Do I Actually Need an Accountant to Start a Business or Can I Do It Myself?

When people come to me at the very start of their business journey this is one of the first questions they ask. Do I actually need an accountant to start a business or can I just do it myself?

I understand why it comes up so often. When you are launching a business you are watching every pound. You might be starting on evenings and weekends. You might not even know yet whether it will take off. Paying for professional advice can feel premature or unnecessary at that stage.

From experience the honest answer is that yes you can start a business without an accountant. Many people do. Some do it successfully. Others run into problems later that cost far more than they saved at the beginning.

What matters is not whether you legally need an accountant on day one but whether you understand what you are taking on and what the risks really are. In this article I want to walk you through what is genuinely possible to do yourself what tends to catch people out and how to decide when getting an accountant involved actually makes sense.

I am writing this from the perspective of someone who has seen hundreds of UK businesses at every stage from first invoice to exit. I will explain what the rules say but also what actually happens in the real world.

What people usually mean when they ask this question

When someone asks whether they need an accountant to start a business they are usually not asking a legal question. They are asking something much more practical.

They want to know whether they can register the business themselves keep costs low handle tax paperwork and avoid making expensive mistakes. They are also often asking whether accountants add value early on or whether they are something you only need once you are making decent money.

In my opinion the confusion comes from the fact that starting a business involves several different decisions and responsibilities that get lumped together under the word accountant.

There is the legal setup such as registering as self employed or forming a limited company. There is ongoing compliance such as tax returns VAT payroll and Companies House filings. There is also strategic advice around pricing cash flow tax efficiency and growth.

Some of these things are perfectly doable yourself. Others are technically doable but risky. A few are areas where experience really matters.

The legal position in the UK

Let me be clear about the rules first.

In the UK you do not legally need an accountant to start a business. There is no law that says you must appoint one. You can register as self employed directly with HMRC. You can incorporate a limited company yourself through Companies House. You can submit your own tax returns and company accounts if you want to.

HMRC and Companies House are set up on the assumption that many people will do this themselves. The guidance is written for the public. The forms are available online. The systems are accessible.

However just because you are allowed to do something does not mean it is straightforward or that the consequences of getting it wrong are minor.

From experience the law sets the minimum requirement not the safest or most efficient approach.

Starting as a sole trader without an accountant

If you are starting as a sole trader this is the simplest route and the one most people consider doing alone.

Registering as self employed with HMRC is relatively easy. You can do it online. You will receive a Unique Taxpayer Reference. You then report your income and expenses through a Self Assessment tax return each year.

At first glance this seems manageable and in many cases it is. If you have straightforward income limited expenses no VAT and no employees then the administrative burden is low.

That said this is also where I see the most common mistakes.

People often misunderstand what counts as allowable expenses. They miss deadlines. They forget to register for Self Assessment on time. They put money aside incorrectly for tax. They assume that if they have not heard from HMRC everything must be fine.

The biggest issue I see is cash flow shock. People make money during the year spend it reinvest it and then face a tax bill they did not expect. Payments on account catch many first time business owners completely off guard.

None of this requires an accountant to fix legally but it does require knowledge discipline and planning.

Starting a limited company on your own

Forming a limited company is also something you can do yourself. Companies House makes it relatively simple and cheap. You choose a name appoint directors issue shares and register online.

What most people do not realise is that company formation is the easy part. Running a limited company correctly is where complexity starts.

As a director you take on legal duties. You must keep proper records. You must file annual accounts and confirmation statements. You must register for Corporation Tax. You must submit a company tax return. You must understand the difference between company money and personal money.

From experience the most damaging mistakes happen very early on. People take money out without understanding how it is taxed. They use the company bank account like a personal one. They do not understand director loan accounts. They do not realise that Companies House and HMRC are separate bodies with different rules.

You can do all of this yourself. Many people do. But the margin for error is much smaller than most expect.

What an accountant actually does at the start

One of the reasons people hesitate is that they assume accountants only deal with tax returns at the end of the year. In reality the early stage advice is often where the real value sits.

When I work with someone at the beginning we usually cover things like whether they should be self employed or limited. How they should pay themselves. What records they need to keep. How much tax to set aside. Whether VAT registration is likely. How to structure pricing so tax does not come as a shock.

This is not about ticking boxes. It is about setting the business up so that it works financially and does not trip you up later.

You can find pieces of this information online. What is difficult is knowing which bits apply to you and how they fit together.

Who can realistically do it themselves

In my opinion there are certain situations where doing it yourself is reasonable.

If you are testing an idea with minimal income. If you are freelancing part time alongside employment. If your expenses are simple and your income is modest. If you are comfortable with numbers and paperwork.

In those cases starting without an accountant can make sense. The key is to stay honest with yourself about when things are getting more complex.

What concerns me is when people push on too long without support even when their business has clearly grown beyond the basics.

The cost question and how people think about it

Cost is always the elephant in the room.

People often see accountant fees as an expense rather than an investment. They ask whether they can justify paying someone before the business is profitable.

What I have seen repeatedly is that early advice usually saves more than it costs. Avoiding one mistake around VAT registrations or director pay can easily outweigh a year of fees.

That said I do not believe everyone needs a full service accountant from day one. There are flexible options. One off consultations setup reviews or limited support packages.

The mistake is thinking the only choice is all or nothing.

Common mistakes I see when people go it alone

From experience these are the issues that come up most often.

People miss registration deadlines and incur penalties. They misunderstand VAT thresholds. They fail to claim expenses they are entitled to. They take money out of a company incorrectly. They mix personal and business finances. They underestimate tax and struggle to pay when bills arrive.

None of these make someone bad at business. They simply reflect a lack of familiarity with the system.

The frustrating part is that most of these problems are avoidable with a small amount of guidance early on.

Using software instead of an accountant

Another reason people believe they do not need an accountant is the rise of accounting software.

Tools like Xero, QuickBooks and FreeAgent are excellent. I use them daily. They make bookkeeping easier and more transparent.

However software does not replace judgement. It does not tell you whether you should be VAT registered. It does not advise you on salary versus dividends. It does not warn you that you are heading for a cash flow crunch.

In my view software works best when paired with advice not as a substitute for it.

DIY with professional checkpoints

One approach I often recommend is a hybrid one.

You can start the business yourself. You can do the basic registration. You can handle day to day bookkeeping. But you bring in an accountant at key points to sense check what you are doing.

This might be when choosing a structure. Before your first tax return. When income increases. When VAT becomes relevant. When you hire someone.

This keeps costs down while reducing risk.

When you almost certainly should not do it alone

There are situations where I would strongly advise against going it alone.

If you are starting a limited company with multiple directors. If you expect to register for VAT early. If you will have employees. If you have property income alongside trading income. If you are leaving employment to go full time.

In these cases the consequences of early mistakes can be significant and difficult to unwind.

The emotional side of starting a business

Something that does not get talked about enough is the mental load.

Starting a business is stressful enough without worrying whether you are doing things correctly. Many people tell me they sleep better once someone else is keeping an eye on compliance.

Peace of mind has value even if it does not show up on a spreadsheet.

Can you change your mind later

Yes and this is important.

Starting without an accountant does not lock you into that decision. You can appoint one at any point. Records can be reviewed. Systems can be improved. Issues can be fixed.

The earlier problems are identified the easier they are to resolve.

What is difficult is fixing several years of incorrect filings or untangling personal and business finances that have been mixed for a long time.

My honest view from experience

In my opinion you do not need an accountant to start a business in the strict legal sense. You can do it yourself and many people do.

The real question is whether you should.

If you are comfortable learning the rules keeping good records and seeking help when things change then doing it yourself initially can work.

If you want clarity confidence and fewer surprises then involving an accountant earlier is usually the better decision.

The best outcomes I see are where business owners stay involved understand their numbers and use accountants as partners rather than outsourcing responsibility completely.

Final thoughts from experience

Starting a business is not just about registering a name or submitting forms. It is about building something sustainable.

From experience the businesses that thrive long term are the ones that make informed decisions early even when money is tight. They understand their obligations plan for tax and ask questions before problems arise.

You absolutely can start a business yourself. Just make sure you are choosing that path deliberately rather than by default.

If you do that you are already thinking like a business owner rather than someone just reacting to paperwork.