Can I just use accounting software instead of an accountant?

For a simple sole trader, often yes. Software will raise invoices, pull in your bank feed, categorise transactions and file a Self Assessment. What it will not do is tell you that you have picked the wrong structure, that a purchase would be better made before your year end than after it, or that a letter from HMRC is worth arguing with. Software records what happened; an accountant changes what happens next. The practical dividing line is complexity, not size. One income stream and a handful of expenses is a software job. A company, employees, VAT, property, or anything with a real decision attached is where advice starts paying for itself.

Is a bookkeeper the same thing as an accountant?

No, and confusing the two wastes money in both directions. A bookkeeper keeps the records straight day to day: reconciling the bank, categorising transactions, chasing receipts, keeping the ledger clean and current. An accountant works on top of that, preparing statutory accounts, filing tax returns, and advising on structure, timing and planning. Good bookkeeping is the foundation, and poor records make every hour of accountancy above them more expensive, because someone has to rebuild the ledger before they can do anything useful. Many owners need bookkeeping long before they need advisory work, and paying accountant rates for data entry is a common and avoidable mistake.

If my accountant makes a mistake, who is liable to HMRC?

You are. Filing through an agent does not transfer legal responsibility for the return: the taxpayer remains liable for the tax, the interest and any penalty. What a competent firm gives you is that errors are far less likely in the first place, that a reasonable care position is credible where something is genuinely arguable, and that professional indemnity insurance sits behind their work if they get it wrong. Buzz Accounting carries professional indemnity cover arranged through ICPA. This is exactly why it is worth reading what you sign rather than approving a return you have not looked at. Your approval is the one HMRC relies on.

Do I need an accountant to register as self-employed?

No. Registering for Self Assessment is free, takes about ten minutes on GOV.UK, and you should do it by 5 October following the end of the tax year in which you started trading. Nobody needs to be paid to do that for you. Where people come unstuck is afterwards: not setting money aside for a bill that arrives in one lump the following January, not knowing Class 4 National Insurance runs at 6% on profits between £12,570 and £50,270, and not realising the £1,000 trading allowance exists. If your first year is genuinely small and simple, register yourself, keep clean records, and revisit the question as the numbers grow.

What should I check before appointing an accountant?

Four things, none of which take long. First, anti-money-laundering supervision: every firm providing accountancy services by way of business must be supervised, either by a professional body or directly by HMRC. Buzz Accounting is supervised by HMRC, and Andy Jackson is AAT licensed under number 1001556. Second, registration with HMRC as a tax adviser, which is being phased in for anyone paid to deal with HMRC on a client's behalf. Third, professional indemnity insurance, where you should ask for the level of cover rather than just a yes. Fourth, who actually does the work, who reviews it, and who answers the phone in January.

When is the best time of year to take one on?

Almost any time except December and January, when every firm in the country is at capacity and new work gets the least attention. The genuinely useful moment is a few months before your year end, because that is while planning can still change the outcome: a pension contribution, a piece of equipment, the timing of a dividend. Bring someone in after the year end and you have limited them to reporting what already happened. If you are switching rather than starting from scratch, the same logic applies, and our switching accountants checklist sets out how the handover works and what it costs to leave it too late.

Do I Actually Need an Accountant?

Let's give the honest answer first, because most articles like this dodge it. If you're a sole trader with straightforward income and modest turnover, there is no legal requirement to use an accountant at all. You can register with HMRC, keep decent records, and file your own Self Assessment. Plenty of people do, and do it well. If you run a limited company, the picture changes. You take on real filing duties that are surprisingly easy to get wrong, and that is where an accountant earns their keep.

So the useful question isn't "is it compulsory?" It is "does it pay for itself?" For a lot of people the answer is not yet, and we will happily say so. For others it is a clear yes. Here is how to tell which one you are, with the actual numbers rather than a sales pitch.

When software or a bookkeeper is genuinely enough

You do not need to hand money to an accountant just because you have started a business. In several situations you are fine on your own, or with a lighter touch:

You're a sole trader with simple affairs. One income stream, a handful of expenses, no employees, turnover ticking along rather than exploding. Good bookkeeping software and an honest hour with the HMRC guidance will get your Self Assessment filed.
Your numbers are tidy and you enjoy them. Some people are perfectly comfortable reconciling a bank feed and reading a profit figure. If that is you, cloud software does the heavy lifting.
You mainly need the admin done, not the advice. If the job is really "keep the records straight and the receipts logged", a bookkeeper may be all you need. Bookkeepers record and organise; accountants interpret, plan and file the formal returns. Different jobs, and for early-stage sole traders the bookkeeping half is usually the bigger burden.
Your gross income is under £1,000. The trading allowance lets you earn up to £1,000 a year from self-employment without reporting it at all. Note it does not apply to income from a company you or a connected person controls.

If that is where you are, be honest with yourself and save the money. Paying for an accountant you do not yet need is its own kind of waste. Come back when something on the next list starts to bite.

Limited companies: where it stops being optional in practice

Once you incorporate, you are not just running a business, you are running a separate legal entity with its own obligations. Nobody chases you politely. The duties include:

Annual accounts to Companies House, in the right format, due nine months after your year end.
A Company Tax Return and Corporation Tax. The tax is payable nine months and one day after the period ends; the CT600 itself is due twelve months after it ends — so the money is due before the return is.
A confirmation statement each year keeping your company details current.
Director's Self Assessment, plus payroll and dividend paperwork if you pay yourself that way.

Corporation Tax runs at the 19% small profits rate on profits up to £50,000 and the 25% main rate above £250,000, with marginal relief tapering between the two. None of this is impossible to do yourself. But the penalties for late or wrong filing are automatic and unsympathetic, and the rules around directors' pay, dividends and allowable expenses are genuinely fiddly. It is technically legal to file it all yourself. It is also where we see the most costly errors.

A worked example: what "does it pay for itself?" looks like

Illustrative figures — not a client, just arithmetic you can map onto your own. A one-person limited company with a 31 March 2026 year end and £45,000 of profit before the director is paid. Its statutory calendar is fixed:

31 December 2026 — accounts due at Companies House.
1 January 2027 — Corporation Tax payable.
31 January 2027 — the director's Self Assessment for 2025/26.
31 March 2027 — the Company Tax Return.

Now suppose the owner handles it themselves, gets busy in a good trading month, and everything slips by two months:

Accounts two months late at Companies House: £375. The scale runs £150 up to one month, £375 from one to three, £750 from three to six, £1,500 beyond that — and every figure doubles if you file late two years running.
Company Tax Return late: £200 the day it is missed, and a further £200 if it is still outstanding at three months. Three consecutive late returns and those £200 penalties become £1,000 each.
Self Assessment two months late: £100, charged even where there is no tax to pay. Leave it three months and daily penalties of £10 a day up to £900 begin, with 5% of the tax due or £300, whichever is greater, at six months and again at twelve.
Corporation Tax paid two months late: interest, running daily from 1 January 2027.

That is £675 of penalties on a modest, profitable, entirely honest company — and not one pound of it bought anything. For many small companies that alone covers a meaningful share of an annual compliance fee before a single tax saving is counted.

Then look at the other side of the ledger. Corporation Tax on £45,000 of profit at 19% is £8,550. Structuring the director's own pay properly, claiming capital allowances on equipment actually bought, and putting a pension contribution through the company rather than out of taxed income all move that number. Each is legitimate. Each is dull. And each is the sort of thing that simply does not happen when a business files its own return in a rush in December. Our post on salary versus dividends works through the pay question in detail.

The tipping points where an accountant pays for itself

Forget "should I feel like a proper business owner". Look for these practical triggers. Any one of them can mean an accountant saves you more than they cost:

Tax you're legitimately overpaying. Missed allowances, the wrong structure, expenses you did not know you could claim, a pension or timing decision you never made. Savings that quietly cover a fee, all fully above board.
Penalties and mistakes avoided. Late filing, wrong VAT treatment, a Corporation Tax slip. The penalties stack fast, and the stress of an enquiry is worse than the money.
Time bought back. If you are losing evenings to spreadsheets and receipts, work out what your own hour is worth. For many owners, handing the books over frees time that earns far more than the fee.
Decisions made with real numbers. Should you take on staff? Buy the van? Register for VAT early? Move from sole trader to limited? Guessing at money questions is expensive.
You're growing. New premises, first hire, a big contract, outside investment. Growth multiplies the cost of getting the numbers wrong.

Sole trader vs limited company: the nuance

These are not the same question. As a sole trader, you and the business are one for tax. The admin is lighter and filing is a single Self Assessment, so going it alone is realistic for a good while. For 2026/27 you pay income tax at 20% between £12,571 and £50,270, 40% up to £125,140 and 45% above, with a £12,570 personal allowance that tapers away by £1 for every £2 of income over £100,000. On top sits Class 4 National Insurance at 6% on profits between £12,570 and £50,270 and 2% above, plus Class 2 at £3.65 a week where profits reach £7,105. Our self-employed tax calculator will run your own figures.

As a limited company, the business is legally separate, bringing limited liability and some tax flexibility, but also the full stack of filing duties above. Dividends now carry 10.75% at the basic rate, 35.75% at the higher rate and 39.35% at the additional rate, with a dividend allowance of just £500 — the basic and higher rates both rose by two percentage points from April 2026, which changes the salary-versus-dividend arithmetic that many one-person companies set up years ago and never revisited. If you are weighing the two structures up, our guide on sole trader vs limited company walks through the trade-offs in plain terms.

What changes in 2026, and why the answer is moving

Making Tax Digital for Income Tax is being phased in, and it shifts the DIY calculation for a lot of sole traders and landlords:

From 6 April 2026 if your qualifying income for 2024/25 was over £50,000.
From 6 April 2027 if it was over £30,000 in 2025/26.
From 6 April 2028 if it was over £20,000 in 2026/27.

Inside MTD you keep digital records and send quarterly updates from compatible software, rather than one annual return typed in at the end of January. If your whole system has been a shoebox and a good memory, that is not a small change — and it is the reason a number of people who genuinely did not need an accountant last year will need help this year. Our Making Tax Digital guide covers what it means in practice, and the MTD checker will tell you which phase catches you.

What a good accountant actually does beyond filing

If you picture an accountant as someone who types numbers into a form once a year, you are picturing the cheap version. Filing is the floor, not the ceiling. A good one:

Tells you honestly whether your structure still suits you.
Plans tax across the year so nothing is a nasty surprise in January.
Reads your numbers back to you in English, so you know what is actually making money.
Flags problems early, while they are still cheap to fix.
Is on the end of the phone when a decision or an HMRC letter lands.

That advisory side is the bit that pays for itself twice over, and it is why "just use software" stops being enough as a business gets more complex.

Decide it in ten minutes: the three-number test

Something you can do this week. Write down three numbers.

The fee. Ask two firms to quote for what you actually need. You now have a real figure instead of a fear.
What going wrong costs. Add up the penalties if your worst filing slipped two months: for a company, £375 at Companies House plus £200 on the CT600 plus £100 on Self Assessment — £675. For a sole trader, £100 plus daily charges from three months. Multiply by how likely you honestly think that is.
What your own hours are worth. Count the hours you spent on books and returns last year. Multiply by what an hour of your selling or delivery time earns.

If numbers 2 and 3 together comfortably exceed number 1, the decision is made. If they do not, you have your answer too — and you have saved yourself a fee. Either outcome is a good use of ten minutes.

How to know it's time

A rough rule of thumb. You probably don't need one yet if you are a sole trader, your affairs are simple, your turnover is modest, and you are comfortable with the admin. There is no shame in that, and we will tell you so.

You probably do if you can tick any of these: you have formed a limited company; you are registering for or already handling VAT; you have taken on staff; Making Tax Digital catches you in April 2026 or 2027; your tax bill has jumped and you are not sure why; you are spending real time on the books instead of the business; or you are about to make a decision with a big number attached.

The honest test is simple: would an accountant save you more in tax, penalties and time than they cost, and give you numbers you can actually run the business on? When the answer becomes yes, it usually stays yes. If you would like a straight, no-pressure view on which side of the line you are on, take a look at our services or just get in touch and ask. If you already have an accountant and the issue is the one you have rather than whether to have one, our switching accountants checklist is the more useful read.