Can I do my own end of year account?

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The short answer is: Yes, you absolutely can! If you are self-employed in the UK (a sole trader), there is no legal rule that says you must hire an accountant. You are completely free to add up your own end-of-year accounts and submit your own Self Assessment tax return directly to HMRC.

Many self-employed people in the UK choose to manage their own taxes to save money. If your business is fairly straightforward, doing it yourself is very doable. Here is a simple guide to help you decide if it is the right choice for you.

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What are End of Year Accounts?

For a sole trader, your “end of year accounts” are basically just two main things:

1. Your Income: All the money your business made during the tax year (which runs from 6 April to 5 April the following year).
2. Your Expenses: All the money you spent to run your business (like tools, stock, or travel).

When you take your expenses away from your income, you are left with your profit. This profit is the number HMRC cares about, because this is what you pay tax on.

Why Do It Yourself?

• It saves money: Accountants can charge anywhere from £150 to over £500 to do a basic tax return. Doing it yourself keeps that money in your pocket.
• HMRC makes it easy: The online Self Assessment form on the GOV.UK website is designed for everyday people to use. It asks you simple questions and does all the complicated maths for you.
• You understand your business better: Looking at your own numbers forces you to see exactly where your money is coming from and where it is going.

How to Do It Yourself

If you want to tackle your own accounts, you just need to follow a few simple steps:

1. Keep good records: This is the most important part! Keep all your receipts, invoices, and bank statements safe throughout the year.
2. Keep a simple list: You do not need fancy software. A simple spreadsheet (like Excel or Google Sheets) or even a lined notebook is fine. Just write down what you earn and what you spend as you go.
3. Register for Self Assessment: If you haven’t already, you need to tell HMRC you are self-employed so they can give you a Unique Taxpayer Reference (UTR) number.
4. Fill in the form: Log into your HMRC online account, type in your total income and total expenses, and hit submit before the 31st of January deadline.

Top Tip: Make sure you only claim for “allowable expenses.” These are things you bought only for your business. You cannot claim for personal everyday costs.

When Should You Hire an Accountant?

While doing it yourself is great, there are times when paying a professional is worth the money:

• If you are really short on time: If doing your taxes takes you days of stressful work, your time might be better spent actually running your business.
• If you become a Limited Company: The rules for Limited Companies are much stricter and more complicated than for sole traders. Most Limited Companies use an accountant.
• If your business grows a lot: If you start making enough money that you need to register for VAT (currently £90,000 a year), things get a bit more complex.
• If you have multiple incomes: If you have income from renting out houses, a part-time job, and your business, an accountant can make sure you do not pay more tax than you need to.

Summary

Doing your own end-of-year accounts as a UK sole trader is totally legal, completely normal, and easier than you might think. As long as you keep your receipts organised and fill in your online form carefully, you can easily manage it yourself.

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