Accountants for small businesses

In a small business the accountant is often the one adviser who sees the whole picture. Day to day they may do the year-end accounts and tax returns, but much of the value comes at turning points: when you are deciding how to set up, when sales are getting close to the VAT threshold, when you hire your first employee, or when you want to know whether a limited company would suit you better.

Some owners use an accountant for everything. Others keep their own books and pay for a few hours at the key moments. Both approaches are common, and the right one depends on how much time and confidence you have.

Small business is a broad label. Typical examples of people who look for an accountant include:

• a cafe or shop with a handful of part-time staff and a card machine
• two friends running a design studio as a partnership
• a trades business whose turnover is creeping towards the VAT threshold
• a seasonal business, such as one serving visitors in summer, with uneven cash flow across the year
• an online seller who has started buying stock in bulk

If you work entirely on your own, our pages on accountants for sole traders and accountants for limited companies go into each structure in more depth.

A sole trader and the business are one and the same for tax, so profits are taxed through self assessment as the owner's income. A limited company is a separate legal person: it pays corporation tax on its profits and the owners are taxed on what they take out. The table below is a simplified comparison of the main filings, not a recommendation either way.

You must register for VAT if your total taxable turnover for the last 12 months goes over £90,000, and you then have 30 days after the end of that month to register. You must also register if you expect turnover to go over £90,000 in the next 30 days alone. You can choose to deregister if turnover falls below £88,000.

Once registered, most goods and services carry the standard rate of 20%, with a reduced rate of 5% and a zero rate for some items. All VAT-registered businesses keep records and file returns under Making Tax Digital for VAT. Some smaller businesses use the Flat Rate Scheme, which they may join if VAT turnover is £150,000 or less, excluding VAT. Our VAT returns page goes through this in more detail.

Taking on staff turns you into an employer. You run payroll, deduct tax and National Insurance and report each payment to HMRC on or before payday through a Full Payment Submission. Employers pay National Insurance of 15% on earnings above £5,000 a year, and many can reduce their bill with the Employment Allowance, which is £10,500 for 2026 to 2027. You must also pay at least the National Living Wage, which is £12.71 an hour for workers aged 21 and over from 1 April 2026.

Workplace pensions come in too. Automatic enrolment uses an earnings trigger, which is £10,000 for 2026/27, and GOV.UK sets out the other conditions that decide who must be enrolled. Our payroll page covers the monthly routine.

Many small business owners keep their own books in software and only bring in an accountant at year end. That can work well while the business is simple. The point where people tend to want regular help is usually when two or more of these milestones arrive together, for example registering for VAT in the same year as hiring staff, because the deadlines start to overlap and mistakes become more costly.

• Will the same person look after your bookkeeping, VAT, payroll and year-end accounts, or are they split between people?
• Is everything in the quote fixed, and what would trigger an extra charge?
• Can they give you the fees and scope of work in writing?
• Which body supervises them for anti-money laundering purposes? This is a legal requirement for every accountancy service provider.
• Are they comfortable with your sector, for example stock-heavy retail or seasonal trade?
• Which software do they support, and is it compatible with Making Tax Digital if you need it?

Because small businesses vary so much, published figures cover a wide range. The payments firm myPOS puts small business accountancy at from £50 to £500 per month (VAT not stated). Local firms set their own fees, and our guide on how much an accountant costs explains what pushes the price up or down.