If you run a UK business, you have likely searched for an accounting and bookkeeping service at some point. The search results all say the same things. "We save you time." "We keep you compliant." "We handle your numbers."

Those statements are true. But they are also vague. You need to know what you are actually paying for before you sign up.

This article explains exactly what a professional accounting and bookkeeping service delivers for a UK limited company, a sole trader, a partnership or a contractor. No fluff. No generalisations. Just the specific work that gets done, the deadlines that get met, and the decisions that get supported.

What a Genuine Accounting and Bookkeeping Service Covers

The phrase "accounting and bookkeeping service" covers two distinct functions that work together. Bookkeeping is the day to day recording of transactions. Accounting is the analysis, reporting and strategic advice built on those records.

A good service provider does both. Here is what that looks like in practice.

Transaction Recording and Bank Reconciliation

Every sale, every purchase, every payment to a supplier and every receipt from a customer needs to be recorded in the right place. A bookkeeper matches each transaction against your bank statement, usually through software like Xero, FreeAgent or QuickBooks.

This process is called bank reconciliation. It catches errors, identifies missing invoices and flags unexpected payments. If a supplier charges you twice, the reconciliation picks it up. If a customer pays late, the aged receivables report shows it.

A professional service reconciles your accounts weekly or monthly, depending on transaction volume. A sole trader with 30 transactions a month might do monthly. A limited company turning over £420,000 with 200 transactions a month needs weekly.

VAT Returns and Making Tax Digital Compliance

If your business is VAT registered, your accounting and bookkeeping service prepares and files your VAT return. This is not just copying numbers from your software into the HMRC portal. It involves checking which transactions are exempt, which are zero rated and which fall under the flat rate scheme if you use it.

From April 2026, Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) becomes mandatory for self employed people and landlords with qualifying income over £50,000. From April 2027, it drops to £30,000. Your service provider should already be moving clients onto compatible software and testing digital links between records and returns.

For limited companies, MTD for corporation tax is coming. The timeline is not finalised, but the direction is clear. Digital record keeping is no longer optional.

Payroll and RTI Submissions

If you employ anyone, including yourself as a director, the payroll needs to run correctly. A professional accounting and bookkeeping service handles the following:

  • Calculating gross pay, tax and National Insurance for each employee
  • Running the Real Time Information (RTI) submission to HMRC on or before payday
  • Calculating employer NI at 13.8% on earnings above the secondary threshold (£9,100 for 2025/26)
  • Claiming Employment Allowance (up to £10,500) where eligible
  • Issuing P60s at year end and P45s for leavers
  • Filing P11D and P11D(b) for benefits in kind

A common mistake we see is directors paying themselves a salary of £12,570 but not running it through proper payroll software. HMRC expects RTI submissions. A good bookkeeper ensures this happens every month without fail.

Corporation Tax Computation and Filing

For limited companies, the corporation tax return (CT600) is due 12 months after the year end. The tax itself is due 9 months and 1 day after the year end. A professional accounting service calculates the correct tax liability, applies the right rate (19% for profits up to £50,000, 25% for profits above £250,000, with marginal relief in between), and files the return.

This is where bookkeeping quality matters most. If your bookkeeping is messy, the corporation tax computation takes longer and costs more. Clean records mean a straightforward CT600 that gets filed on time.

Accountants Bookkeeping Services vs DIY Software

Many business owners start with DIY bookkeeping. They buy Xero or QuickBooks, watch a few tutorials and manage the data entry themselves. That works for a few months. Then the VAT return gets complicated. Or the director's loan account goes overdrawn. Or HMRC sends a compliance check letter.

The difference between DIY and professional accountants bookkeeping services is not just speed. It is judgement. A bookkeeper knows that a director's loan balance of £12,000 at year end triggers a benefit in kind and a P11D. They know that a sole trader buying a van through the business needs capital allowances calculated correctly. They know that a partnership needs a capital account and a current account for each partner, not just a single profit figure.

Software does not know these things. People do.

Year End Accounts and Filing Obligations

Every limited company must file annual accounts at Companies House and a corporation tax return at HMRC. The two sets of documents are similar but not identical. Companies House accounts are prepared under FRS 102 or FRS 105 (for micro entities). The CT600 uses those accounts as a starting point but adds tax adjustments.

A professional accounting and bookkeeping service prepares both sets. They also file the confirmation statement every 12 months and keep the company's statutory registers up to date. If you miss the filing deadline, Companies House charges a late filing penalty starting at £150 for a private company one month late, rising to £1,500 for six months late.

For sole traders and partnerships, the year end is simpler but still requires a self assessment return (SA100 for individuals, SA800 for partnerships). A bookkeeping service that also handles accounting will prepare the annual accounts and the tax return together, ensuring consistency between the two.

Bookkeeping and Accounting Service for Contractors

Contractors working through a limited company have specific needs. Their bookkeeping and accounting service must track dividends, director's salary and retained profits carefully. The dividend allowance for 2025/26 is £500. Dividend tax rates are 8.75% for basic rate, 33.75% for higher rate and 39.35% for additional rate.

A contractor in Manchester taking £50,000 of profit as dividends needs to know exactly how much tax they owe. The bookkeeper tracks the dividend vouchers, the accountant calculates the tax, and the contractor pays it through their self assessment.

Contractors also face IR35. If your contract falls inside IR35, your accounting and bookkeeping service needs to handle deemed employment income, not just dividends and salary. This changes the entire tax calculation. A good provider flags IR35 risks before you sign the contract, not after.

Management Accounts and Cash Flow Forecasting

Beyond compliance, a proper accounting and bookkeeping service provides management information. This means monthly or quarterly reports showing your gross margin, operating margin, cash position and debtor days.

A cafe in Birmingham with a gross margin of 62% needs to know if that margin drops to 58% in a month. The reason might be a supplier price rise, wastage or incorrect pricing. Management accounts identify the issue. Cash flow forecasting shows whether you can afford the VAT payment due next quarter.

We prepare management accounts for clients who want them. Not every business needs monthly reports. But every business benefits from knowing its numbers before HMRC asks.

What to Look for in a Provider

Not all accounting and bookkeeping services are the same. Here are the specific things to check before you appoint one.

  • Qualification. Are they ICAEW, ACCA or AAT qualified? Holloway Davies are ICAEW qualified. That matters because chartered accountants follow a code of ethics and maintain professional indemnity insurance.
  • Software. Do they use Xero, FreeAgent, QuickBooks or Sage? Ask which one they recommend for your business type. A provider that only works in one platform may not be the best fit if you prefer another.
  • Communication. How do you contact them? Email only? Phone? A dedicated portal? A good provider responds within 24 hours during working days.
  • Scope. Does the fee cover VAT returns, payroll, year end accounts and corporation tax? Or is each one a separate charge? Get the full scope in writing.
  • Deadlines. Do they file on time? Ask about their process for ensuring nothing is missed. A provider that files your CT600 on 31 January every year is better than one who files it on the due date but forgets the payment deadline.

How Much Does an Accounting and Bookkeeping Service Cost?

Pricing varies widely. A sole trader with simple affairs might pay £100 to £200 per month for a full service including bookkeeping, VAT and self assessment. A limited company with payroll, VAT and 50 transactions per month might pay £250 to £500 per month. A larger business with multiple employees, stock and complex VAT might pay £750 to £1,500 per month.

These are typical ranges for 2025/26. The key is to compare like with like. A cheap service that excludes VAT returns or year end accounts is not cheap when you add those on separately.

For a detailed breakdown of what we charge and what is included, see our services page.

When to Switch Providers

You might already have an accounting and bookkeeping service but feel you are not getting enough value. Signs it is time to switch include:

  • You regularly chase them for information or deadlines
  • Your year end accounts are filed late or with errors
  • They do not offer advice, only data entry
  • You have outgrown their capacity (for example, you now need MTD compliant software and they still use spreadsheets)
  • They do not answer questions about tax planning, only compliance

If any of these apply, speak to us. We are based in the UK and work with businesses across every sector. Contact us for a no obligation chat about your current setup.

What You Should Do Next

If you are starting a new business, get the accounting and bookkeeping service in place from day one. It is much easier to set up clean records at the start than to fix messy ones later. If you are already trading, review your current service against the list above. Are you getting everything you need?

Your next step depends on your situation:

  • If your turnover is approaching £90,000, you need to register for VAT. A bookkeeper handles the VAT1 form and the ongoing returns.
  • If you are a limited company director and have not filed a CT600 yet, your deadline is 12 months after your year end. Check the date now.
  • If you are a sole trader and your profit exceeded £50,000 in the last tax year, you need to prepare for MTD for ITSA from April 2026.
  • If you employ staff and are not using RTI compliant payroll software, fix that this week.

Every business is different. But every business benefits from a professional accounting and bookkeeping service that does the work properly, files on time and gives you the numbers you need to make decisions. That is what we do at Holloway Davies. Find out more about our team.