Do I need an accountant for my startup? It’s one of those questions that sounds simple but opens about fifteen others the moment you start thinking about it. Here’s what I’d tell you if you asked me over the phone.

What does a new business actually need to do with its accounts?

Most people who start a business have no idea there are different requirements depending on how the business is set up. A sole trader filing a Self Assessment tax return has a very different to-do list than a limited company filing accounts with Companies House. The first thing worth doing is working out which category you fall into, because everything else flows from that.

If you’re a sole trader, you need to register for Self Assessment with HMRC and file a tax return each year covering your income and expenses. That’s the core legal obligation. If you’ve set up a limited company, you have more hoops: annual accounts filed at Companies House, a Corporation Tax return, and a Confirmation Statement every year at minimum.

What’s legally required versus what’s just good practice?

There’s a difference between what HMRC will come after you for and what an accountant might tell you is sensible. Legally, you must register your business, keep records of your income and expenses, and file the returns relevant to your structure. You do not legally have to use accounting software, hire a bookkeeper, or prepare management accounts every quarter.

That said, good record-keeping makes every legal requirement much easier to meet. If your business expenses are still sitting in a personal bank account with no record of what they were for, you’re not in legal trouble yet — but you will make your own life much harder when a deadline arrives. Separating business and personal money from day one is the single most useful thing you can do, and it costs nothing.

Did I already mess something up? (The honest answer)

This is the question most founders are actually asking but won’t say out loud. The honest answer is: probably not as badly as you think, but there may be things to tidy up. Missing a registration deadline, mixing personal and business spending, or not keeping receipts are common — and almost always fixable. HMRC is not sitting waiting to catch you out for an honest mistake in year one.

Where things get more serious is if you’ve been trading for a while, making real money, and haven’t told HMRC you exist. That’s worth sorting out quickly rather than hoping it goes unnoticed. If you’re worried something has been missed, the best move is to sit down with someone who can look at your actual situation, not just guess based on general advice you’ve read online.

When does it actually make sense to bring in an accountant?

You don’t need an accountant from day one in every case. If you’re a sole trader with simple income and no employees, you might manage your Self Assessment yourself for a year or two. But there are a few moments where getting professional help pays for itself quickly: when you’re approaching the VAT registration threshold of £90,000 in turnover, when you take on your first employee, when you form a limited company, or when you simply don’t trust that you’re doing it right.

Tax planning is where an accountant earns their fee most clearly. There are often legitimate ways to reduce what you pay — through the right business structure, claiming allowable expenses properly, or timing decisions sensibly. You can’t go back and claim what you missed in a previous year in most cases, which is why getting proper advice earlier rather than later tends to be the cheaper option.