Can I Do My Own Accounts for a Limited Company

At Towerstone Accountants we provide specialist limited company accountancy services for directors and owner managed businesses across the UK. We created this webpage for people running a company who want clear answers on tax, payroll, Companies House duties, and day to day compliance without jargon. Our aim is to help you understand your responsibilities, reduce the risk of penalties, and know when to get professional support.

This is one of the most common questions I am asked by new directors and small business owners, often right after they register a company. Can I do my own accounts for a limited company, or do I legally need an accountant. The short answer is yes, you are allowed to do your own company accounts. The more important question, and the one that really matters in practice, is whether you should.

In this article I will explain what the law allows, what is actually involved in preparing limited company accounts, the risks and responsibilities you take on as a director, and the situations where doing it yourself can make sense. I will also be very clear about where things often go wrong, and why many directors who start out doing their own accounts eventually decide to get professional help. My aim is not to push one option over the other, but to give you a realistic picture so you can make an informed decision.

What the law says about doing your own company accounts

From a legal perspective, there is nothing that says a limited company must use an accountant.

Under UK law, the responsibility for company accounts sits with the directors, not with an accountant. This means:

• You are legally allowed to prepare your own accounts

• You are responsible for their accuracy

• You are responsible for filing them on time

• You are responsible for paying the correct tax

Even if you hire an accountant, the legal responsibility does not move away from you as a director. This point is often misunderstood.

Your company accounts must be filed with Companies House and your Corporation Tax return must be submitted to HMRC, but neither body requires you to use an accountant to do this.

What counts as “doing your own accounts”

When people say they want to do their own accounts, they often mean different things.

Doing your own accounts can involve:

• Keeping your own bookkeeping records

• Preparing year end statutory accounts

• Submitting Corporation Tax returns

• Filing accounts with Companies House

• Calculating tax liabilities

• Dealing with HMRC queries

Some directors do all of this themselves. Others do the bookkeeping and then use an accountant for year end accounts. The level of complexity you take on matters a lot.

What limited company accounts actually involve

Company accounts are not just a summary of income and expenses.

A full set of limited company accounts typically includes:

• A profit and loss account

• A balance sheet

• Notes to the accounts

• Accounting policies

• Director declarations

These accounts must follow UK accounting standards, usually FRS 105 or FRS 102 for small companies. They also need to reflect company law requirements under the Companies Act.

In addition, the figures in your accounts feed directly into your Corporation Tax calculation. Errors here can lead to underpaid tax, penalties, and unwanted attention from HMRC.

Bookkeeping versus statutory accounts

This is where many directors underestimate the work involved.

Bookkeeping

Bookkeeping is the day to day recording of transactions, such as:

• Sales invoices

• Purchases and expenses

• Bank transactions

• VAT where applicable

Good bookkeeping is essential, but it is not the same as preparing statutory accounts.

Statutory accounts

Statutory accounts involve:

• Accruals and prepayments

• Depreciation and capital allowances

• Director loan accounts

• Dividends and reserves

• Tax provisions

This is where technical knowledge becomes important. Bookkeeping software can help, but it does not replace understanding.

Software and doing your own accounts

Modern accounting software has made it easier than ever to do your own accounts.

Popular systems can:

• Automate bank feeds

• Categorise transactions

• Produce draft accounts

• Generate reports

However, software only does what you tell it to do. It does not:

• Decide whether something is allowable for tax

• Spot missing accruals

• Question unusual transactions

• Apply judgement to complex areas

I often see software being blamed for mistakes that are actually user errors.

What you are responsible for as a director

If you do your own accounts, you take full responsibility for:

• Accuracy of figures

• Compliance with accounting standards

• Correct tax treatment

• Filing deadlines

• Record keeping

Mistakes are not treated lightly just because you are not an accountant. HMRC expects directors to take reasonable care, and ignorance is not a defence.

This is one of the biggest risks of doing your own accounts without proper knowledge.

Common mistakes directors make when doing their own accounts

Over the years, I see the same problems come up repeatedly.

Mixing personal and business finances

This leads to errors in expenses, director loan accounts, and tax calculations.

Missing accruals and prepayments

This distorts profits and can result in incorrect tax bills.

Getting dividends wrong

Dividends must be paid from profits, and paperwork matters. Incorrect dividends can create personal tax problems.

Misunderstanding capital allowances

Claiming or missing capital allowances can significantly affect tax.

Filing late

Deadlines are strict, and penalties apply even if no tax is owed.

These errors are rarely deliberate, but they can be costly.

VAT, payroll, and added complexity

Doing your own accounts becomes more difficult as your company grows.

If your company is:

• VAT registered

• Running payroll

• Paying dividends regularly

• Employing staff

• Claiming expenses and benefits

The compliance burden increases significantly.

Each area brings its own rules, deadlines, and risks. What starts as manageable in year one can become overwhelming by year three.

Can I submit my own Corporation Tax return

Yes, you can submit your own Corporation Tax return.

This involves:

• Preparing a tax computation

• Completing the CT600

• Submitting it online

• Paying Corporation Tax on time

This process relies heavily on the accuracy of your accounts. If the accounts are wrong, the tax return will be wrong.

HMRC can enquire into returns up to several years later, so mistakes may not surface immediately.

What happens if you make a mistake

Making a mistake does not automatically mean penalties, but it depends on the circumstances.

HMRC looks at:

• Whether reasonable care was taken

• Whether errors were careless or deliberate

• Whether mistakes were corrected promptly

Possible consequences include:

• Additional tax

• Interest

• Penalties

• Enquiries and investigations

I often say that doing your own accounts is not risky because mistakes happen, it is risky because you may not realise a mistake has happened.

When doing your own accounts can make sense

There are situations where doing your own accounts can be reasonable.

This may apply if:

• The company is very small

• Transactions are simple

• There is no VAT or payroll

• You have strong financial knowledge

• You are willing to invest time learning

Some directors genuinely enjoy the detail and are capable of managing it well.

When using an accountant is usually the better option

In my experience, most limited companies benefit from professional support.

This is especially true where:

• The company is growing

• There are multiple income streams

• Tax planning becomes important

• Dividends are being paid

• Cash flow matters

An accountant does more than compliance. They often save more in tax and mistakes than their fee costs.

The false economy of “saving” accountant fees

Many directors start by doing their own accounts to save money.

What I often see is:

• Time spent learning and fixing issues

• Stress around deadlines

• Missed reliefs and allowances

• Errors that cost more to fix later

Accountancy fees should be viewed as a cost of running a company, not an optional extra.

Hybrid approaches that work well

It does not have to be all or nothing.

Many directors choose a middle ground, such as:

• Doing their own bookkeeping

• Using an accountant for year end accounts

• Using advice only when needed

This can reduce costs while still protecting you from major mistakes.

What HMRC and Companies House expect

Both HMRC and Companies House expect:

• Accurate records

• On time filings

• Reasonable care

• Proper documentation

They do not lower standards because a director is doing everything themselves.

How I advise directors on this question

When clients ask me if they can do their own accounts, I ask a few key questions.

• How complex is the business

• How confident are you with numbers and rules

• How much time can you realistically commit

• What would a mistake cost you

For some, doing their own accounts is workable. For many, it becomes a distraction from actually running and growing the business.

Final thoughts

So, can you do your own accounts for a limited company. Yes, legally you can. The real issue is whether it is the best use of your time and whether you fully understand the responsibility you are taking on.

Limited company accounts are not just a form filling exercise. They sit at the heart of tax, compliance, and financial decision making. In my experience, directors who understand this early make better choices and avoid painful problems later.

If you are unsure, start by getting advice rather than guessing. Even a one off review can give you clarity and confidence. Doing your own accounts is allowed, but doing them well requires more than just software and good intentions.

You may also find our guidance on do i need an accountant for my limited company and what records does a limited company need to keep helpful when exploring related limited company questions. For a broader overview of running and managing a company, you can visit our limited company hub.