code of conduct. M&B Tax Services is ICB-regulated. |
| ACCA (Association of Chartered Certified Accountants) | One of the largest global accounting bodies. ACCA members have passed rigorous examinations and maintain CPD. |
| ACA / ICAEW (Institute of Chartered Accountants in England and Wales) | The chartered accountancy qualification. Highly regarded, particularly for audit work and larger businesses. |
| AAT (Association of Accounting Technicians) | A widely recognised bookkeeping and accounting qualification, often held by accountants working with small businesses. |
| ATT (Association of Taxation Technicians) | Specialist tax qualification, relevant for accountants focused primarily on tax work. |
For most small businesses, an ICB-regulated accountant or ACCA member is entirely appropriate. The more complex qualifications (ICAEW) add cost and are typically more relevant for larger businesses requiring audit work.
| Always check regulationA regulated accountant must carry professional indemnity insurance, follow a professional code of conduct, and complete continuing professional development each year. This gives you recourse if something goes wrong. An unqualified person calling themselves an accountant has none of these obligations. |
What Does an Accountant Cost?
| Service | Typical Annual Cost |
| Sole trader Self Assessment return (simple) | £250 to £400 |
| Sole trader Self Assessment return (complex, multiple income sources) | £400 to £700 |
| Limited company accounts and Corporation Tax return | £800 to £1,500 |
| Director’s Self Assessment return (in addition to company accounts) | £200 to £350 |
| Monthly payroll (single director) | £20 to £50 per month |
| Monthly payroll (up to 5 employees) | £50 to £150 per month |
| Quarterly VAT return | £50 to £150 per quarter |
| Monthly bookkeeping (small business) | £100 to £300 per month |
These are approximate figures. Costs vary depending on the complexity of the work, the accountant’s experience, and the region. Many accountancy practices offer bundled packages that cover multiple services at a reduced overall cost compared to individual service pricing.
Bookkeeper vs Accountant: What Is the Difference?
Bookkeeping and accountancy are related but distinct. A bookkeeper records day-to-day financial transactions: incoming payments, outgoing expenses, invoices raised and paid. An accountant uses those records to prepare financial statements, file tax returns, and provide business advice.
For many small businesses, a bookkeeper handles the day-to-day records and an accountant reviews those records and files the year-end returns. Some accountancy practices, including M&B Tax Services, provide both bookkeeping and accountancy under one service.
Frequently Asked Questions
Do I legally need an accountant for my small business?
No. There is no legal requirement to use an accountant in the UK. You can prepare your own Self Assessment return, company accounts, and VAT returns. However, company accounts filed at Companies House must meet specific formatting and accounting standards. Most business owners find that a good accountant saves more in tax and penalties than they cost in fees.
What is the difference between an accountant and a tax advisor?
An accountant prepares financial statements, files tax returns, and handles compliance obligations. A tax advisor specialises in tax planning and strategy, often advising on complex transactions, business structures, or high-value tax matters. Many accountants also provide tax advice. For most small businesses, a good accountant covers both roles adequately.
Can an accountant help me if I have missed tax deadlines?
Yes. Accountants regularly help clients who have missed deadlines, filed incorrect returns, or accumulated penalties. They can file outstanding returns, negotiate with HMRC, and in some cases successfully appeal penalties on the grounds of reasonable excuse. It is never too late to get professional help, and acting sooner always limits the damage.
What should I bring to a first meeting with an accountant?
For a first meeting, it is helpful to bring your most recent tax return if you have one, details of your income sources, a summary of your business expenses or bank statements, and any HMRC correspondence you have received. The more context you can provide, the more accurately the accountant can assess your situation and quote for the work.
How do I know if my accountant is doing a good job?
A good accountant files on time, proactively communicates about deadlines and changes in tax law, gives you a clear estimate of your tax bill in advance of payment dates, responds to queries promptly, and explains your position in plain English. If you consistently receive surprise bills, late notice of deadlines, or unexplained jargon, it may be time to look elsewhere.
Work With M&B Tax Services
M&B Tax Services is an ICB-regulated accountancy practice based in Rugby, serving clients across the UK. We provide Self Assessment returns, limited company accounts, payroll, VAT, CIS, bookkeeping, company formation, and virtual office services at fixed fees with no jargon.
We give you a free proposal within 24 hours, require no large deposits, and explain your tax position in plain English throughout the year, not just at filing time.
Book a free 30-minute call and we will walk through what your business needs and give you a clear fixed-fee quote.
Joanna Bruty
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