What do limited companies accountants actually do — and are they worth it?
Most limited company directors pay for an accountant without fully understanding what they should be getting. This post sets out what good support looks like, what it costs, and how to tell whether yours is doing enough.
It is a question we hear surprisingly often: “I have an accountant, but I am not really sure what they do for me.” If you run a limited company and feel that way, you are not alone — and the honest answer is that the range of what limited companies accountants actually deliver varies enormously.
Some firms do the bare minimum: file your annual accounts, submit your corporation tax return, and send you a bill. Others work with you throughout the year, keeping you across your numbers, flagging tax planning opportunities, and making sure you never get caught out by a deadline. The difference in outcome for the business owner can be significant.
So in this post we want to set out clearly what a limited company in the UK is actually required to file, what a proper accountant should be doing on top of that, what you can reasonably expect to pay, and how to judge whether you are getting value from the relationship.
What a limited company must file each year
Before assessing what your accountant does, it helps to understand what a limited company is legally required to do. The obligations are more involved than many directors realise when they first incorporate.
- Annual accounts at Companies House — due nine months after your financial year end. Your first set of accounts are due 21 months after the company was incorporated.
- Corporation Tax payment — due nine months and one day after the end of your accounting period.
- Company Tax Return (CT600) — filed with HMRC within 12 months of the accounting period end.
- Confirmation statement — an annual filing to confirm your company’s registered details at Companies House.
Miss any of these and the penalties start quickly. Companies House late filing penalties for small companies start at £150 and rise the longer accounts remain outstanding. HMRC charges interest on late Corporation Tax from the day it was due.
If your company is VAT-registered, quarterly VAT returns are added to this list. If you run payroll, Real Time Information (RTI) submissions are required on or before each payday. For construction businesses, CIS obligations sit on top of all of that.
This is the compliance floor — the minimum a limited company accountant should be managing for you. It is not the ceiling.
The difference between compliance and actual support
Compliance means your returns get filed and you do not receive penalties. It is necessary, but it is not the same as being supported. In our experience, the directors who feel most underserved by their accountant are those who receive their accounts six weeks before the filing deadline, sign them without really understanding them, and hear nothing else until the following year.
That is a filing service. It is not an advisory relationship.
What a genuinely useful accountant does beyond compliance includes:
- Reviewing your salary and dividend structure each tax year to ensure it remains tax-efficient
- Flagging capital allowances on equipment purchases before you make them, not afterwards
- Reviewing whether you should be VAT-registered — and if so, which scheme suits your business
- Providing management accounts so you understand your profitability during the year, not just at year end
- Advising on expenses you are legitimately entitled to claim but may not know about
- Keeping you informed when HMRC rules or tax rates change and what that means for you
The goal is that you never face an unexpected tax bill, because nothing should come as a surprise. That proactive approach is what separates a firm that gives you clarity from one that just produces paperwork.
A firm that files your accounts once a year and is otherwise unreachable is not a business partner. It is a filing service — and there is a meaningful difference in what you get for your money.
What should you expect to pay?
Fees vary depending on the size and complexity of your company, but there are reasonable benchmarks you can use to sense-check what you are paying.
For a micro-entity — a limited company with turnover under £100,000, minimal transactions, and no employees — monthly fees typically sit in the region of £80 to £150. For a more active trading company with VAT, payroll, and a higher volume of transactions, fees more commonly fall between £150 and £300 per month. Complex structures, multiple directors, property income, or construction businesses tend to sit at the higher end or above it.
VAT registration usually adds to the base fee — typically £20 to £60 per month depending on the volume of returns and the complexity of the scheme.
The right question is not just “what am I paying?” but “what am I getting for it?” A firm charging £100 per month that files your accounts once a year and is otherwise unreachable is not necessarily better value than one charging £200 per month that reviews your tax position quarterly, responds the same day, and saves you from a planning mistake once a year. The cost of that mistake would typically outweigh a year’s fees.
Be wary of very low flat-fee services that bundle everything into a single price point. They often work on volume, which means the level of personal attention you receive is limited.
What to look for when choosing one
If you are choosing a limited company accountant for the first time, or questioning whether your current one is right, there are a few things we would suggest looking at honestly.
Qualifications
Look for an accountant who holds a recognised qualification — ACCA, ACA (ICAEW), or CIMA are the main ones for practice work. These bodies have professional standards, continuing development requirements, and — importantly — client money and complaints procedures. An unqualified bookkeeper can handle some tasks, but for corporation tax and advisory work, you want a qualified practitioner.
Responsiveness
Ask directly: what is your typical response time? If you send an email or message with a question, will you hear back the same day? The accountants clients trust most are not necessarily the most technically brilliant — they are the ones who answer the phone and respond promptly when something comes up.
Proactive communication
Does the accountant reach out to you during the year, or do you only hear from them when a deadline is approaching? Year-round communication is a signal that your accountant is thinking about your business, not just managing a filing queue.
Industry understanding
If you work in trades, construction, e-commerce, or property, look for a firm that works with businesses like yours regularly. The nuances of CIS, IR35, or merchant platform income are not general knowledge — they require genuine familiarity.
Our take
Most limited company directors are paying for more than they realise — or less than they need, depending on how you look at it. The compliance obligations of running a limited company are real, the deadlines are firm, and the penalties for missing them are immediate. A good accountant handles all of that without it becoming your problem.
But the firms that directors genuinely value are the ones doing more than filing. They are keeping an eye on tax efficiency, reviewing the numbers during the year, and being available when questions arise. That is what limited companies accountants at their best should look like.
If that does not describe your current experience, or if you are setting up a limited company and want to start with the right support in place, we are happy to have a conversation. No pressure, and the initial chat is free.
Common questions
Do I legally have to use an accountant for a limited company?
No — there is no legal requirement to hire an accountant to run a limited company in the UK. However, you are still required to file annual accounts, a corporation tax return, and a confirmation statement, and to pay tax on time. Many directors find that doing this without professional help is time-consuming, error-prone, and often ends up costing more than an accountant would have.
How much does a limited company accountant cost per month?
For most owner-managed limited companies, monthly accountancy fees range from around £80 to £300 depending on the size of the business, whether it is VAT-registered, how many employees are on payroll, and the level of advisory support included. Micro-entities with low turnover and simple affairs typically sit at the lower end of that range.
When should I file my limited company’s first accounts?
Your first set of accounts must be filed with Companies House within 21 months of the date your company was incorporated. After that, annual accounts are due within nine months of the end of each financial year. Missing these deadlines triggers automatic penalties, which increase the longer the accounts remain outstanding.
What is the difference between an accountant and a bookkeeper for a limited company?
A bookkeeper records transactions and keeps your records up to date. An accountant — particularly a qualified one — prepares statutory accounts, handles corporation tax, advises on tax planning, and takes responsibility for compliance with HMRC and Companies House. Many businesses need both, though some accountants offer a combined service covering both functions.
Can I switch accountants mid-year without disruption?
Yes. Switching accountants at any point in the year is straightforward. Your new accountant will contact your previous one to obtain your financial records and any outstanding information — a process called professional clearance. There is no need to wait until year end, and a good firm will manage the transition so you do not experience any gaps in service.