How to Start a Bookkeeping Business in the UK [2025 Guide]

Every business needs clean books, yet few want to manage them in-house. That’s created a steady, quiet demand for reliable bookkeepers, especially among the UK’s 5.5 million small businesses.

The industry’s not just growing – it’s shifting. Cloud accounting has made it easier to work remotely, and more companies are outsourcing their day-to-day finance tasks.

This isn’t a flashy startup idea. It’s a practical, low-overhead service that businesses actually need. 

If you’re methodical, detail-driven, and want something you can start from home, bookkeeping is one of the most straightforward ways to build a service-based business right now.

Understanding the market

The UK market for bookkeeping is robust. The latest data show that SMEs dominate this industry with small and micro-businesses (with fewer than 50 employees) make up almost the entire market.

For example, in 2024, there were about 5.5 million private-sector businesses in the UK, approximately 99% are small (and nearly 74% are one-person firms).

Many of these businesses prefer to outsource bookkeeping rather than hire an in-house accountant. 

In fact, recent reports indicate that about 37% of UK small businesses already outsource their accounting tasks.

Key customer segments include:

Why is bookkeeping in demand?

These clients face common problems: they often find bookkeeping time-consuming or confusing. 

For instance, HMRC research shows nearly half of microbusiness owners worry they’ve made mistakes in their tax returns, and 35% say their first tax return was very difficult.

Many don’t know which expenses are deductible or how to claim them. 

A professional bookkeeper solves these issues by ensuring accurate records, avoiding fines, and giving business owners confidence. 

And, as the Institute of Certified Bookkeepers notes, all UK businesses “are required by law to ‘keep books’”, and good bookkeeping helps businesses plan and grow.

Legal requirements & company setup

Before taking on clients, choose and register your business structure. In the UK you must register your activity with HMRC (and Companies House if you form a company) before trading

The main options are:

💡Pro tip: ANNA can handle company setup for you. With ANNA’s company registration service, you can register a Limited Company (free of charge) and open a business account simultaneously. 

The whole process takes minutes online, and you receive your Certificate of Incorporation quickly. 

ANNA also offers support with ongoing filings like Confirmation Statements and accounts submissions.

Regulations to follow 

Regardless of structure, you must obey certain regulations:

1. Money Laundering (AML) Compliance

Bookkeepers are classified as Accountancy Service Providers under UK anti-money laundering laws. This means even sole traders must register for AML supervision. You can join a professional body (like the ICB, IAB or AAT) which provides AML supervision, or you can register directly with HMRC. You will need to verify client identities, keep AML policies on file, and report suspicious activity.

2. Data Protection (GDPR)

You’ll handle sensitive financial data, so you must comply with GDPR. This includes keeping client data secure and registering with the ICO if required. Also, use strong passwords, encryption, and secure systems.

3. Insurance

Professional indemnity insurance is essentially mandatory. If you make an accounting error that costs a client money, PI insurance protects you. 

Larger clients often demand proof of PI cover before hiring you. You should also consider public liability insurance if you visit clients, and employers’ liability insurance once you hire anyone.

Other compliance: 

Costs & finances

Startup costs

Bookkeeping is relatively low-cost to start, but there are essentials you’ll need to invest in. Most people spend between £2,000 - £15,000 depending on how advanced or professional their setup is.

Typical startup items include:

⚡Hardware

⚡ Software

You’ll need cloud accounting tools such as Xero, QuickBooks, FreeAgent, or Sage.

➤ Plan for around £40 – £200/month in subscription costs, which may include:

✅ If you use ANNA for your business account, it includes a smart receipt scanner – just snap a photo of a business purchase, and it’s automatically matched to the right transaction, categorised, and used to calculate your taxes.

⚡ Branding & website

Basic website and logo: £500 – £2,000+

Domain name: around £10 – £20/year

Ongoing costs

Once you're operating, you’ll have a few predictable monthly expenses:

💡 If you’re working from home, you won’t have to pay rent, but it’s worth keeping records of household use for tax deductions.

Pricing & revenue

Bookkeeping fees vary depending on experience, niche, and how you price:

When calculating your rates, don’t forget to account for:

Bookkeeping often has profit margins of 30 – 50%+ because you’re selling time and skill, not inventory. Just avoid the trap of undercharging, as low rates can burn you out quickly.

Funding & support

If you need a little capital to get started, you’ve got options in the UK:

Start Up Loans (British Business Bank)

➤ Borrow up to £25,000 at 6% fixed interest

➤ Includes mentoring and a 12-month repayment holiday

Local grants and loans

➤ Check your Local Enterprise Partnership (LEP) or council for small business support

Free training & business help

➤ Try:

Client acquisition strategy

Getting your first bookkeeping clients is all about visibility and trust. Start locally: tell friends, family, and former colleagues that you’re offering bookkeeping services. Then, go through the following:

Networking & referrals

Online presence

Social & content marketing

While Instagram and Facebook can work for some, focus on where your clients are: LinkedIn and local Facebook business groups are often best. 

Platforms & directories

Build trust

Always present professionally – have a tidy workspace, use a dedicated phone line or business email, and respond to inquiries promptly. 

Operations & capabilities

Running a bookkeeping service involves daily organisation and discipline. 

What skills do you need?

You’ll need strong numeracy and familiarity with accounting principles. Helpful skills include Excel proficiency, attention to detail, good communication, and basic IT literacy. 

No formal qualifications are legally required to be a bookkeeper, but earning credentials (AAT bookkeeping certificates or membership in ICB/IAB) will boost your credibility with clients. 

These bodies also offer guidance and AML licenses. 

Comfort with accounting software is essential: expect to use cloud tools like Xero, QuickBooks, Sage, or FreeAgent as your ledger.

Daily tasks

A typical day may involve reconciling clients’ bank statements, entering invoices, chasing unpaid bills, and updating accounts. 

Many bookkeepers batch tasks by schedule: 

Time management is key. When starting out, plan to be available during normal business hours and to allocate ~20-30 client hours per week. Use to-do lists or simple project management tools to track deadlines (e.g. VAT due dates, payroll runs, tax return deadlines).

Going solo vs hiring

Most start solo to keep costs low. Early on you can handle several small clients alone. As you grow, you might subcontract tasks (like data entry) to freelancers or hire a part-time bookkeeper. 

Before hiring, ensure you have the admin processes down (client onboarding, payroll if needed, management oversight).

Tools, systems & automations

Equipping your business with the right tools and systems will make it efficient and professional. Key tools include:

When you integrate a business account with invoicing and using cloud tools, you’ll spend less time on admin and have more time for clients. 

ANNA, for instance, ties together business banking, invoicing, and bookkeeping in one app, so you get automatic expense tagging and tax calculations without double entry. Ultimately, the right mix of software and streamlined processes will let you handle more clients as you grow.

Example: Business plan snapshot

Here’s a hypothetical one-year launch plan to guide you:

Final tips & common mistakes

Even with everything in place, your day-to-day choices make the difference. Here are quick pointers:

Ready to start? Register your business today

Starting a bookkeeping business can be straightforward when you have the right setup. With ANNA, you get everything needed in one place:

Take the leap and register with ANNA today to make your bookkeeping business launch smooth and stress-free. Focus on clients and let ANNA handle the paperwork and banking!