If you’re a sole trader in the UK, figuring out your accounting setup can feel unnecessarily complicated.
Should you pay an accountant every year?
Use software?
Or combine both?
In this guide, we’ll go through:
An accounting package is simply a tool or service (or both) that helps you:
Most packages today are either:
As a sole trader, you pay tax on your profit (not revenue).
| Income band | Tax rate |
|---|---|
| £0 – £12,570 | 0% |
| £12,571 – £50,270 | 20% |
| £50,271 – £125,140 | 40% |
| £125,140+ | 45% |
👉 Official source: https://www.gov.uk/income-tax-rates
You’ll also need to submit a Self Assessment tax return:
👉 https://www.gov.uk/self-assessment-tax-returns
From 2026, HMRC is changing how sole traders report income.
Instead of one yearly return, you will:
👉 Official HMRC guide: https://www.gov.uk/guidance/using-making-tax-digital-for-income-tax
This is why your accounting setup matters more than ever.
Here’s what UK accountants actually charge right now:
| Service | Typical price |
|---|---|
| Self-assessment tax return | £200 – £299 |
| Monthly bookkeeping | £0 – £150 (most common) |
| VAT return (quarterly) | £75 – £124 |
| Tax advice (annual) | £500 – £999 |
👉 Based on:
Key takeaway:
Prices are rising — and most firms are moving toward monthly packages instead of one-off fees.
| Pros | Cons |
|---|---|
| Cheapest option | You do everything yourself |
| Full control | Easy to make mistakes |
| Good for simple businesses | No support |
Best for:
| Pros | Cons |
|---|---|
| Automation + help | Slightly higher cost |
| Less risk of errors | Still some involvement needed |
| MTD-ready |
Best for:
💡 This is where most of the market is heading.
| Pros | Cons |
|---|---|
| Almost zero effort | Most expensive |
| Everything handled | Less control |
| Expert oversight |
Best for:
With MTD coming, your setup should include:
If it doesn’t include these, it’s already outdated.
There’s been a big shift in the UK:
| Old way | New way |
|---|---|
| Once-a-year tax return | Monthly bookkeeping |
| Manual records | Automated tracking |
| Big tax surprises | Real-time visibility |
Most accountants now:
| Pricing model | What it means |
|---|---|
| Fixed monthly | Same cost every month, predictable |
| Hourly | Pay based on time spent |
💡 The industry is moving strongly toward fixed pricing, because it’s clearer for both sides.
Keep it simple:
The UK accounting market is clearly moving toward:
And importantly:
👉 One-off yearly accounting is slowly disappearing.
Accounting for sole traders is no longer just about “filing taxes once a year”.
It’s about:
The best accounting package is simply the one that: