Do I Need an Accountant from Day One

Introduction

When you’re launching a business, hiring an accountant can feel like an extra expense you don’t need. After all, with online software and endless tutorials, many start-ups try to handle their finances themselves. However, getting professional help early on can save money, prevent mistakes, and make the difference between success and stress.

Whether you need an accountant from day one depends on your business type, confidence with numbers, and how quickly you plan to grow. This article outlines what an accountant can do for you, when you should consider hiring one, and the pros and cons of going it alone.

What an accountant actually does

An accountant does much more than just submit your tax return. They can help you:

Register with HMRC or Companies House correctly

Set up bookkeeping systems that keep you compliant

Manage VAT, PAYE, and corporation tax

Claim allowable expenses and capital allowances

Create financial forecasts and cash flow plans

File annual accounts and tax returns on time

Provide advice on pricing, growth, and funding

They also act as a point of contact if HMRC asks questions or carries out a compliance check, saving you hours of paperwork and potential penalties.

Do you legally need an accountant from day one

There is no legal requirement to hire an accountant when you start a business. You can register your business, file your own returns, and keep your own records. Many sole traders start this way to save costs.

However, as soon as you start trading, you become responsible for meeting all HMRC deadlines and filing accurate financial information. Errors can lead to fines, even if they were genuine mistakes. An accountant helps ensure you meet every requirement correctly and on time.

While it’s not compulsory, many business owners find that having an accountant from the beginning prevents problems later.

When an accountant is worth having from day one

1. You’re setting up a limited company

If you plan to register a limited company, hiring an accountant early is a smart move. Limited companies have more complex tax rules than sole traders. An accountant will handle your incorporation, register you for corporation tax, and set up PAYE if you plan to pay yourself a salary.

They can also help you decide the most tax-efficient way to take income through salary, dividends, or both. Mistakes in this area can be costly, so professional guidance from day one is worthwhile.

2. You expect to grow quickly

If you plan to hire staff, secure investors, or scale your business quickly, you’ll need accurate financial systems from the start. An accountant can set up bookkeeping software, manage payroll, and produce reliable reports for lenders or investors.

Trying to retrofit financial systems later often leads to confusion, missed records, and wasted time.

3. You’re unsure about tax rules

UK tax rules can be confusing for new business owners. An accountant ensures you register for the right taxes, claim the right expenses, and avoid penalties. They can also explain whether you need to register for VAT and how to handle pre-trading expenses.

If numbers or compliance aren’t your strengths, having an accountant helps you focus on what you do best—running your business.

4. You want to claim start-up costs

When you start trading, you can usually claim certain pre-trading expenses such as equipment, website costs, or insurance. An accountant can identify what qualifies and make sure you record everything correctly. This can save you hundreds of pounds in your first tax year.

5. You want peace of mind

Even if your business is small, having an accountant gives reassurance that everything is done properly. You’ll know that your returns are correct, your tax bill is accurate, and your deadlines are under control.

This peace of mind can be worth more than the fee itself, especially if you’re juggling other responsibilities.

When you might manage without an accountant

If your business is simple, has few transactions, and you’re comfortable using online accounting tools, you may be able to manage without an accountant for the first few months.

Many self-employed people use software like QuickBooks, Xero, or FreeAgent to handle invoices, expenses, and Self Assessment. These platforms are designed for beginners and include helpful guides.

However, even if you don’t hire an accountant from day one, it’s wise to book a consultation before your first tax return to check everything is correct.

Costs of hiring an accountant

Accountant fees vary depending on your business type and the level of service. A small sole trader package might start around £25 £50 per month, while limited company packages often range from £60 £150 per month.

This usually includes bookkeeping support, tax returns, and unlimited advice throughout the year. The cost is also a deductible business expense, so it effectively reduces your taxable profit.

Consider it an investment in compliance and time-saving rather than just another bill.

Common mistakes when starting without an accountant

Missing registration deadlines with HMRC or Companies House

Forgetting to record early expenses or claim VAT correctly

Mixing business and personal bank accounts

Underestimating tax owed and being caught out by a large bill

Spending hours on bookkeeping instead of growing the business

These are all preventable mistakes that an accountant can help you avoid.

How to find a good accountant

If you decide to hire one, look for a qualified professional with experience in your industry. Check whether they are members of ACCA, ICAEW, or AAT. Ask for recommendations from other business owners and read online reviews.

Schedule a consultation before you commit. A good accountant will explain fees clearly, communicate in plain language, and show genuine interest in helping your business succeed.

Conclusion

You don’t legally need an accountant from day one, but having one early can make your business life far easier. They save you time, prevent costly mistakes, and help you understand your finances from the start.

If your business is straightforward and you’re confident handling tax and bookkeeping, you can manage alone at first. But as soon as your business grows, involves employees, or requires detailed reporting, professional support quickly pays for itself.

In short, hiring an accountant from day one isn’t always essential—but it’s often one of the smartest first investments you can make.