What does an accountant do

What an accountant does for you depends mostly on how you earn your money. Some typical examples:

• For a sole trader, working out the profit from the year's income and expenses and putting it on a self assessment return, along with any other income.
• For a landlord, preparing the property pages of the return, including the separate treatment of mortgage interest.
• For a limited company, preparing the annual accounts for Companies House and the Company Tax Return for HMRC, and often the directors' own tax returns too.
• For an employer, running payroll and sending the reports HMRC expects each time staff are paid.
• For a VAT-registered business, preparing and sending VAT returns through Making Tax Digital software.

Some people also use an accountant, or a bookkeeper, to keep their day-to-day records. Our services overview explains each of these areas in more detail.

A large part of the value is dealing with HMRC so that you do not have to. Once you authorise an accountant as your agent, they can, for self assessment, submit returns, make relief claims and discuss your return with HMRC. For VAT they can discuss your affairs with HMRC and sign paper documents. Depending on the tax, you authorise them through an online service or your business tax account, and if that is not possible, by using form 64-8.

Authorising an agent does not hand over your legal duties. GOV.UK says you will still be legally responsible for your own tax, and if an agent submits your return you must check it and confirm it is correct before it goes in. A good working relationship usually means the accountant sends a draft, you check it, and only then is it filed.

Beyond the returns themselves, people often turn to an accountant at turning points. Examples include deciding whether to work as a sole trader or a limited company, which our guide to choosing between a sole trader and a limited company explores, working out how to pay yourself from a company, getting ready for Making Tax Digital, registering for VAT, or selling a property and facing the 60-day capital gains tax deadline. An accountant can also estimate your next tax bill so it is not a shock, and explain letters from HMRC.

In the UK the title accountant is not protected by law, so anyone can set up in business under that name. Chartered accountant is different: the title is reserved by the institutes' Royal Charters and rules for their members. ICAEW members in England and Wales use the letters ACA or FCA, and only ICAS members can use the letters CA in the UK.

A few kinds of work are restricted by law. A statutory auditor must be a member of a recognised supervisory body and eligible under its rules, and acting as an insolvency practitioner without being authorised is a criminal offence. Everyday tax returns and accounts are not restricted in this way.

Whatever their title, every business that provides accountancy services must be supervised for anti-money laundering purposes, either by HMRC or by a professional body, and trading while not registered is a criminal offence. Our guide on how to choose an accountant explains how to check this.

Many people with simple affairs file their own return through HMRC's online service and never use an accountant. Others pay for help once their income comes from several sources, when a deadline or a sale raises the stakes, or simply to save time. Our guide to questions to ask an accountant helps once you start looking. We are not an accountancy firm, but we read every enquiry and, where we can, we will put you in touch with a local accountant; how it works explains the process.