Small Business Accountants for Limited Companies and Sole Traders
Most small business accountants tell you what already happened. Your accounts arrive nine months after the year end, long after the decisions that could have saved you money. Merit works the other way round. We are accountants for small business owners: limited companies, sole traders and partnerships, and a Chartered Tax Adviser reviews your position first. So what should a limited company accountant actually do for the fee you pay?
We act for owner-managed businesses from around £50,000 of turnover upwards: limited companies, sole traders, partnerships, and directors with rental income alongside the business.
James Sheard FCA, one of our partners, has a particular interest in family businesses and the self-employed. You can see what this has saved clients in our owner-managed business tax case studies.
What does a small business accountant actually do for you?
Our small business accounting services run in two rhythms. Through the year keeps you compliant. Year to year is where the planning happens.
Through the year: bookkeeping (ours, or a review of yours), quarterly VAT returns under Making Tax Digital, monthly payroll and RTI, pensions, and management accounts showing profit and tax while the year is still running.
Year to year:
- Year-end accounts filed at Companies House.
- Corporation Tax computation and CT600.
- Confirmation Statement and statutory registers.
- P11Ds, and Self Assessment tax returns for the directors.
- Unlimited advice by phone and email, not billed in six-minute units.
Tip
Ask one question before you sign: who reviews my personal tax position against the company’s? If nobody does, you are buying filing, not advice.
Do I need an accountant for my limited company?
Legally, no. A director can file everything personally. Most owners use limited company accountants because the question is whether you can afford the mistakes.
File accounts a day late and Companies House charges £150. More than six months late is £1,500, doubled if you were late the year before. Those are the cheap errors. The expensive ones are quiet: nobody tells you that taking your money out the wrong way cost you £4,669 this year.
Company accounts and Corporation Tax: what is due, and when?
The annual cycle, using a 31 March 2026 year end as the example.
| What is due | Deadline | Example |
|---|---|---|
| Annual accounts to Companies House | 9 months after year end | 31 December 2026 |
| First accounts after incorporation | 21 months after you registered | Formed 10 June 2025: 10 March 2027 |
| Corporation Tax payment | 9 months and 1 day after year end | 1 January 2027 |
| Company Tax Return (CT600) | 12 months after year end | 31 March 2027 |
| Confirmation Statement | Every 12 months, within 14 days of the review period ending | Set by your incorporation date |
| VAT return and payment | 1 month and 7 days after each quarter | Quarter to 31 December 2026: 7 February 2027 |
| Payroll RTI Full Payment Submission | On or before every payday | PAYE and NIC due by the 22nd after the tax month ends on the 5th (paid electronically) |
| P11D for benefits in kind | 6 July after the tax year ends | 2026/27: 6 July 2027. From April 2027 most benefits must be payrolled instead. |
| Director’s Self Assessment return and balancing payment | 31 January after the tax year ends, with payments on account on 31 January and 31 July | 2026/27: return and balance by 31 January 2028; payments on account due 31 January 2027 and 31 July 2027 |
Note
Corporation Tax is payable three months before the return that calculates it. That catches new directors every year, so we give you the number early.
Companies House will not accept a Confirmation Statement until every director has verified their identity. Our guide to the Companies House identity verification deadline explains what existing directors need to do and when.
What should you pay for a small business accountant?
We publish no price list, because the same words describe very different amounts of work. Our guide to how much an accountant costs sets out typical market ranges. Five things move the number:
- Transaction volume. Forty bank lines a month and four hundred are not the same job.
- VAT registered or not. VAT adds four filings a year plus the review behind each.
- Payroll headcount. Pensions, benefits in kind and leavers each add work on top.
- Number of entities. Two trading companies and a holding company mean three sets of accounts, and the associated companies rules cut each company’s Corporation Tax limits.
- Quality of records. A clean cloud ledger costs less than a carrier bag of receipts.
As fixed-fee accountants we quote in advance, in writing, after seeing your last accounts and your bookkeeping. The fee does not move because you rang us.
A cheap headline price buys compliance only. Questions become chargeable extras, bookkeeping corrections arrive as a year-end invoice, and nobody reviews how you take profit out. The example below is worth £4,669 to one director in one year.
Warning
When a quote is far cheaper than the rest, ask what is excluded, not what is included. That is where next year’s invoices come from.
How did April 2026 change your salary and dividends?
Dividend rates rose on 6 April 2026: basic rate from 8.75% to 10.75%, higher rate from 33.75% to 35.75%. The additional rate stayed at 39.35% and the dividend allowance at £500.
For a sole director without the Employment Allowance, a small salary plus dividends still wins; with the allowance, a higher salary can come out ahead. The gap narrowed, so getting the split right is worth more. Our guide to salary vs dividends in 2026/27 works through both cases.
Example
Illustrative, 2026/27. Sole-director company, £60,000 of profit before the director’s pay, no other employees, so no Employment Allowance.
| How you pay yourself | Tax and NIC paid | You keep |
|---|---|---|
| Salary £12,570 plus dividends of £37,498 | £13,909 (employer NIC £1,136, Corporation Tax £8,796, dividend tax £3,977) | £46,091 |
| Salary £50,270 plus dividends of £2,380 | £18,578 (employer NIC £6,791, Corporation Tax £559, income tax £7,540, employee NIC £3,016, dividend tax £672) | £41,422 |
Identical profit, £4,669 difference. The April 2026 rise cost this director about £740 more in dividend tax than in 2025/26.
Tip
A £12,570 salary beats a £5,000 salary here by roughly £800, and protects a qualifying year on your National Insurance record. Employer NIC at 15% starts at £5,000, and a sole director with no other staff cannot claim the £10,500 Employment Allowance.
Add a second shareholder, a spouse on the payroll or an employer pension contribution and the answer moves again. That is the review a Chartered Tax Adviser runs each year.
One relief that often gets missed. The £6 a week homeworking allowance is £312 a year, and most directors stop there. Your company cannot deduct a share of your household costs directly, because those costs are yours. A licence agreement between you and the company gets to the same place. The company pays a licence fee set at the costs properly attributable to the room in use and deducts it in full. You declare the fee and deduct the same costs against it, so there is nothing to pay personally. Where the attributable share of council tax, utilities, insurance and repairs comes to £1,800, that turns £312 into £1,800 of company deduction. Mortgage interest stays out of the calculation, because it only attracts basic rate relief on a property business and would leave you with tax to pay. And the room should not be used exclusively for business, which would restrict private residence relief when you sell and can trigger business rates.
How much Corporation Tax will your company pay?
19% up to £50,000 of profit. 25% above £250,000. Between the two, marginal relief taxes the middle band at an effective marginal rate of 26.5%, so each extra £1,000 of profit there costs £265.
The trap for owner-managers: the £50,000 and £250,000 limits are divided by one plus the number of associated companies, so with one associated company each company’s limits are £25,000 and £125,000.
Example
Illustrative. A company with £60,000 of profit pays £12,150 of Corporation Tax, an effective 20.25%. Add one associated company and the limits halve to £25,000 and £125,000. The same profit now costs £14,025, or 23.4%. Once company two carries on any trade or business, even letting a single property, this company pays £1,875 more. A company that does nothing at all is ignored (CTA 2010 s18E(3)).
Warning
Splitting a trade across two companies to stay under a threshold usually costs more than it saves. For Corporation Tax the associated companies rules halve each company’s limits, and for VAT HMRC can treat an artificial split as one business. Have the associated companies test checked before you set up a second company.
Does Making Tax Digital for Income Tax affect you?
It is already live. From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records and send quarterly updates, due 7 August, 7 November, 7 February and 7 May. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028. Our Making Tax Digital accountants can set up the software and file the quarterly updates for you.
Qualifying income is gross turnover plus gross rents, before expenses. A director whose 2024/25 return showed £35,000 of rent and £20,000 of freelance income has £55,000 of qualifying income and is in from April 2026, even though their company is separate. Salary and dividends from the company do not count.
Warning
Late payment penalties are 3% of the tax unpaid at day 15, another 3% of the tax unpaid at day 30, then a further penalty at 10% a year, charged daily, on top of late payment interest. From 2027/28 the two 3% charges become 4%. On £20,000 left unpaid for a month that is £1,200. Missed quarterly updates attract no penalty points for 2026/27. In your first year under the new regime you have 30 days before the first penalty applies. You only get that once.
What changes as you grow?
Three illustrative examples, not real clients.
Example
Illustrative. First-year contractor company. One director, £96,000 turnover, VAT registered, no staff. Quarterly VAT, a one-person payroll, first accounts 21 months after incorporation, and often two Corporation Tax returns, because a first period over 12 months must be split.
Example
Illustrative. Growing business crossing the VAT threshold. Turnover moving through £90,000, mainly to consumers. Register within 30 days of the end of the month you cross it. Absorb the VAT instead of raising prices and £110,000 of standard-rated sales carries £18,333 of output VAT, less whatever VAT you can reclaim on your costs. For a business selling mainly to consumers, most of that comes out of your margin.
Example
Illustrative. Established company weighing a second entity. £1.2 million turnover, eight employees, £180,000 of profit. Monthly management accounts, payroll with pensions and P11Ds, a reliable tax forecast; at this size many owners move to a complete outsourced finance function. Model the associated companies effect before company two exists, not after.
If you are raising investment or claiming R&D relief, see our page for accountants for tech startups.
How do you switch accountants?
Switching accountants takes very little of your time, because we do the chasing. We request authorisation from HMRC, write to your previous accountant for professional clearance and your records, and review the last two years for anything missed. Our guide on how to change accountants sets out each step.
Why do small business owners choose Merit?
- Chartered Tax Adviser-led. We are a firm of Chartered Certified Accountants and Chartered Tax Advisers, and the CTA is the highest tax qualification in the UK. For a small business that matters more than it does for a large one, because a large company has a finance director asking the tax questions and you do not. In most cases, the tax we save our clients exceeds the fee they pay.
- Worked inside HMRC. Our team includes professionals who have worked inside HMRC, so we know how enquiries start and where HMRC officers push.
- Commercial partners. Our partners have built their own businesses from nothing to over £1m in turnover.
- Fixed fees, no hourly rates. Questions during the year are included, because charging for phone calls stops clients ringing, and clients who do not ring are the ones who get caught out.
- Your software. We are a Xero Platinum partner and work with QuickBooks, Sage and FreeAgent too, so you keep the software you know.
- Second review. Every VAT return and set of accounts we prepare is reviewed by a second tax specialist before it is filed.
- Three offices. Manchester, London and Hertfordshire, with a free first meeting.
Accountants for small business in Manchester, London and Hertfordshire
We have three offices. Our London office is at 16 Upper Woburn Place, London WC1H 0AF (020 4534 7857). Our Manchester office is at Phoenix House, 2 Huddersfield Road, Stalybridge, SK15 2QA (0161 303 0610). Our Hertfordshire office is at Suite H, 230 High Street, Potters Bar, EN6 5BL (020 4635 9882). Most small business clients work with us online, but you can meet the person who looks after your accounts, in person or by video.
See our pages for accountants in Manchester, accountants in London and accountants in Hertfordshire.
Questions small business owners ask us
Are you an online accountant, or do I have to come into an office?
Both work. We run everything digitally, as any good online accountant for small business should: cloud bookkeeping, electronic signatures and video calls. Unlike a purely online firm, we have three offices you can sit in and a named person who knows your business.
What is included in your monthly accountancy packages?
Typically bookkeeping services, VAT returns, payroll, year-end accounts, the Corporation Tax return, your Confirmation Statement and directors’ personal tax returns, spread over twelve payments. Management accounts and advisory work are added where needed. Scope is set out in your engagement letter, so you see what you are buying.
Do you work with sole traders as well as limited companies?
Yes. As accountants for sole traders and partnerships we handle accounts and Self Assessment, and for sole traders we file the Making Tax Digital quarterly updates. Partnerships are not yet in Making Tax Digital for Income Tax; HMRC has not set a start date. We will also tell you honestly whether incorporating is worth it. At lower profits the saving is often too small to justify the extra filing and admin.
My bookkeeping is a mess. Will you still take me on?
Yes, and tell us before we quote rather than after. Poor records are the biggest cause of fee surprises at other firms. We price the catch-up work separately and once, then move you onto a clean monthly process so the backlog cannot rebuild.
How long does switching accountants take, and will HMRC mind?
Usually two to four weeks, and there is no penalty for changing agent. You do not need to wait for a year end or a filing deadline. We request professional clearance, register as your agent with HMRC and check the opening figures. The usual hold-up is an unpaid bill.
What happens if HMRC opens an enquiry into my company?
We handle it through our HMRC tax investigations service: the correspondence, the information requests and any meeting. You get a realistic view of the exposure early rather than after the event. Having professionals who have worked inside HMRC read the opening letter changes how an enquiry runs.
Do you charge extra for phone calls and emails?
No. Unlimited advice sits inside the fixed fee, for a simple reason: accountants who bill by the minute teach clients to stop asking. The conversations that save money happen before you buy the van or set up the second company.
When do I need management accounts, not just year-end accounts?
Once you have staff, stock or a lender, or once profits are large enough that Corporation Tax planning matters. Year-end accounts tell you what your tax bill already is. Management accounts tell you what it will be while you can still change it.
Is it worth getting an accountant for a small business?
Usually. The compliance work alone takes time most owners do not have, and the planning on salary, dividends, pension contributions and capital allowances is worth doing before the year end, not after it.
How do I find an accountant for my small business?
Look for a firm of Chartered Certified Accountants and Chartered Tax Advisers with experience of businesses your size, a fixed fee agreed in writing, and a named person who will look at your tax position as well as your filing deadlines. Ask who reviews your work before it is filed.
Ready to find out what your position is really costing you?
Bring your last accounts, your bookkeeping and a rough idea of how you take money out. In one meeting we will tell you what we see in your last returns, whether the way you take profit out is costing you money, and what a fixed fee for the whole job would be.
No charge, no obligation, no jargon.
Last reviewed: October 2026.
What clients say about Merit on Google
“They flag things before we’ve even thought to ask, which is something we’ve never experienced with an accountant before.”
Farz B., Google review
“They quickly understand complex matters, explain them in straightforward terms and provide practical, commercially sound solutions tailored to our needs.”
Zyba K., Google review
“Every year they are prompt and responsive, even reminding us when our filings and VAT reports are due.”
DanRaw Stores, Google review
“They are a highly professional, knowledgeable team and a true pleasure to work with.”
Liana T., Google review
“The team go above and beyond to deliver the best service and are always striving to find ways to improve the business position.”
Vardan F., Google review