Do you need an accountant?
If you work for yourself, you may wonder whether you really need an accountant. The short answer is no, there is no legal rule that says a sole trader must use an accountant. You can manage your own records, complete your own Self Assessment tax return and deal with HMRC yourself. However, many sole traders choose to work with an accountant because it saves time, reduces stress and helps avoid costly mistakes. As your business grows, your finances can become more difficult to manage. You may need help with bookkeeping, allowable expenses, tax planning, VAT, payments on account or Making Tax Digital. In this guide, we explain when a sole trader may need an accountant, what an accountant can help with, and how to decide if it is the right choice for your business.
What is a sole trader?
A sole trader is someone who runs their own business as an individual. It is one of the simplest business structures in the UK. As a sole trader, you keep the profits your business makes after tax. However, you are also personally responsible for business debts, losses and legal obligations. This means your personal and business finances are closely linked. Sole traders usually need to register for Self Assessment, keep accurate records and submit a tax return to HMRC each year. Sole traders pay Income Tax and National Insurance on their business profits through Self Assessment.
Do sole traders legally need an accountant?
No, sole traders do not legally need an accountant. You are allowed to manage your own bookkeeping and submit your own tax return. Some sole traders do this successfully, especially when their business is simple, their income is low and they have only a small number of expenses. However, doing your own accounts takes time and requires a good understanding of tax rules. Mistakes can lead to missed expenses, incorrect figures, late filing penalties or unexpected tax bills. An accountant is not required by law, but they can be very useful if you want your finances handled properly.
When might a sole trader need an accountant?
You may benefit from using an accountant if your business is growing or your finances are becoming harder to manage. Common signs you may need help include:
- You are unsure what expenses you can claim.
- You are worried about making mistakes on your tax return.
- You are spending too much time on bookkeeping.
- Your income changes from month to month.
- You have several clients, suppliers or income streams.
- You are approaching the VAT registration threshold.
- You need help planning for tax payments.
- You have missed a Self Assessment deadline before.
- You are thinking about becoming a limited company.
- You want clearer advice about your profits and cash flow.
For many sole traders, the main benefit is peace of mind. Instead of trying to work everything out alone, you can get clear advice and know that your tax return has been prepared correctly.
What can an accountant do for a sole trader?
An accountant can help with much more than filling in your tax return. They can support you throughout the year and help you understand your business finances.
Self Assessment tax returns
Most sole traders need to complete a Self Assessment tax return each year. This tells HMRC how much income you have earned, what expenses you are claiming and how much tax you need to pay. The online Self Assessment deadline is usually 31 January after the end of the tax year. For example, the deadline for the 2025/26 tax year is 31 January 2027. An accountant can help you prepare and submit your return on time. They can also check that your figures are accurate and that you are not missing important expenses.
Bookkeeping and record keeping
Good bookkeeping makes tax returns much easier. It also helps you understand how your business is performing. An accountant or bookkeeper can help you keep track of:
- sales and income
- invoices
- receipts
- business expenses
- bank transactions
- mileage
- payments to suppliers
- money owed by customers
Keeping clear records throughout the year can help you avoid a last-minute rush before the tax deadline.
Allowable expenses
Many sole traders are unsure what they can and cannot claim as a business expense. This can lead to two problems. Some people claim costs they should not claim, while others miss out on expenses that could reduce their tax bill. Common allowable expenses may include:
- office costs
- business travel
- tools and equipment
- professional fees
- marketing costs
An accountant can explain what applies to your situation and help you claim expenses correctly.
Tax planning
A tax return looks backwards at what has already happened. Tax planning looks ahead. An accountant can help you plan for future tax bills, understand payments on account and put money aside at the right time. This can make your finances feel much more manageable. Tax planning can also help you decide whether it is still best to trade as a sole trader or whether a limited company may be more suitable as your business grows.
VAT advice
You must usually register for VAT if your taxable turnover goes over the VAT registration threshold. The VAT registration threshold increased from £85,000 to £90,000 from 1 April 2024. VAT can be confusing because it affects pricing, invoices, records and returns. An accountant can help you understand when to register, whether voluntary registration may be useful, and which VAT scheme may suit your business.
Making Tax Digital
Making Tax Digital is changing how many sole traders keep records and report information to HMRC. From 6 April 2026, sole traders and landlords with total annual income from self-employment and property over £50,000 must use Making Tax Digital for Income Tax. This means using compatible software to keep digital records and send quarterly updates to HMRC. The rules are being extended further, with sole traders and landlords with qualifying income over £20,000 due to be brought in from 6 April 2028. An accountant can help you prepare for these changes and choose suitable software.
Can I do my sole trader accounts myself?
Yes, you can do your sole trader accounts yourself. This may be suitable if:
- your business is very simple
- you have few transactions
- you are confident with numbers
- you understand Self Assessment
- you know what expenses you can claim
- you are happy to deal with HMRC yourself
However, it is important to be honest about the time involved. Even simple accounts can take longer than expected if your records are not organised. Doing it yourself may save accountancy fees, but it can cost you time. It may also cost you money if you miss tax-saving opportunities or make mistakes.
What should you look for in a sole trader accountant?
Choosing the right accountant is important. You need someone who understands small businesses and explains things clearly. Look for an accountant who:
- has experience with sole traders
- responds clearly and promptly
- understands your type of work
- can help with bookkeeping and tax returns
- gives practical advice, not just forms and figures
- can support you as your business grows
It is also worth asking whether they can help with cloud accounting software, VAT and Making Tax Digital. For many sole traders, the right accountant gives them more time to focus on their work and more confidence that their finances are being handled properly.
Need help with your sole trader accounts?
Jems Accountancy supports sole traders, freelancers and small businesses with bookkeeping, tax returns, VAT, payroll and business accounts. If you would like clear, friendly advice, our team can help you stay organised and make sense of your finances. Contact us today to find out how we can support your sole trader business.
