Do I need an accountant for my limited company?

Finding ways to keep costs under control when you’re starting out in business can be challenging.

Accessing professional services, such as marketing, or business advice, may seem like an indulgence, but will often provide a return on your investment at a later date.

If finances are tight, you may choose to hold off until your company is generating more income.

When it comes to some expertise, such as legal and financial, there are risks involved in deciding to go it alone.

If you’re asking ‘do I need an accountant as a limited company?’, there are a number of reasons why the answer will usually be: ‘Yes’.

Running a limited company in the UK requires you to meet several legal, tax, and financial obligations.

When considering do I need an accountant for limited company accounts, it’s important to evaluate what’s involved in compiling them, and the consequences of getting it wrong.

Does a limited company have to have an accountant, what are the risks of running a limited company without accountant assistance, and what can an accountant bring to your company?

Do limited companies need an accountant by law?

Company law is governed by the Companies Act 2006, which does not mandate that limited companies must hire an accountant.

This means that anyone is free to manage their company’s finances and to file the necessary documentation.

So, legally at least, the answer to the question ‘do I need an accountant for a limited company?’ is: ‘NO’. However, in practice, most limited companies choose to use the services of an accountant due to the complexity of company accounts, the time they take, and the costs associated with making mistakes.

Limited companies are required to file annual accounts with Companies House, submit a Corporation Tax return to HM Revenue & Customs (HMRC), and also ensure that they’re are compliant with VAT requirements if they’re registered, as well as PAYE.

There are also other tax obligations that may be relevant to your company that you will need to keep abreast of.

For most company directors, the time and in-depth expertise required to manage these complex responsibilities means hiring a professional accountant is a smart investment.

Their knowledge and attention to detail minimise the risk of mistakes and penalties as a result.

Accountants not only ensure that you are fully compliant, they can also ensure that companies make full use of any tax reliefs and allowance to which they are available.

When considering do I need an accountant as a limited company director, it’s important to remember the possible financial benefits they can bring.

Not only do they ensure you don’t inadvertently end up facing penalties, but they can save you money through allowances and other reliefs which you may otherwise miss.

Can I do limited company accounts myself?

While it’s not uncommon for sole traders and partnerships to take care of their own accounts and self-assessment returns, most limited companies appoint an accountant.

Directors who choose to do their own limited companies generally operate small, limited companies with straightforward financial and accounting requirements.

Alternatively, they may themselves have financial training which means they’re confident in what’s required of them and unlikely to make mistakes.

When you opt to take care of your accounts yourself, you take on full responsibility for their accuracy. The learning curve can be steep, and any errors can be costly.

For most limited companies, the complexity of company accounts and tax filings makes hiring an accountant a practical necessity.

Do I still need an accountant if I have QuickBooks?

While QuickBooks, and other accounting software like Xero, Sage, and Free Agent, are excellent tools, they do not entirely replace the need for an accountant.

While they can help reduce the time and effort required to manage company finances, accountants provide expertise that goes beyond basic bookkeeping.

A professional accountant will ensure compliance with the latest tax laws and advise on the most tax-efficient ways to manage your business finances and income.

Is QuickBooks better than an accountant?

QuickBooks is a tool that can automate aspects of the bookkeeping and accounting process.

It allows you to take care of much of the day-to-day financial record-keeping yourself and gives you immediate access to basic financial data that can help you make more informed decisions.

However, when it comes to compliance, tax advice, and strategic financial planning, then the expertise of an accountant is invaluable.

Accountants can help you avoid costly mistakes, and you can be confident that your financial affairs are in expert hands.

Software packages cannot do that.

Expert limited company accounting services from DAAFL

At DAAFL, our team of financial experts provides a range of accounting services for limited companies, ensuring they meet their statutory obligations, reduce their liabilities, and optimise their financial record keeping.

We producelimited company annual accounts for ourclients, as well as providing expert advice and guidance to support your business objectives.

Our bespoke services meet your unique needs while giving you more time for other business activities. We take the guesswork and stress out of managing your limited company finances.

Want to learn more about limited company accounting and the value it can bring to your business?