Do startups need an accountant? It’s one of the most common questions I hear from new business owners, and the honest answer is: it depends on your setup, but most get it wrong by waiting too long.

What Accounting Does a New Business Actually Have to Do?

The legal requirements depend on how your business is set up. If you’re a sole trader, you need to keep records of your income and expenses and file a Self Assessment tax return with HMRC each year. If you’ve set up a limited company, there’s more to it: annual accounts, a corporation tax return, a confirmation statement, and payroll if you’re paying yourself a salary.

One thing that trips a lot of founders up is Making Tax Digital. From April 2026, sole traders and landlords with qualifying income of £50,000 or more are required to use MTD-compatible software and submit quarterly updates to HMRC rather than one annual return. If that applies to you, it changes how you need to keep records from day one. Getting that wrong early on creates a lot of unnecessary work to unpick later.

Bookkeeping vs Accounting: What’s the Difference and Do You Need Both?

Bookkeeping is the day-to-day recording of what money comes in and goes out. Think invoices raised, bills paid, bank statements matched up. Accounting is what you do with that information: producing financial reports, working out your tax position, making sure you’re filing the right returns at the right time. You need both, but they don’t have to be done by the same person.

A lot of new business owners try to do their own bookkeeping using spreadsheets or a bit of software and then bring in an accountant at year end. That can work if your books are tidy. The problem is that by the time year end arrives, months of transactions are sitting in a mess, and sorting it out costs more than keeping things clean throughout the year would have. If you’d like to see how I help startups get this right from the beginning, take a look at my startup accounting page.

When Should a New Business Bring in an Accountant?

The honest answer is: earlier than most people do. I’ve seen founders come to me six months before their first year end with bank statements going back to launch day and no records in between. That’s fixable, but it costs time and money that could have been avoided. The moment you have any income, any expenses, or any employees, your tax position starts to form. Getting that wrong is far more expensive than getting it right.

There are a few specific triggers where I’d say it’s non-negotiable. If you’re setting up a limited company, you need someone who knows what they’re doing from the start: PAYE, corporation tax, director’s salary versus dividends. If you’re taking on investors, you’ll need proper financial records before anyone will look at you seriously. And if your business involves any kind of tech or product development, it’s worth asking whether you could qualify for R&D tax relief from HMRC, which only limited companies can claim and which can reduce your corporation tax bill significantly.

What Does Startup Accounting Actually Cost?

This is the question everyone wants to ask but feels awkward about. The honest answer is that it varies by what you need, but it doesn’t have to be expensive. Startup costs across all categories are a real concern for new businesses, and I get that spending on accounting feels like it should wait until there’s more money coming in. The problem is that the cost of getting it wrong, whether that’s a missed tax deadline, a penalty from HMRC, or months of records that have to be rebuilt from scratch, is usually much higher than the cost of doing it right.

At STZ Accounting, I offer a Sole Trader Package from £150 per month plus VAT, covering bookkeeping, bank reconciliation, VAT returns, annual accounts, and your Self Assessment. For limited companies, packages start from £215 per month. Those are fixed prices, so you know exactly what you’re paying before you commit. There are no surprise invoices, and you’ll always deal with me directly, not a junior or a call handler.