How to choose an accountant: what to check in the UK

Published Friday 15 May 2026

Table of contents

• Why hire an accountant
• What is the difference between a bookkeeper and an accountant?
• Choose a certified or chartered accountant
• Look for an accountant with relevant expertise
• How to find accountant candidates
• Find out what software the accountant uses
• When is it a good idea to hire an accountant?
• Decide how the accounting work will be divided
• Interview several candidates before you decide
• Understanding fees and pricing
• Do background checks
• What to do after appointing your accountant
• What to do if things go wrong
• Simplify your finances with Xero
• FAQs on choosing an accountant

Key takeaways

• A good accountant does more than file your tax return. They advise on tax planning, cash flow, and business growth, freeing you to focus on your business.
• Check that any accountant you're considering belongs to a recognised professional body. Key examples include ICAEW and ACCA.
• UK accountant fees vary widely, from around £220 for a basic Self Assessment return to £2,500 or more per year for full small business accounting support.
• Cloud accounting software like Xero helps you and your accountant work together in real time. Collaboration becomes smoother and more efficient.

Why hire an accountant

An accountant saves you time and reduces costly errors. They also help your business stay compliant with HM Revenue and Customs (HMRC) requirements. For many small business owners, the cost of hiring one is offset by tax savings and peace of mind.

Running a small business means juggling a lot. You're managing customers, suppliers, staff, and finances all at once. A qualified accountant takes the weight of compliance and financial planning off your shoulders. That leaves you free to focus on what you do best.

Beyond filing returns, a good accountant spots opportunities you might miss. They can advise on allowable expenses and help you plan for Making Tax Digital (MTD) requirements. They also guide you through key decisions as your business grows.

What can an accountant do for you?

The right accountant becomes a trusted adviser, not just a number cruncher. Here are some of the services they typically offer:

• Tax planning and compliance: preparing and filing your Self Assessment, Corporation Tax, and VAT returns accurately and on time
• Bookkeeping oversight: reviewing your financial records to ensure everything is accurate and up to date
• Business advice: helping with cash flow forecasting, budgeting, and financial strategy
• Payroll: managing staff wages, PAYE, and pension contributions
• Company formation and structure: advising on whether to operate as a sole trader, partnership, or limited company
• HMRC liaison: communicating with HMRC on your behalf if queries or investigations arise

What is the difference between a bookkeeper and an accountant?

A bookkeeper handles day-to-day financial record keeping. An accountant provides higher-level strategic advice, tax planning, and compliance services. Many small businesses benefit from using both.

Bookkeepers focus on recording transactions, reconciling bank statements, managing invoices, and keeping your financial records organised. They make sure the numbers are accurate on a daily or weekly basis. You can learn more about hiring a bookkeeper to understand when this kind of support makes sense.

Accountants typically hold professional qualifications such as Associate Chartered Accountant (ACA), ACCA, or Association of Accounting Technicians (AAT). They interpret your financial data and prepare statutory accounts. They also file tax returns and advise on business structure and tax efficiency.

Here's a simple way to think about it:

• Bookkeeper: records and organises your financial transactions day to day
• Accountant: analyses your finances, ensures compliance, and advises on strategy
• Qualifications: bookkeepers may hold AAT or ICB qualifications; accountants are usually chartered or certified
• When you need both: as your business grows, a bookkeeper keeps records current while your accountant focuses on planning and compliance

If your business is small and straightforward, you may only need a bookkeeper at first. Once your finances become more complex, or you're dealing with VAT registration, payroll, or growth plans, an accountant becomes essential.

Choose a certified or chartered accountant

Choosing a certified or chartered accountant gives you confidence that your adviser meets rigorous professional standards. Members of recognised bodies must follow codes of ethics, hold professional indemnity insurance, and complete ongoing training.

Anyone in the UK can call themselves an accountant, so qualifications matter. A chartered accountant has passed demanding exams and gained supervised work experience. Look for designations such as ACA or FCA (from ICAEW), or ACCA or FCCA.

Membership of a professional body also means you have a clear route to raise complaints if something goes wrong. That protection is valuable and gives you peace of mind.

UK professional accounting bodies

Several professional bodies regulate accountants in the UK. Here are the main ones to look for:

• ICAEW: the Institute of Chartered Accountants in England and Wales, one of the largest and longest-established bodies. You can find a chartered accountant through ICAEW.
• ACCA: the Association of Chartered Certified Accountants, a global body with a strong UK presence. You can find an ACCA accountant through their directory.
• CIMA: the Chartered Institute of Management Accountants, focused on management accounting and business strategy
• AAT: the Association of Accounting Technicians, offering practical accounting qualifications often held by bookkeepers and junior accountants
• ICAS: the Institute of Chartered Accountants of Scotland, the world's oldest professional body of accountants

Look for an accountant with relevant expertise

The best accountant for your business is one who understands your industry and the specific challenges you face. A specialist will already know the tax rules, allowances, and compliance requirements that apply to your sector.

For instance, a construction business has different VAT and subcontractor rules than an online retailer. An accountant who works with businesses like yours spots risks and opportunities faster. They're also less likely to miss sector-specific deadlines.

Ask potential accountants about their client base. Do they work with other businesses of your size and type? Can they provide references? Experience with small business accounting in your sector is a strong indicator of a good fit.

Does location matter?

Location used to be one of the first things to consider, but cloud accounting software has changed this. You can now work with an accountant based anywhere in the UK, as long as you're both using compatible tools.

That said, there are situations where a local accountant adds value. If you prefer face-to-face meetings, or your business has location-specific tax considerations, proximity can be helpful. For most small businesses, though, the quality of the relationship and the accountant's expertise matter more than their postcode.

How to find accountant candidates

You can find accountant candidates through professional body directories, personal recommendations, and online advisor networks. Starting your search in more than one place helps you compare options and find the right fit.

Ask other business owners in your network who they use and whether they'd recommend them. Word-of-mouth referrals are often the most reliable starting point.

Professional body websites, such as ICAEW and ACCA, have searchable directories that let you filter by location and specialism. You can also browse the Xero advisor directory to find accountants who are experienced with cloud accounting.

Get someone who's proactive about saving you money

A good accountant doesn't just process your numbers after the fact. They take the initiative and suggest ways to reduce your tax bill, claim all available reliefs, and structure your finances more efficiently.

During your initial conversations, pay attention to whether the accountant asks questions about your business goals. A proactive adviser will want to understand where you're headed so they can plan ahead, not just react.

Look for someone who:

• Reviews your tax position regularly: not just at year end, but throughout the year
• Flags upcoming changes: such as MTD deadlines or changes to tax thresholds
• Suggests efficiencies: for example, advising on the most tax-efficient way to pay yourself
• Communicates clearly: explains things in plain English without unnecessary jargon

Find out what software the accountant uses

Your accountant's choice of software affects how smoothly you'll work together. Cloud-based tools allow you to share financial data in real time, which means fewer emails, faster responses, and fewer errors.

Ask whether they use cloud accounting software and whether they're experienced with your platform. If your accountant works with Xero Accounting Software, for example, they can access your books at any time. They can collaborate on reports and keep everything aligned without waiting for spreadsheets.

Using the same platform also makes the transition smoother if you ever need to switch accountants. Your data stays in one place, and handover is straightforward.

When is it a good idea to hire an accountant?

It's a good idea to hire an accountant when your financial situation becomes too complex or time-consuming to manage confidently on your own. Certain milestones and life events make professional support especially valuable.

Here are some common scenarios where hiring an accountant makes sense:

• Filing your Self Assessment: if you're self-employed or have multiple income sources, an accountant ensures your Self Assessment tax return is accurate and submitted on time
• Registering for VAT: once your turnover approaches the VAT threshold, an accountant can help you register, choose the right VAT scheme, and file returns correctly
• Starting or growing a business: an accountant advises on business structure, cash flow, and funding applications
• Buying property or investing: rental income and capital gains have specific tax rules that benefit from professional advice
• Preparing for MTD: Making Tax Digital for VAT is already in effect, and MTD for Income Tax is being phased in. An accountant can help you set up compliant digital records
• Seeking funding: lenders and investors often want professionally prepared financial statements

If you're a sole trader managing your own accounting, an accountant can still add value by reviewing your records, advising on expenses, and handling your annual return.

Decide how the accounting work will be divided

Agreeing upfront on who does what avoids confusion and keeps your finances running smoothly. Some business owners prefer to handle day-to-day bookkeeping themselves and use an accountant for year-end accounts and tax. Others hand everything over.

Think about how much time you're willing to spend on financial admin. If you enjoy keeping your books up to date using cloud software, your accountant can focus on review, compliance, and strategic advice. If you'd rather not touch the numbers at all, look for an accountant who offers a full-service package.

Whatever you decide, put the agreed split of responsibilities in writing. This prevents misunderstandings and ensures nothing falls through the gaps.

Interview several candidates before you decide

Meeting at least three accountants before making your choice gives you a solid basis for comparison. You'll get a feel for their communication style, expertise, and whether they're genuinely interested in your business.

Most accountants offer a free initial consultation. Use this time to assess not just their qualifications, but how well they listen and whether they explain things clearly.

Questions to ask when interviewing an accountant

Prepare a list of questions so you can compare candidates fairly. Here are some useful ones to ask:

• What experience do you have with businesses like mine? Look for specific examples, not vague claims.
• Which professional body are you a member of? Confirm their qualifications and registration.
• How do you charge? Ask whether fees are fixed, hourly, or based on turnover. Get a clear estimate in writing.
• What software do you use? Make sure their tools are compatible with yours.
• How often will you be in touch? Understand how proactive they'll be.
• Can you provide references? A confident accountant will be happy to share client testimonials.
• How do you stay current with tax law changes? Ongoing training is a sign of a dedicated professional.

Understanding fees and pricing

UK accountant fees vary depending on the complexity of your finances and the services you need. Knowing the typical ranges helps you budget and compare quotes fairly.

As a rough guide, based on industry data:

• Basic Self Assessment tax return: £220 to £330
• Sole trader annual accounts and tax return: £500 or more
• Small business annual accounts, tax, and ongoing support: £500 to £2,500 or more per year

Fees depend on your business structure, transaction volume, payroll needs, and VAT requirements. Always ask for a detailed breakdown so you understand what's included.

Some accountants charge a fixed monthly fee that covers a defined set of services. Others bill by the hour. A fixed fee can make budgeting easier, but check what happens if your needs change mid-year.

Service levels and communication expectations

Before you commit, clarify what level of service you'll receive and how communication will work. This helps set expectations on both sides.

Ask how quickly they respond to emails or calls, whether you'll have a dedicated contact, and how they handle urgent queries. A good accountant is responsive and keeps you informed without you having to chase.

Agree on a schedule for regular catch-ups, whether quarterly or monthly, so you're always up to date on your financial position. This is especially valuable during periods of growth or change.

Do background checks

Before you appoint an accountant, verify their credentials independently. Check their membership with the relevant professional body, confirm they hold professional indemnity insurance, and look for online reviews or testimonials.

Professional body websites let you search for members and verify their status. This takes only a few minutes and confirms that your chosen accountant is qualified and in good standing.

It's also worth trusting your instincts about personal fit. You'll share sensitive financial information with this person, so feeling comfortable and confident in the relationship matters. If something feels off during your conversations, it's fine to look elsewhere.

What to do after appointing your accountant

Once you've chosen your accountant, there are a few practical steps to get the working relationship started on the right footing.

Your accountant should issue an engagement letter. This sets out the services they'll provide, the fees, and both parties' responsibilities. Read it carefully and raise any questions before you sign. The Consultative Committee of Accountancy Bodies (CCAB) recommends all accountant-client relationships begin with a written engagement letter.

You'll also need to complete an HMRC 64-8 form. This authorises your accountant to deal with HMRC on your behalf, which speeds up communication and means your accountant can handle queries directly.

To help your accountant get up to speed, provide:

• Your previous tax returns and accounts: so they can see your financial history
• Bank statements and bookkeeping records: so they have a clear picture of your current position
• Details of any ongoing HMRC correspondence: so nothing gets missed
• Information about upcoming changes: such as new staff, contracts, or planned investments

Keep your accountant informed whenever something significant changes in your business. The more they know, the better they can advise you. Review the relationship at least once a year to make sure you're still getting the service and value you need.

What to do if things go wrong

If you're unhappy with your accountant's service, start by raising the issue with them directly. Many problems come down to miscommunication and can be resolved with an honest conversation.

If that doesn't resolve things, you can make a formal complaint to the accountant's professional body. ICAEW, ACCA, and other bodies all have complaints procedures designed to investigate concerns about their members' conduct.

Switching accountants is straightforward. Your new accountant will contact your previous one to arrange the handover of records. Professional rules require your old accountant to cooperate with this process. Make sure any outstanding fees are settled and that you receive all your original documents back.

Organisations like TaxAid can also offer guidance if you're in a difficult situation and need free support.

Simplify your finances with Xero

Choosing the right accountant is one of the best decisions you can make for your business. Pairing them with the right software makes the relationship even more productive.

Xero Accounting Software gives you and your accountant a shared view of your finances in real time. You can track income and expenses, reconcile bank transactions, and generate reports, all from one platform.

Ready to see how it works? Get one month free and discover how Xero can help you and your accountant work better together.

FAQs on choosing an accountant

Here are answers to some of the most common questions about finding and working with an accountant in the UK.

How much does an accountant cost in the UK?

Costs depend on the services you need. A basic Self Assessment return typically costs £220 to £330, while full annual accounting support for a small business ranges from £500 to £2,500 or more per year.

How do you know you have a good accountant?

A good accountant communicates clearly, responds promptly, and proactively suggests ways to save you money. They should be a member of a recognised professional body and hold professional indemnity insurance.

Can I switch accountants if I'm not happy?

Yes. Your new accountant will contact your current one to arrange the transfer of records. Professional body rules require your outgoing accountant to cooperate with the handover.

Do I need an accountant if I use accounting software like Xero?

Accounting software handles much of the day-to-day financial admin, but an accountant adds value through tax planning, compliance, and strategic advice that software alone can't provide.

When is it a good idea to hire an accountant?

Consider hiring an accountant when you register for VAT, start a business, seek funding, or need to prepare for Making Tax Digital.

Disclaimer: Xero does not provide accounting, tax, business, or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisers for advice directly relating to your business or before taking action in relation to any of the content provided.