Becoming a freelance accountant in the UK: a step-by-step guide

Freelance accountants are always in demand in the UK. Do you already have accountancy experience but want to work for yourself? Or are you thinking of retraining? If so, becoming a freelance accountant could be for you.

Starting out can be daunting. To help make the process as easy as possible, we’ve got some tips on how to become a freelance accountant below.

Freelance accounting – what will I do?

Freelance accountants generally work with small businesses – those who can’t yet afford to bring in full-time accountancy employees. They provide tailored services to each of their clients, including producing annual accounts, looking after VAT returns, and managing payroll.

Often, freelance accountants also deal with HMRC on their clients’ behalf. This could be as simple as filing accounts, but in worst case scenarios it could also mean the accountant will have to attend visits from HMRC, if a client is the subject of an investigation.

But freelance accountants must also look after their own businesses. This means handling the legal side of running a business, getting insurance, finding clients, and much more.

Should I become a freelance bookkeeper?

Many accountants are also bookkeepers. Bookkeeping involves keeping records of financial activity, for example through adding payments and receipts, as well as income. These records are then used to prepare the accounts.

Many smaller businesses choose to do their own books to keep costs down, but others use a bookkeeper. When you become a freelance accountant, you should consider whether or not you’ll also offer bookkeeping services. It can be a good way to boost your income, but remember that it’s also time-consuming.

What’s the average freelance accounting salary?

The average salary for accountants working as employees in the UK varies significantly depending on experience. Those a couple of years into their career can expect to earn around £56,000, while accountants with over five years’ experience can earn as much as £100,000.

However, as a freelance accountant in the UK you’ll set your own rates. It’s important to research average accountant rates, and set yours accordingly. For small businesses operating as a limited company, with just a couple of employees, a full accountancy service generally costs anywhere between around £100 and around £350 per month. The exact figure depends on factors like whether payroll is required (and the number of employees), and the complexity of the accounts. For larger businesses, the figure is obviously higher.

You should also note that most accountants charge on top for additional services such as completing directors’ tax returns. Alternatively, some businesses wish only to pay one-off fees for specific services – for example, they may engage a freelance accountant only to produce their year-end accounts, or to complete their VAT returns.

How to become a freelance accountant – step-by-step

So now you know what a freelance accountant does and how much they earn, are you ready to take the leap? Here’s our step-by-step guide to becoming a freelance accountant.

1. Get the right accountancy qualifications

If you’re not already practicing as an accountant, you’ll need to get qualified. There are two main professional bodies that offer qualifications in the UK:

  • The Association of Accounting Technicians (AAC) qualifications are the minimum required for any accountant in the UK. You can begin your AAC qualifications even if you don’t have a degree. Once you reach the level 4 stage of the AAC scheme you can become a professional member.
  • The Association of Chartered Certified Accountants (ACCA) qualifications allow you to practice as a qualified accountant, and give you the right to sign off organisations’ accounts. Once you’re ACCA qualified you’ll be able to offer the full suite of accountancy services.

2. Gain experience

Prospective clients will want to see that you have good experience as an accountant. There are accounting apprenticeships available, or you might even choose to volunteer in the finance department for an existing company before you’re qualified.

3. Find your niche

There are thousands of freelance accountants in the UK. What makes you different? Many accountants choose to specialise in a specific industry or sector – for example, some businesses in the creative industries like to use accountants who have a specialism in that area. Your niche or specialism may come from existing experience that you have, or you might base it on a need you’ve identified in your local area.

4. Sort the legal side

As with any business, there are some legalities you need to get sorted before you begin. If you’re working freelance then you’ll probably operate as a sole trader, but you might also consider setting up a limited company. Read about the differences between sole traders and limited companies.

You’ll have to register as self-employed with HMRC, and you’ll need to file a Self Assessment tax return and pay any tax due by the relevant UK tax deadlines.

5. Make sure you’re insured

Insurance is crucial for any business, and it’s no different for freelance accountants.

  • Insurance is especially important if you’re giving advice. In these cases, you should consider professional indemnity insurance, which can protect you in the event that you give incorrect advice that leads to a client’s financial loss.

  • You should also consider public liability insurance, which can cover you against claims arising from loss or injury suffered by a member of the public as a result of your work.

  • If you have your own business premises, you should also think about buildings insurance.

6. Find your first clients!

Now that you’re all set up, it’s time to find some clients. Marketing is key as a freelance accountant, and there are several ways you can tackle it.

First, make sure you have a great website set up, giving some information about who you are and what makes you different. You can do this very easily using our list of the best tools for building a business website.

You should also think about getting listed in local business directories, or advertising in publications related to a trade or industry you’re specialising in. Google Ads and other pay-per-click tools are another great way of targeting potential clients based on keywords relevant to the services or specialisms you’re offering.

Of course, clients want to make absolutely sure that they can trust their accountant, so personal recommendations are hugely important. So, once you have some clients, make it as easy and tempting as possible for them or other people in your network to recommend your services, for example by offering a referral fee.

How are you getting on setting up as a freelance accountant? Let us know in the comments below.

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