Do I Need an Accountant as a Sole Trader?

Quick answer

Most sole traders don’t need an accountant in their first year or two. Modern accounting software handles bookkeeping, tax calculations, and Self Assessment filing for a fraction of the cost.

Consider hiring one when:

• your profits pass £40,000
• your tax situation gets complex
• HMRC contacts you

No. Most sole traders don’t need an accountant, especially early on. Modern accounting software replaces most of what accountants traditionally did.

That said, there are situations where an accountant earns their fee many times over.

When you don’t need one

If your business is straightforward, you can handle your own tax affairs.

You probably don’t need an accountant if:

• Your income is under £50,000
• You have one income stream
• Your expenses are standard
• You use accounting software
• You don’t have employees
• You’re not VAT registered
• You don’t have complex income

When an accountant is worth it

You’re approaching the limited company decision

Once profits exceed £40,000–£50,000, tax savings from incorporating can be significant.

You have complex income

Rental, foreign income, capital gains, etc.

HMRC has contacted you

An accountant is worth it immediately.

You want optimisation

Tax planning, allowances, structure.

You hate doing it

If it causes stress or gets delayed, outsource it.

How much does an accountant cost?

The middle ground

• Use accounting software
• Hire an accountant for an annual review

Typical cost: £200–£400/year

How to find a good one

• Check qualifications (ACCA, ACA, etc.)
• Choose someone experienced with sole traders
• Use cloud-based tools
• Get fixed pricing
• Ask for referrals

When to upgrade

Next step

1. Use accounting software
2. Connect your bank account
3. Reassess after your first tax return
4. At £40k+, consider structure

Last updated: March 2026