Do you need an accountant if you’re self-employed (sole trader)?

Going self-employed can be a surprisingly straightforward way to start your own business, but there’s always one thing that worries new business owners – tax!

You’re not legally required to use an accountant as a sole trader, and plenty of people take care of their tax affairs on their own, especially for micro businesses.

But that doesn’t mean it’s always the best idea.

Depending on how your business is set up, what you earn, and how confident you are with the numbers, an accountant can provide an important safety net – or even save you money overall.

Here’s a look at what they do, how much they cost, and how to decide whether you need one.

What you’re responsible for as a sole trader

When you’re self-employed, you’re responsible for registering for self assessment with HMRC and handling all your own tax affairs.

That includes:

• Registering for Self Assessment
• Tracking income and business expenses
• Filing your tax return by 31st January
• Paying Income Tax and National Insurance
• Keeping records for at least five years

As your business grows, you might also need to register for VAT, operate PAYE if you take on staff, or comply with Making Tax Digital rules.

None of this requires you to hire an accountant. But doing it all properly, on time, and in a way that doesn’t cost you more tax than necessary – that’s where a good accountant can really come into their own.

What an accountant actually does

There’s a common misconception that accountants only prepare tax returns. That’s part of their role, but there’s much more to it than simply filling out forms.

A decent accountant will:

• Check you’re registered for the right taxes (and not paying for ones you don’t need).
• Help you decide when – or whether – to register for VAT, and which scheme to use.
• Make sure you’re claiming all allowable expenses, including less obvious ones like home office use or equipment purchases.
• Help you avoid common errors, like double-counting income or underreporting.
• Warn you about upcoming tax bills, so you’re not caught out.
• Handle communications with HMRC if something goes wrong.

Some also offer business advice, particularly for those just starting or considering setting up a limited company. And if you ever get an HMRC enquiry or audit, having a professional on your side makes a huge difference.

In fact, UK SMEs that use accountants report higher revenue and lower stress levels – not just because of better tax efficiency, but because it frees them up to focus on their actual work.

Can you do it yourself?

In many cases, yes – at least for a while.

If your business setup is straightforward (say, you’re a freelance graphic designer with no employees and minimal expenses), it’s perfectly possible to manage your taxes yourself using HMRC’s online services or accounting software.

You might find tools such as Xero or QuickBooks helpful for automating your invoicing, recording expenses, and estimating your tax bill as you go.

You can also use simplified expenses for certain costs like mileage or working from home, which keeps things easier, but only up to a point.

The main risk is assuming HMRC’s system will catch any mistakes or flag any errors you’ve made. It won’t.

If you miss something important, like VAT registration once your turnover hits the £90,000 threshold, you could face fines and interest. The same applies if you forget to put money aside for your tax bill or claim expenses you weren’t entitled to.

What does an accountant cost?

It varies – not just by region, but by the kind of service you want.

• One-off Self Assessment tax return: from £150–£300
• Ongoing support: from £25/month for basic online services, up to £100+/month for more hands-on support

If you’re unsure what level of help you need, read our guide to comparing sole trader accountants, which describes typical options, including remote vs. local and the pros and cons of a monthly fee arrangement.

Can accountants save you money?

In many cases, absolutely. Accountants are aware of instances where businesses overpay tax or underclaim expenses. For example:

• Not claiming all the expenses you’re entitled to
• Staying VAT-registered when it’s no longer required
• Using the wrong VAT scheme for your industry
• Missing out on tax-deductible pension contributions
• Being caught out by payments on account or unexpected National Insurance bills

They can also help you plan – for example, working out how much tax to set aside as your income rises or advising on when it might be time to switch to a limited company.

Do you need an accountant?

If your business is small and your finances are simple, it’s fine to go it alone – at least to start with.

Just be prepared to keep good records, check deadlines, and understand what counts as taxable income or an allowable cost.

But if:

• You’re not sure what you’re doing
• You’ve got more than one income stream
• You’re approaching the VAT threshold
• You’re spending hours trying to make sense of tax rules

…then working with an accountant could save you more than it costs.

Even a one-off consultation can give you peace of mind that you’re making the right decision.