Accountants for Limited Companies


Starting and running a limited company comes with many responsibilities, including managing finances and keeping accurate records. This can be a challenging and time-consuming task, even for experienced business owners. That’s where the expertise of a professional accountant can come in handy. At Mercian Accountants, we understand the unique needs of limited companies and can help provide the support and guidance needed to ensure that your finances are in order and that you are meeting all of your obligations to HMRC. In this article, we will explore the benefits of working with an accountant for your limited company and what to consider when choosing the right professional for your business.

Do Limited Companies Need Accountants?

Limited companies are separate legal entities from their owners and must keep accurate financial records. As a result, many limited companies choose to employ an accountant to help with their financial management. However, whether a limited company needs an accountant depends on the size and complexity of the business.

Advantages of Hiring an Accountant

  • Professional Advice: Accountants are trained professionals who have a deep understanding of tax laws and regulations. They can provide valuable advice on how to reduce tax liabilities, maintain financial records, and maximize profits.
  • Compliance: An accountant can help ensure that a limited company complies with all relevant tax laws and regulations, minimizing the risk of fines and penalties.
  • Time-saving: Maintaining financial records and preparing tax returns can be time-consuming, especially for growing companies. An accountant can relieve some of the burden, allowing business owners to focus on running the company.
  • Improved Accuracy: Accountants have the necessary skills and experience to maintain accurate financial records and prepare accurate tax returns, reducing the risk of errors.

Disadvantages of Hiring an Accountant

  • Cost: Hiring an accountant can be expensive, particularly for small businesses. The cost of accountancy fees can be a significant burden, especially for limited companies with tight budgets.
  • Limited Knowledge: While accountants are trained professionals, they may not have a deep understanding of a company’s specific needs and goals. Business owners may need to provide additional information or clarification to ensure that the accountant provides accurate advice.

Limited companies that require complex tax planning or have a large number of transactions may benefit from hiring an accountant. However, small limited companies with straightforward finances may be able to manage their own finances and prepare their own tax returns.

Ultimately, the decision on whether a limited company needs an accountant will depend on the specific needs and goals of the business. It is important for limited companies to consider the advantages and disadvantages of hiring an accountant and to make an informed decision based on their own circumstances.

How much do Accountants charge for a Limited Company?

The cost of an accountant for a limited company will vary depending on the size and complexity of the business, as well as the services required. On average, an accountant for a small limited company can charge anywhere from £600 to £2,500 per year. This fee can be lower for small businesses with basic accounting needs, while larger companies with more complex financials will generally pay more.

Some accountants also offer package deals that include a set of services, such as bookkeeping, tax preparation, and management accounting, at a fixed annual price. In these cases, the cost of the package will depend on the specific services included and the size of the company.

Ultimately, the cost of an accountant for a limited company will depend on the individual business’s needs and budget, as well as the fees charged by the accountant.

What do Accountants do for Limited Companies?

Limited companies typically require more complex financial management than sole traders or partnerships, as they are separate legal entities from their owners. As a result, the services provided by accountants for limited companies are often more comprehensive, and typically include:

  1. Bookkeeping: Recording financial transactions and maintaining accurate financial records is a crucial part of running a limited company. An accountant can ensure that the company’s books are in order and that all relevant information is captured.
  2. Tax Planning and Preparation: An accountant can assist with tax planning and help to minimize the company’s tax liability through legal means. They can also prepare and file the company’s tax returns with HM Revenue & Customs (HMRC).
  3. Financial Statements Preparation: An accountant can prepare financial statements, such as balance sheets and profit and loss accounts, to provide a clear picture of the company’s financial position.
  4. Compliance: An accountant can ensure that the company complies with all relevant regulations and legislation, such as Companies House and HMRC reporting requirements.
  5. Business Advice: An accountant can provide valuable advice on a range of business issues, from cash flow management to tax planning and beyond.
  6. Payroll Services: An accountant can assist with payroll administration and provide support with issues such as calculating employee salaries, handling payroll tax, and making pension contributions.

In summary, accountants play a vital role in helping limited companies to manage their finances and grow their businesses. By providing a range of essential services, they can help companies to reduce costs, minimize risks, and maximize profits.

How do I find a Good UK Accountant for my Limited Company?

Finding a good UK accountant for your limited company is important as they will play a crucial role in the financial success of your business. Here are a few steps you can follow to find the right accountant for your limited company:

  1. Determine your needs: Before you start looking for an accountant, it’s important to determine what specific accounting services you require. Do you need help with bookkeeping, tax planning, or financial statements? Knowing what you need will help you narrow down your search.
  2. Ask for recommendations: Word of mouth is one of the best ways to find a good accountant. Ask friends, family members, or other business owners for recommendations.
  3. Research: Once you have a list of potential accountants, research each one thoroughly. Check their websites, read reviews, and look at the services they offer. Make sure the accountant you choose has experience working with limited companies.
  4. Schedule consultations: Schedule consultations with a few potential accountants to see who you feel most comfortable with. During the consultation, ask about their experience, services, and fees. This is also an opportunity to see if their personality and communication style align with yours.
  5. Consider cost: Finally, consider the cost of each accountant’s services. Don’t just choose the cheapest option, as a good accountant is worth the investment. However, make sure you have a clear understanding of the accountant’s fees and services so you can make an informed decision.

Remember, the right accountant will be more than just a numbers person. They will also provide valuable financial advice and be a trusted business advisor. By following these steps, you can find a good UK accountant who will help your limited company thrive.

Can I do my LTD Company Accounts myself?

Yes, as a limited company director, you have the option of handling your own bookkeeping and accounting duties or hiring an accountant to do it for you. If you have the necessary skills, knowledge, and experience in bookkeeping, tax laws, and accounting, you can save money by doing it yourself.

However, keep in mind that preparing accurate financial records and tax returns can be time-consuming and complex, especially if you are unfamiliar with the rules and regulations. Additionally, if you make mistakes, it can result in penalties and fines from HMRC.

It is important to weigh the costs and benefits of doing it yourself or hiring an accountant. Hiring an accountant can provide peace of mind and ensure that your finances are in good hands, while also freeing up time for you to focus on running your business. On the other hand, doing it yourself can save you money on accounting fees.

Ultimately, the choice depends on your own skills, experience, and resources. It is always a good idea to consult with an accountant to determine the best course of action for your specific situation.

Can I submit my own Company Accounts to HMRC?

Yes, you can submit your own accounts to HMRC, but it is recommended to seek professional help. Accountants have a thorough understanding of the tax laws and can ensure that your accounts are accurate and submitted on time.

Is it worth hiring an Accountant for a Small Company?

Yes, it is worth hiring an accountant for a small business. Accountants can provide valuable support in managing the finances, reducing tax liabilities, and maximizing profits. They can also provide advice on growth strategies and help you make informed decisions.

What happens if a Company does not have an Accountant?

If a business does not have an accountant, it risks making errors in its financial operations, and this can lead to penalties and fines. Additionally, the business may miss out on opportunities to reduce tax liabilities and maximize profits.

How much Tax should I pay as LTD Company?

The amount of tax a limited company must pay depends on its profits and the corporation tax rate set by the government. A limited company must pay corporation tax on its taxable profits, which are calculated after deducting allowable expenses and capital allowances from its total income. In the UK, the corporation tax rate for the tax year 2022/23 is 19%. From April 1, 2023, the corporation tax rate for large companies is set to increase to 25%. It’s important for limited companies to keep accurate financial records and seek professional advice from an accountant to ensure they are paying the correct amount of tax.

What expenses can I put through my Limited Company?

As a limited company, you can claim expenses that are considered necessary for running your business. These expenses should be reasonable and not for personal use. Some common expenses that can be put through a limited company include:

  1. Rent or lease payments for business premises
  2. Utilities, such as electricity and gas bills
  3. Employee salaries and benefits
  4. Travel expenses for business trips
  5. Training and development expenses
  6. Office supplies and equipment
  7. Advertising and marketing costs
  8. Insurance costs
  9. Professional fees, such as accountants or solicitors

It is important to keep detailed records of all expenses and to have receipts or invoices to support the expenses. HMRC may request to see these records if they conduct an investigation, so it is important to keep them for at least 6 years.

Helpful Accountants for Limited Companies

Limited companies have many unique financial requirements, and the support of an experienced accountant can help to navigate these complexities. From tax planning to bookkeeping and annual accounts, a good accountant can provide valuable guidance and help ensure that your company is always operating in a compliant and efficient manner. At Mercian Accountants, we understand the challenges facing limited companies, and our team of highly skilled professionals are dedicated to helping you achieve your business goals. With our extensive knowledge of tax laws, financial regulations and accounting practices, we can help you make the most of your business finances and reach new heights of success. Get in touch with us today to learn how we can help your limited company.