Do You Need an Accountant as a Sole Trader? (Honest Answer)

The Question Nobody in the Industry Wants to Answer Honestly

Ask an accountant whether you need one, and you'll always get the same answer. Ask a software company, and they'll say their app replaces one entirely. Neither is fully honest.

Here's the truth from a team that builds bookkeeping software and works with accountants: it depends on your situation, and most sole traders are paying for more than they need.

Good accountants are genuinely valuable. But the traditional model — paying £500-£1,000 a year for someone to file a tax return you could do yourself — doesn't make sense for everyone. Especially now that Making Tax Digital is changing how the self-employed interact with HMRC.

Let's break down what accountants do, what it costs, and where the line is between "definitely need one" and "you've got this."

What Does an Accountant Actually Do for a Sole Trader?

Most sole traders who use an accountant get some combination of:

• Year-end accounts preparation — Compiling your income and expenses into a final set of accounts for the tax year.
• Self Assessment filing — Completing and submitting your SA100 (and supplementary pages) to HMRC.
• Tax advice — Answering questions about allowable expenses, tax-efficient structures, and how to reduce your bill.
• Bookkeeping — Some accountants include basic bookkeeping, though many charge extra or expect you to keep your own records.
• MTD submissions — With quarterly submissions becoming mandatory, some accountants handle these on your behalf.

Higher-end services might include management accounts, VAT returns, CIS compliance, or advice on whether to incorporate as a limited company.

What Does It Cost?

Accountant fees for sole traders in the UK typically fall into these ranges:

| Service Level | Typical Annual Cost | |---|---| | Tax return filing only | £150–£300 | | Accounts + tax return | £300–£600 | | Full bookkeeping + accounts + tax return | £600–£1,000 | | Ongoing advisory + everything above | £1,000–£2,000+ |

Those figures are for straightforward sole traders. Landlords, CIS subcontractors, or those with foreign income should expect to pay more.

The average UK sole trader earns £25,000-£35,000. Paying £800 on a £30,000 income means nearly 3% of earnings going to compliance — before tax. So is it worth it?

When You Definitely Need an Accountant

There are situations where an accountant isn't optional:

You're Thinking About Incorporating

Moving from sole trader to limited company has major tax implications. Get it wrong and you could pay more tax. An accountant can model the numbers for your situation. This is worth paying for.

You Have Multiple Income Streams

Juggling self-employment, rental income, PAYE, and investments makes your return complex. The interactions between income types, tax codes, and thresholds need professional attention.

You're in a Complex Industry

CIS subcontractors, landlords with multiple properties, those with overseas income — these involve specific rules that are easy to get wrong. The cost of a mistake far exceeds the cost of an accountant.

You've Received a Tax Investigation Notice

If HMRC opens an enquiry, get professional help immediately.

You Genuinely Hate Numbers

If bookkeeping causes you stress to the point it doesn't get done, an accountant is a worthwhile investment in your compliance.

When You Probably Don't Need One

Here's where the industry won't be honest with you: many sole traders are paying for services they don't need.

If you tick most of these boxes, you can likely manage without a traditional accountant:

• You have one business with one income stream
• You're not VAT-registered (or you have simple VAT affairs)
• Your expenses are straightforward (office costs, travel, materials)
• You keep decent records throughout the year
• You're comfortable using software and following guides

A sole trader plumber earning £45,000 with clear expenses for materials, van costs, and tools doesn't have a complicated tax situation. The same goes for a freelance designer or a cleaning business owner.

A straightforward Self Assessment takes 2-3 hours with good records. With modern software handling calculations and MTD submissions, the barrier has never been lower.

The Middle Ground: Software Plus Occasional Advice

Here's what we think makes the most sense for most sole traders, and it's the model we've built Accounted around.

Use software for the 95% of work that's routine. Categorising transactions, tracking expenses, calculating tax, filing quarterly MTD updates, generating invoices, reconciling bank statements — this is repetitive work that software handles better than humans anyway. It's faster, it doesn't forget, and it doesn't charge you by the hour.

Use an accountant for the 5% that requires judgement. Am I better off as a limited company? Can I claim this unusual expense? How do I handle this inheritance that's affecting my tax? Should I register for VAT voluntarily?

This approach typically costs you £15-£39 per month for software (see our pricing) plus perhaps £100-£200 per year for occasional consultations. Compare that to £600-£1,000 per year for a traditional accountant handling everything.

Accounted's Free Accountant Portal: Best of Both Worlds

We built Accounted with a feature that most bookkeeping software doesn't offer: a free accountant portal.

You do your bookkeeping in Accounted — logging expenses, categorising transactions, snapping receipts via WhatsApp. Penny, our AI bookkeeper, handles the heavy lifting, categorising transactions with high confidence and flagging anything uncertain.

If you have an accountant, invite them to view your account — for free. They get read access to your transactions, categories, and tax position. They can leave notes, review Penny's work, and flag concerns. At year-end, your data is already clean, so your accountant spends 2 hours instead of 10. They charge accordingly. Everyone wins.

DIY Bookkeeping With AI Backup

The real shift happening right now is that AI has eliminated most of the skill barrier in basic bookkeeping. You no longer need to know which HMRC category "printer paper" falls under — Penny knows. You don't need to remember the mileage rate — Penny applies it automatically. You don't need to track tax deadlines in your calendar — Penny reminds you.

What you do need is to keep receipts, check your transactions regularly, and ask for help when something unusual comes up. That's it. That's the entire job.

The Honest Answer

Most sole traders with straightforward businesses are paying too much. Not because accountants overcharge — but because the routine work can now be handled more efficiently with software.

If your situation is complex, get an accountant. If it's straightforward, invest in good software and save hundreds a year. If you're in between, use the hybrid model: software for the routine, a professional for the tricky bits.

You don't need someone else to tell you that the Screwfix receipt is a business expense. You just need a system that makes recording it effortless.

Ready to simplify your bookkeeping? Try Accounted free for 14 days →

Related Reading

• UK Economic Outlook 2026: What Small Business Owners Need to Know

Related reading: When to Outsource as a Small Business Owner.

For step-by-step guidance, see our article on How to Handle Business Debt as a Sole Trader.

For step-by-step guidance, see our article on How to Close Your Sole Trader Business Properly.

Related reading: Working with a Virtual Assistant as a Sole Trader.

For step-by-step guidance, see our article on How to Fire a Client Professionally.

Accounted keeps your books sorted automatically so you can focus on running your business. See Accounted →