How to Start an Accountancy Practice in the UK

Starting your own accountancy practice is one of the most natural moves for qualified accountants and bookkeepers who want more control over their working life. You already understand the numbers — but setting up the business side takes a slightly different skill set.

This guide walks you through everything you need to know, from registering with HMRC to winning your first clients.

Do You Need Qualifications?

In the UK, anyone can technically call themselves an accountant and offer bookkeeping services. However, to offer certain regulated services — such as audit, insolvency, or investment advice — you must hold the relevant qualifications and be registered with a recognised supervisory body.

Most clients will expect you to hold a qualification from one of the main professional bodies:

• ACCA (Association of Chartered Certified Accountants)
• ICAEW (Institute of Chartered Accountants in England and Wales)
• AAT (Association of Accounting Technicians)
• CIMA (Chartered Institute of Management Accountants)

If you plan to offer tax services, you should register with HMRC as a tax agent. If you handle client money, you will also need to register for anti-money laundering (AML) supervision with your professional body or HMRC.

Sole Trader or Limited Company?

Most new practices start as sole traders. It is simpler, cheaper, and means less admin. You register with HMRC for Self Assessment, keep records of your income and expenses, and file a tax return each year.

Once your profits consistently exceed around £40,000–£50,000, it may become more tax-efficient to operate through a limited company. As a director, you can pay yourself a combination of salary and dividends, which can reduce your overall National Insurance liability.

There is no rush to incorporate. Start simple, and review your structure annually as your practice grows.

Registering with HMRC

As a sole trader, you must register for Self Assessment with HMRC within three months of starting your business. You can do this online at GOV.UK.

You will receive a Unique Taxpayer Reference (UTR) by post, usually within 10 working days. You will need this to file your Self Assessment tax return.

If you expect your turnover to exceed £90,000 in a 12-month period, you must also register for VAT. Many accountants register voluntarily below this threshold, as most of their clients are VAT-registered businesses and you can reclaim VAT on your own expenses.

Professional Indemnity Insurance

Professional indemnity insurance (PII) is essential — and likely a requirement of your professional body. It protects you if a client suffers a financial loss because of an error in your work.

Typical cover starts at around £500–£1,000 per year for a sole practitioner. The amount of cover you need depends on the size and nature of your clients.

You should also consider public liability insurance and cyber insurance, especially if you store client data electronically.

Setting Up Your Practice

You do not need expensive premises to get started. Many successful practices run entirely from a home office, with client meetings held at the client's premises or via video call.

Essential setup costs include:

• Practice management software — for managing clients, deadlines, and workflows
• Accounting software — yes, accountants need their own bookkeeping sorted too
• A professional email address — use your own domain, not a free email provider
• A simple website — even a single page with your services and contact details helps
• Cloud storage — for secure document management and sharing

Claimable Expenses

As an accountant running your own practice, you can claim a wide range of expenses against your taxable profits:

• Professional subscriptions — ACCA, ICAEW, AAT, or CIMA fees
• Software subscriptions — accounting, practice management, and cloud storage
• Professional indemnity insurance
• Home office costs — either the simplified flat rate (£6 per week) or a proportion of actual costs
• Training and CPD — courses, conferences, and study materials that maintain or update your existing skills
• Marketing costs — website hosting, business cards, advertising
• Travel expenses — visiting clients (but not your regular commute if you have a fixed office)
• Telephone and broadband — the business proportion
• Stationery and postage

Keep receipts for everything. A tool like Accounted makes this straightforward — snap a photo of each receipt and it is categorised automatically.

AML Registration and Compliance

If you provide accountancy, tax, or audit services, you must register for anti-money laundering supervision. Your professional body (ACCA, ICAEW, etc.) will usually act as your supervisor. If you are not a member of a professional body, you must register directly with HMRC.

You will need to:

• Carry out client due diligence (identity checks) on all new clients
• Maintain records of your checks
• Report any suspicious activity to the National Crime Agency
• Complete regular AML training

This is not optional. Failure to register can result in significant fines.

Winning Your First Clients

The best source of new clients for a new practice is your existing network. Former colleagues, friends who run businesses, and contacts from your professional body are all potential clients.

Other effective strategies include:

• Referrals — ask satisfied clients to recommend you
• Local networking — attend business networking events in your area
• Online presence — a clear website with good content helps potential clients find you
• Social media — LinkedIn is particularly effective for professional services
• Partnerships — build relationships with solicitors, IFAs, and mortgage brokers who can refer clients

Avoid competing on price alone. Clients who choose you purely on cost are the first to leave when someone cheaper comes along. Focus on the value you provide.

Industry-Specific Tax Rules

Running an accountancy practice comes with a few specific tax considerations:

• Basis period reform — from April 2024, all sole traders are taxed on profits arising in the tax year (6 April to 5 April). Make sure your own records align with this.
• Flat rate VAT scheme — if you are VAT-registered, the flat rate for accountancy services is 14.5%. Check whether this is beneficial compared to the standard scheme.
• Capital allowances — you can claim Annual Investment Allowance on equipment such as computers, monitors, and office furniture.
• Pension contributions — contributions to a personal pension are one of the most effective ways to reduce your tax bill as a sole trader.

Bookkeeping for Your Own Practice

It is tempting to put your own books last on the list. Do not. Messy records make tax returns stressful and increase the risk of errors.

Set aside time each week — even 30 minutes — to reconcile your bank account, file receipts, and record any expenses. Use software that connects to your bank and automates as much as possible.

Accounted is built specifically for UK sole traders and small practices. It connects to your bank, categorises transactions using AI, and keeps everything ready for your Self Assessment filing.

Key Deadlines

• 31 January — Self Assessment tax return deadline (for the previous tax year ending 5 April)
• 31 January — balancing payment and first payment on account due
• 31 July — second payment on account due
• Quarterly — VAT returns (if VAT-registered)
• Monthly or quarterly — AML compliance checks and record updates

Getting Started

Starting an accountancy practice is one of the lower-risk ways to become self-employed. You already have the skills, and the startup costs are minimal compared to most businesses.

The key is to keep your own house in order — register properly, get insured, stay on top of your AML obligations, and keep your books tidy from day one.

Ready to keep your practice finances organised from the start? Sign up for Accounted and let Penny, our AI bookkeeper, handle the day-to-day so you can focus on your clients.