Accountant

What an accountant can do for a business

The work varies from firm to firm. Services you may be offered include:

• Year-end accounts, and filing them at Companies House for a limited company.
• Company Tax Returns or Self Assessment tax returns.
• VAT returns and payroll.
• Bookkeeping, either themselves or through a bookkeeper they work with.
• Monthly or quarterly management accounts and cash flow forecasts.
• Advice on tax, how to pay yourself and how to structure the business.

Accountants don't only look back at last year. Some provide monthly figures, forecasts and regular advice. Others focus on accounts and tax and leave the rest to you. Ask what is included in the fee, and what costs extra.

Who it may suit

• Private limited companies, which must prepare annual accounts and a Company Tax Return after the end of each financial year, and file them with Companies House and HMRC.¹
• Sole traders and partners who'd rather not do their own Self Assessment.
• Businesses registered for VAT or taking on staff.
• Owners who want advice on tax or on how the business is doing.

Not sure you need one at all? See Do I need an accountant?

Accountant, chartered accountant, chartered certified accountant

ICAEW says: "By law anyone can call themselves an accountant."² Some titles are tied to membership of a particular body:

Accountancy titles and who can use them

Title	Who can use it
Accountant	Anyone. The word is not protected.2
Chartered accountant	A protected title. The government's register of regulated professions lists ICAEW (Chartered Accountant, ACA, FCA), ICAS (Chartered Accountant, CA) and Chartered Accountants Ireland as the bodies. It notes the restrictions apply to use of the title only, not to the work.3
Chartered certified accountant	ACCA's rules say a member of ACCA "is entitled to use the professional designation 'Chartered Certified Accountant' or 'Certified Accountant'".4

ICAEW says the ACA or FCA letters show the person has done at least three years of training, passed its exams and committed to keeping their knowledge up to date. It also says its chartered accountants must hold a practising certificate and professional indemnity insurance if they offer professional services to the public.² Other bodies have members in practice too: AAT, for example, says its licensed members offer accounting and bookkeeping services.⁵ A title tells you about training and membership. It doesn't tell you whether an accountant suits your business.

Money laundering supervision

Accountants who provide accountancy services to clients count as accountancy service providers under the money laundering regulations. They may have to register with HMRC for supervision, unless a professional body already supervises them. HMRC lists the bodies that supervise, including ICAEW, ACCA, AAT, ICAS, the Chartered Institute of Taxation and the Institute of Financial Accountants.⁶ You can ask an accountant who supervises them.

How it differs from neighbouring roles

The roles overlap, so treat this as a rough guide. A bookkeeper keeps the day-to-day records. A tax adviser focuses on tax planning and harder tax questions. A management accountant produces monthly figures for running the business. A part-time finance director helps with budgets, funding and finance decisions. Some accountancy firms offer several of these.

What it costs

We have not found a reliable published survey of what UK small businesses pay their accountant, so we do not give a figure. Fees depend on the work, the size of the business and the state of the records. See How accountancy fees work.

Questions to ask before you choose one

1. Which professional body do you belong to, and who supervises you for money laundering purposes?
2. Do you hold professional indemnity insurance?
3. What exactly is included in the fee, and what costs extra?
4. Who will do the work, and who do I contact with questions?
5. Have you worked with businesses like mine?
6. Do you offer monthly figures or forecasts if I need them later?
7. Will you set out the work and fees in a letter of engagement?

When a smaller step may be enough

A sole trader with simple income may be able to do their own Self Assessment, perhaps with a bookkeeper or software to keep records tidy. If you already have an accountant, it may be enough to ask them for more, such as quarterly figures, before you look elsewhere.