What Does a Limited Company Accountant Actually Do?

At Towerstone Accountants we provide specialist limited company accountancy services for directors and owner managed businesses across the UK. We wrote this guide for people running a company who want clear answers on tax, payroll, Companies House filing 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 hear from directors, often asked quietly and sometimes with a hint of uncertainty. Many people know they need an accountant once they run a limited company, but they are not always clear on what that accountant actually does day to day or what value they should expect in return for the fee they are paying.

In my experience, this lack of clarity can lead to frustration on both sides. Directors may feel they are only hearing from their accountant once a year, while accountants assume their role is understood when in reality it is not. The truth is that a good limited company accountant does far more than submit accounts and tax returns.

In this article, I want to explain clearly and honestly what a limited company accountant actually does in the UK. I will cover the core compliance work, the advisory role, the ongoing support behind the scenes, and the areas where an accountant can genuinely change the financial outcome of a business. I will also explain what falls outside the role, because understanding that is just as important.

Everything here is based on my real world experience advising UK limited companies of all sizes.

The core role of a limited company accountant

At its most basic level, a limited company accountant ensures that the company meets its legal and tax obligations. This is the foundation of the role and it is non negotiable.

Every limited company in the UK has statutory responsibilities, and failing to meet them can result in penalties, interest, and in serious cases, strike off or director action.

A limited company accountant ensures that:

• Accounts are prepared correctly

• Tax returns are submitted on time

• Figures are calculated accurately

• Filings comply with UK law

This work may not always feel exciting, but it is essential.

Preparing statutory accounts

One of the main tasks of a limited company accountant is preparing statutory accounts.

These accounts are prepared under UK accounting standards and are submitted to Companies House. They show the financial position of the company and include:

• A balance sheet

• Notes to the accounts

• Confirmation of compliance with accounting standards

For many directors, statutory accounts are not something they ever read in detail, but they are a legal requirement and errors can cause serious problems.

An accountant ensures the accounts are:

• Accurate

• Properly formatted

• Submitted by the deadline

• Consistent with tax filings

Preparing Corporation Tax returns

Alongside statutory accounts, a limited company accountant prepares the Corporation Tax return.

This involves calculating the company’s taxable profit and submitting the return to HMRC.

This is not just a case of taking the profit figure and applying a tax rate. Adjustments are often required, including:

• Removing disallowable expenses

• Claiming capital allowances

• Applying reliefs correctly

• Handling losses

A good accountant ensures the tax position is correct and defensible, not just optimistic.

Advising on allowable and disallowable expenses

One of the most valuable ongoing roles of a limited company accountant is advising on expenses.

Directors often ask questions such as:

• Can the company pay for this

• Is this tax deductible

• Will this cause problems later

An accountant helps draw the line between business and personal spending and explains the consequences of getting it wrong.

This advice protects directors from:

• Unexpected tax bills

• HMRC enquiries

• Director’s loan account issues

Managing director remuneration

Another key area is advising directors on how to pay themselves.

This usually involves a combination of:

• Salary

• Dividends

• Pension contributions

A limited company accountant helps structure this in a way that is tax efficient while remaining compliant.

This includes:

• Setting up payroll correctly

• Advising on salary levels

• Declaring and documenting dividends

• Explaining personal tax implications

This is an area where good advice can save significant amounts of tax over time.

Handling payroll and PAYE

Many limited companies employ staff or pay directors through payroll.

An accountant often manages or oversees:

• PAYE calculations

• National Insurance

• Pension auto enrolment

• Payroll submissions

Errors in payroll can quickly lead to penalties and unhappy staff. Having this handled correctly removes a major source of risk for directors.

VAT registration and ongoing VAT support

If a company is VAT registered, the accountant’s role expands further.

This includes:

• Advising whether VAT registration is required

• Choosing the most suitable VAT scheme

• Preparing and submitting VAT returns

• Dealing with HMRC queries

VAT is one of the most common areas where businesses get into trouble. A limited company accountant helps keep this under control and planned for.

Bookkeeping review and oversight

Some companies outsource bookkeeping, others do it in house. Either way, a limited company accountant usually reviews the bookkeeping before preparing accounts and tax returns.

This review process involves:

• Checking expense categorisation

• Identifying missing or duplicated entries

• Ensuring VAT is treated correctly

• Reviewing bank reconciliations

This is where many errors are spotted and corrected before they cause problems.

Advising on cash flow and forecasting

Beyond compliance, a good accountant supports the financial health of the business.

Cash flow is one of the biggest concerns for directors and an accountant can help by:

• Reviewing cash flow patterns

• Building cash flow forecasts

• Highlighting future pinch points

• Planning for tax payments

This moves the accountant’s role from historical reporting to forward looking support.

Supporting business decisions

Limited company accountants are often involved in major decisions, even if that involvement is informal.

This might include advice on:

• Taking on finance

• Hiring staff

• Purchasing equipment

• Expanding premises

• Changing pricing

An accountant helps translate decisions into financial impact so directors can move forward with confidence.

Dealing with HMRC on your behalf

One of the less visible but highly valuable roles of a limited company accountant is acting as the point of contact with HMRC.

This includes:

• Responding to HMRC letters

• Handling queries and checks

• Managing payment plans

• Supporting HMRC enquiries

For many directors, this alone is worth the fee. It removes stress and ensures communication is handled professionally.

Maintaining director loan accounts

Director’s loan accounts track money moving between the company and the director outside of salary and dividends.

An accountant monitors this closely to:

• Prevent overdrawn balances

• Avoid unexpected tax charges

• Ensure transactions are recorded correctly

This is an area where mistakes can become expensive if not managed properly.

Year end planning and tax efficiency

A limited company accountant does not just report on what has already happened. They also help plan before the year end.

This may include:

• Timing of income and expenses

• Pension contributions

• Capital purchases

• Dividend planning

Year end planning can make a meaningful difference to the tax bill when done properly and early enough.

Advising on growth and structure

As companies grow, their needs change.

An accountant may advise on:

• Setting up additional companies

• Creating group structures

• Separating trading and investment activity

• Preparing for sale or exit

This strategic advice is often where the greatest long term value lies.

Ensuring Companies House compliance

Beyond accounts, limited companies have ongoing Companies House obligations.

An accountant often helps with:

• Confirmation statements

• Changes to directors or shareholders

• Share issues

• Maintaining statutory records

This keeps the company compliant and avoids administrative penalties.

Explaining numbers in plain English

One of the most underrated parts of an accountant’s role is interpretation.

Many directors are not interested in technical accounting language. They want to understand what the numbers mean for them.

A good limited company accountant explains:

• How the business is really performing

• Where money is being made or lost

• What risks exist

• What options are available

This turns data into insight.

What a limited company accountant does not usually do

It is also important to be clear about what typically falls outside the accountant’s role.

This often includes:

• Running the business

• Chasing customer payments

• Making commercial decisions

• Managing staff

Understanding this avoids unrealistic expectations and improves the working relationship.

Why the relationship matters

In my experience, the best outcomes come when the accountant is seen as part of the support team rather than a necessary cost.

Regular communication, openness, and early questions make a huge difference.

A limited company accountant works best when:

• They are involved before problems arise

• They understand the business goals

• They are trusted to challenge decisions

Final thoughts

So what does a limited company accountant actually do. Far more than many people realise.

Yes, they prepare accounts and tax returns, but that is only the starting point. A good accountant protects compliance, reduces risk, improves tax efficiency, supports decisions, and provides clarity in areas that often feel overwhelming to directors.

In my experience, the real value of a limited company accountant is not found in forms and deadlines. It is found in the confidence they give you to run your business knowing that the financial foundations are solid and that someone is looking out for the details that matter.

You may also find our guidance on Do I need an accountant for my limited company and How can a limited company accountant help me plan for growth helpful when exploring related limited company questions. For a broader overview of running and managing a company, you can visit our limited company hub.