Do I need an accountant if I’m a sole trader in the UK?

Do I need an accountant if I’m a sole trader in the UK?

Becoming a sole trader is one of the most straightforward ways to start working for yourself in the UK. There’s no company incorporation process, fewer ongoing filings than a limited company, and you can often begin trading quickly. That simplicity can make it tempting to handle everything alone—including your bookkeeping and tax return. And you can: plenty of sole traders successfully manage their finances without professional help.

But “can” and “should” aren’t always the same thing. Whether you need an accountant depends on how comfortable you are with record-keeping, how complex your income and expenses are, how much time you can realistically devote to admin, and how much you want to reduce the risk of mistakes. It also depends on your goals—some people want the cheapest compliance route possible, while others want advice that helps them grow, plan, and sleep better at night.

This article walks through what an accountant actually does for a UK sole trader, when it’s worth paying for one, when it’s probably not necessary, and how to decide based on your situation.

What being a sole trader involves in practice

As a sole trader, you run your business personally rather than through a separate legal entity. You keep your profits after tax, you’re responsible for your business debts, and you generally report your business income through Self Assessment. In day-to-day terms, this usually means you’ll need to:

• Keep records of your sales/income (invoices, takings, online platform statements, etc.).

• Keep records of your business costs (receipts, bills, subscriptions, mileage logs, and so on).

• Understand what counts as a business expense and what doesn’t.

• Set aside money for tax and National Insurance (and potentially payments on account).

• Submit a Self Assessment tax return if you’re required to, and pay what you owe on time.

• Potentially register for VAT if you cross the threshold or choose to register voluntarily.

None of these tasks absolutely requires an accountant. Many people use basic spreadsheets or accounting apps and do their own return. The question is whether you’ll do it accurately, efficiently, and with enough planning to avoid unnecessary tax, stress, or penalties.

What an accountant actually does for a sole trader

Accountants aren’t just there to “submit the tax return.” That’s one part of the job, but a good accountant can help in several practical ways:

1) Bookkeeping support and systems

An accountant can help you set up a system that makes it easier to track income and expenses. That might be a simple spreadsheet structure, a cloud bookkeeping app setup, or a routine that fits how you work. Even if you do the day-to-day bookkeeping yourself, having a professional set up the framework can reduce errors and save time later.

2) Preparing and submitting your Self Assessment

This is the most common reason sole traders hire an accountant. They’ll take your records, calculate your profit, apply allowable expenses, handle capital allowances where relevant, and prepare and submit your tax return. They can also advise on payments on account and help you plan for them.

3) Making sure you claim what you’re entitled to

One of the biggest benefits of an accountant is ensuring you don’t miss legitimate deductions. Sole traders often under-claim because they’re cautious or unsure. Commonly missed areas include use of home as office, proportionate household costs, business mileage, small subscriptions, equipment allowances, professional fees, certain training costs, and a range of industry-specific expenses.

Equally important: accountants can help ensure you don’t over-claim or claim the wrong things, which can create problems if queried later.

4) VAT guidance and registration decisions

VAT can dramatically change your admin and cashflow. An accountant can help you decide whether to register voluntarily, which VAT scheme might suit you, how to price your services if VAT becomes relevant, and how to stay on top of quarterly submissions.

5) Cashflow and tax planning

Tax planning isn’t about loopholes. It’s about timing, structure, and understanding how decisions affect your tax bill. For example: when to buy equipment, whether a purchase should be treated as a capital item, what happens if your profit rises, and how to budget for tax.

6) Support if you’re contacted by HMRC

Many sole traders worry about making an innocent mistake and getting a letter from HMRC. While most people never face a full-blown investigation, queries do happen. Having an accountant can mean you have someone who can respond clearly, supply the right documents, and keep communication calm and organised.

7) Business structure advice

At some point, you may wonder if staying a sole trader is still the best option. Accountants can help you think through whether incorporation might make sense, what the trade-offs are, and what additional responsibilities a limited company brings. They can also advise on registration thresholds, operational risks, and how your plans (mortgages, grants, contracting rules, expansion) might influence the best structure.

When you probably don’t need an accountant

There are plenty of scenarios where you can confidently manage without one, especially if you’re happy to learn and keep things simple.

You have a straightforward business with low complexity

If you have one main income stream, a small number of regular expenses, and minimal grey areas, DIY bookkeeping is often manageable. For instance, a sole trader with a handful of clients, simple invoicing, and few costs may find it easy to keep records and submit the return.

You’re organised and comfortable with admin

Some people naturally keep receipts, reconcile bank transactions monthly, and treat paperwork as part of doing business. If that’s you, an accountant may not add much value beyond reassurance.

You have time to learn and keep up with the basics

You don’t need to become a tax expert, but you do need a working understanding of what records to keep, what expenses are allowable, and how to submit your tax return correctly. If you’re willing to learn and you keep things tidy, you might prefer to save the cost and handle it yourself.

You’re in the very early stages and profits are tiny

In the earliest phase, some people want to keep overheads as low as possible. If your profit is small and your situation is simple, paying for an accountant might feel disproportionate. In that case, it can still be wise to do a “light-touch” approach: keep good records and maybe pay for a one-off consultation to set you up properly.

When hiring an accountant is usually worth it

Even if you can do it yourself, there are many situations where an accountant quickly pays for themselves—in time, reduced stress, better decisions, and often tax saved or mistakes avoided.

Your records are messy or you fall behind

If you find yourself dreading your bookkeeping or leaving it until the last minute, that’s a sign you’ll benefit from help. A common pattern is “I’ll sort it out later,” followed by a stressful scramble near the filing deadline. An accountant can help you catch up and, just as importantly, set up a routine to prevent it happening again.

You’re not sure what you can claim

Uncertainty around allowable expenses is one of the top reasons sole traders either overpay tax or worry constantly that they’re doing something wrong. If you find yourself Googling every receipt and still not feeling confident, a professional can clarify your position quickly and tailor advice to your work.

Your income increases and tax becomes a bigger bite

When profits grow, the stakes rise. Small errors become expensive errors, and planning becomes more valuable. At higher profits, decisions around equipment, pension contributions, and structure can have a bigger impact.

You have multiple income streams or irregular work

Side projects, online platforms, affiliate income, subcontracting, and mixed services can complicate your records. If you’re juggling several revenue sources, an accountant can help keep everything correctly categorised and ensure nothing is missed.

You’re dealing with VAT or close to the VAT threshold

VAT is a major tipping point. The admin load increases, deadlines become more frequent, and mistakes can be costly. If VAT is on your horizon, professional support can save you from common traps and help you choose a scheme that fits.

You employ people or pay subcontractors

Once you start paying others—whether employees, freelancers, or subcontractors—your obligations can expand. Even if you remain a sole trader, you may need help understanding payroll responsibilities, reporting, and maintaining clear documentation.

You use a vehicle heavily or have significant travel

Vehicle costs and mileage claims are a frequent source of confusion. There are different methods and the best option depends on your circumstances. An accountant can help you choose a method and keep the right evidence.

You work from home and want to claim properly

Working from home is common, but many sole traders either claim nothing or claim incorrectly. A professional can help you choose an approach that’s reasonable and well-supported by records.

You’re applying for a mortgage or finance

Lenders often want clear evidence of income—sometimes with an accountant’s involvement. While you can still apply without an accountant, professionally prepared figures and orderly accounts can make the process smoother and reduce delays.

You want peace of mind

This is underrated. Some people simply want to know a professional has reviewed the numbers, checked the claims, and handled the filing. That peace of mind can be worth the fee even if the tax saving isn’t dramatic.

Common mistakes sole traders make without an accountant

Doing it yourself doesn’t automatically mean you’ll make mistakes. But certain problems show up repeatedly, especially when people are rushed or unsure.

Mixing personal and business spending

Using one bank account for everything can make bookkeeping harder and increases the chance of missing expenses or recording personal spending as business costs. It also makes your records harder to explain if you’re ever asked about them. Many sole traders find that having a separate business bank account (even a basic one) makes life much easier.

Not setting aside money for tax

It’s easy to spend what comes in—until the tax bill arrives. Planning for tax and National Insurance is essential. If you don’t anticipate payments on account, the first big January bill can be a shock. An accountant can help you forecast and create a routine so tax money isn’t accidentally spent.

Under-claiming allowable expenses

People often assume they can only claim “big” expenses and ignore small, legitimate costs that add up over a year. Or they avoid claiming anything that feels slightly unclear. A professional can help you claim what’s reasonable and appropriate, which can reduce your taxable profit.

Over-claiming or claiming personal items

The flip side is claiming things that are partly personal without apportioning, or claiming expenses that don’t relate to the business. This is often accidental rather than dishonest. But it’s still risky. An accountant can help you draw the line in a way that’s defensible and consistent.

Inconsistent record-keeping

Some sole traders keep great records for six months and then let it slide. Others keep receipts but don’t track what they were for. Others record payments but lose invoices. Inconsistency is what makes tax time painful. Getting a system in place—whether DIY or with an accountant—solves most of the stress.

Missing deadlines and penalties

Self Assessment deadlines are unforgiving. Late filing and late payment can trigger penalties and interest. If you’re busy, stressed, or juggling lots of work, it’s surprisingly easy to miss a date. Accountants typically work to earlier internal deadlines, which can keep you on track.

Confusion over cash basis and other accounting choices

How you account for income and expenses can affect your tax timing and the clarity of your records. Many sole traders use a straightforward approach, but if you’re buying equipment, carrying stock, or dealing with deposits and prepayments, choices matter. An accountant can explain what suits your situation and keep your reporting consistent.

How much does an accountant cost for a sole trader?

Costs vary based on location, the accountant’s experience, and how complex your business is. Some accountants offer fixed-fee packages for sole traders that include annual accounts preparation and the Self Assessment return, while others charge by the hour. The more organised your records are, the less time it takes, which can reduce the cost.

It’s helpful to think of accountancy fees in two ways:

• Compliance cost: the minimum you pay to ensure everything is prepared and filed correctly.

• Value cost: the extra you pay for advice, planning, and support that helps you make better decisions.

If you only want a tax return filed, you can often keep costs down by maintaining tidy records and providing everything in an organised way. If you want ongoing support, quarterly check-ins, VAT help, and planning, you’ll pay more—but you may also get more value in return.

What you can do yourself even if you hire an accountant

Hiring an accountant doesn’t mean you must outsource everything. In fact, many sole traders get the best outcome with a hybrid approach.

Do your own bookkeeping, outsource the tax return

You track your transactions throughout the year, then hand over clean figures and supporting documents at year-end. This keeps costs down and still gives you professional oversight where it matters most.

Use software and get an accountant to review

You can use a bookkeeping app to record income and expenses, then have an accountant review the accounts and submit the return. This can be a good balance of control and confidence.

Pay for a one-off setup session

If you’re new to self-employment, a single consultation can be extremely useful. You can ask: what records should I keep, what can I claim, how do I price for tax, should I separate bank accounts, and what habits will prevent problems later?

How to decide: a simple self-check

If you’re unsure, consider these questions. The more “yes” answers you have, the more likely an accountant is worth it.

• Do I feel anxious about filing my return or getting something wrong?

• Do I avoid bookkeeping and leave it until the last minute?

• Do I have multiple income streams or lots of expenses to track?

• Am I unsure what I can claim, especially for home working, travel, or equipment?

• Am I close to VAT registration or already dealing with VAT?

• Has my profit increased to the point where tax planning would help?

• Do I want advice on whether to stay a sole trader or consider a limited company?

• Would I rather spend time earning than doing admin?

If most of your answers are “no,” you may be fine doing it yourself. If several are “yes,” it’s at least worth exploring professional support.

Choosing an accountant: what to look for

If you decide to hire someone, the right fit matters. An accountant can be a long-term partner in your business, or simply a reliable service provider who keeps you compliant. Either way, look for a combination of competence, clarity, and communication.

Experience with sole traders and your industry

Sole trader work has its own patterns, and some industries have their own quirks—cash takings, platform income, materials-heavy work, heavy mileage, or lots of small transactions. An accountant who regularly works with businesses like yours will spot issues quickly and offer practical advice.

Transparent pricing

Ask what’s included and what costs extra. For example, does the fee include dealing with HMRC queries? Does it include advice calls? Is bookkeeping included or separate? Clear pricing avoids surprises and helps you compare options fairly.

Communication style

You want someone who explains things in plain language and responds in a reasonable timeframe. You don’t need jargon; you need clarity. A short initial conversation can reveal a lot about how they communicate.

Digital friendliness and process

Many accountants work with cloud software and digital document sharing, which can make life easier. Ask how they prefer to receive records, how often they expect updates, and what their timeline is around key deadlines.

Professional credentials and standards

While not every good accountant will look the same on paper, professional membership and a commitment to standards can be reassuring. It also signals accountability and ongoing learning. If you’re choosing between multiple options, this can be one factor in your decision.

Red flags to watch for

Most accountants are professional and reliable, but it’s still wise to be cautious. Consider it a warning sign if:

• They guarantee dramatic tax savings without understanding your situation.

• They encourage you to claim things that feel obviously personal or dubious.

• They are vague about fees or what’s included.

• They seem difficult to contact or dismiss your questions.

• They don’t ask about your business activities and how you earn income.

A good accountant is careful, curious, and clear—especially when it comes to boundaries and evidence.

DIY options: how to stay organised without an accountant

If you decide you don’t need an accountant right now, you can still reduce stress by putting a simple system in place.

Separate your money flows

Even if you don’t open a formal business account, separating business income and expenses from personal spending makes tracking easier. Many sole traders use a dedicated bank account purely for business to simplify reconciliation.

Set a weekly or monthly money routine

Pick a regular time—weekly or monthly—to update your records, file receipts, and check what’s coming in and going out. A routine is far easier than a once-a-year scramble.

Store receipts and invoices consistently

Whether you use an app, cloud folder, or paper file, consistency is key. Name files in a way you can search later. If you have paper receipts, photograph them and store them in a single place.

Track mileage and home working properly

These areas are common sources of confusion, so it’s worth keeping good logs. Make it easy for yourself: create a simple mileage log and keep notes on how you calculate any home working claim, so you can justify it if asked.

Set aside tax as you go

A practical method is to move a percentage of each payment you receive into a separate savings pot for tax. The exact percentage depends on your overall income and circumstances, but the habit itself is what matters. If you’re unsure what percentage to use, a one-off chat with a professional can help you choose a safe approach.

Know your deadlines

Put key dates in your calendar and aim to complete your return well before the deadline. Last-minute filing increases the risk of errors and missed information.

Can an accountant save you money?

Sometimes yes, sometimes no—and often the honest answer is “not directly, but indirectly.”

An accountant may reduce your tax bill by ensuring you claim all allowable expenses and apply the correct treatment for purchases. They may also save you money by preventing mistakes that lead to penalties, interest, or overpayment. Indirectly, they can save you time—time you might use to earn more, market your business, or rest.

However, if your business is extremely simple and you are already claiming everything correctly, the accountant might not reduce your tax much at all. In that case, the value may be mainly peace of mind and time saved.

Do you “need” an accountant? The honest answer

In the UK, being a sole trader does not automatically require you to have an accountant. Many people do their own bookkeeping and tax returns. If your business is simple, you’re organised, and you’re comfortable learning the basics, you may not need one.

But many sole traders find that hiring an accountant is one of the best early investments they make. It can reduce stress, prevent mistakes, improve record-keeping, and provide clarity on expenses, VAT, and planning. As your income grows or your situation becomes more complex, the value usually increases.

A useful way to frame it is this: you don’t need an accountant to be a sole trader, but you might want one to run your sole trader business with more confidence and less friction.

A practical middle ground

If you’re undecided, consider a middle path:

• Do your own bookkeeping but pay an accountant to prepare and submit your Self Assessment.

• Book a one-off consultation to set up your record-keeping and clarify what you can claim.

• Use software for day-to-day tracking and ask an accountant to review your figures once a year.

This approach keeps costs under control while still giving you professional input where it matters most.

Final thoughts

Choosing whether to hire an accountant as a UK sole trader is less about obligation and more about strategy. If you value time, certainty, and guidance—or if your business is growing and your finances are becoming more complex—an accountant can be a strong ally. If your situation is simple and you’re confident with admin, you can absolutely handle it yourself with a solid system and good habits.

Whichever path you choose, the key is to stay organised, keep clear records, and treat tax planning as part of running your business—not an afterthought. That alone will put you ahead of most of the stress that sole traders experience.