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:

• New entrepreneurs and sole traders: Busy freelancers or one-person startups who want help staying compliant.
• Small businesses (SMEs): Companies without a full-time finance team; especially service firms, local shops, and charities.
• Landlords and property businesses: Those who rent out property often need help tracking expenses and filing taxes.
• Startup companies: Companies that need accurate books to attract investment or loans.

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:

• Sole trader: Fast and simple to set up. You register as self-employed with HMRC. All profits go to you personally, but you are personally liable for any debts. You file an annual Self Assessment tax return.
• Partnership: If you start the business with someone else, a partnership lets you share profits and risks. Each partner files a tax return, and the partnership itself reports to HMRC.
• Limited Company: More paperwork initially, but offers limited liability protection. The company is a separate legal entity, so your personal assets are usually safer if things go wrong. Limited companies must register with Companies House and HMRC. They file annual accounts, a Corporation Tax return, and a confirmation statement each year. Many clients see a limited company as more professional, too.

💡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:

• Keep all client records and bookkeeping data (invoices, receipts, ledgers) for at least 6 years (as required by law)
• If you run payroll, register for PAYE with HMRC.
• If you register for VAT, you must use Making Tax Digital software (MTD) to file returns.
• Having standard contract terms that comply with consumer law (Consumer Rights Act 2015) is also wise when dealing with sole traders.

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

• A reliable business laptop or PC (with warranty), a printer/scanner, and a basic desk and chair. A widescreen monitor is strongly recommended – it improves multitasking and speeds up workflow.

⚡ 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:

• Office 365 or Google Workspace
• Receipt-scanning tools (e.g. Dext Prepare)
• Secure file storage or e-signature platforms

✅ 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:

• Software subscriptions (accounting, receipts, cloud storage)
• Business internet and phone
• Professional indemnity insurance – from £10–£20/month, depending on cover
• Marketing and advertising – budget 1–3% of turnover
• Transport (if visiting clients) – fuel, parking, or public transport
• Home office running costs – broadband, electricity, and minor equipment upkeep

💡 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:

• New bookkeepers: £20 – £25/hour
• Experienced specialists: £40 – £50+/hour
• Monthly retainers: £250 – £400+ per client

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

• Software and tools
• Insurance and admin time
• Travel (if needed)
• Taxes
• A fair profit margin

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:

• ICB (Institute of Certified Bookkeepers)
• Enterprise Nation
• GOV.UK business support

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

• Attend local business networking events, chamber of commerce meetings, or accountants’ breakfast clubs.
• Meet small business owners and let them know how you solve bookkeeping headaches.
• Ask initial clients for referrals and testimonials.
• Consider “targeted networking” – e.g. approach local accounting firms to sub-contract overflow, or partner with complementary professionals (tax advisors, payroll specialists).

Online presence

• Create a simple professional website that lists your services, prices (or at least starting rates), and contact info.
• Claim and optimise a Google My Business listing so you appear in local searches (e.g. “bookkeeper in [your town]”).
• SEO tactics (mention bookkeeping keywords on your site) help small businesses find you online.
• Use LinkedIn to connect with local businesses and engage in small-business groups.
• Post helpful content or tips on your website or social media to show expertise (e.g. “Top 5 bookkeeping mistakes to avoid”).

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.

• Share case studies (anonymised, of course) or before/after stories (e.g. “We helped a café save X hours a month by organising their receipts”).
• Create a simple newsletter or blog that covers bookkeeping topics – this builds credibility and improves Google ranking.

Platforms & directories

• Consider listing yourself on online platforms or directories for professionals. For example, Bark.com, PeoplePerHour, or local trade directories can lead to leads (though competition can be high).
• If you specialise in software (like Xero or QuickBooks), register as an official advisor on their websites. These portals enable businesses to find qualified bookkeepers by location or area of expertise.

Build trust

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

• Display any certifications (AAT, ICB logos) on your website.
• Early on, offer a low-cost or free initial consultation or trial period to win trust.
• As you work with more clients, collect their testimonials (with permission) and showcase them on your site and profile.
• High ratings and positive reviews are crucial; happy clients talking to other business owners is more persuasive than any ad.

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:

• Monthly routines (bank reconciliations, invoicing),
• Quarterly tasks (VAT returns), and
• Annual tasks (year-end reports, client reminders).

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:

• Accounting software: Popular choices are Xero, QuickBooks Online, Sage Business Cloud or FreeAgent. These handle ledgers, invoicing, and VAT returns. (Most have free trial periods for new businesses.) Each links to your bank account for auto-import of transactions. Choose one and learn it well.
• Business bank account: Use a dedicated business account (not a personal account) to keep finances separate. ANNA’s business account is designed for solo traders and offers automated bookkeeping features (receipt capture, categorisation, and tax pots to set aside funds for VAT and tax).
• Invoicing & payments: These accounting apps usually include invoicing. Enable online payment links (Stripe, GoCardless) so clients can pay by card or direct debit easily. Quick payment means better cash flow. Using QR-code invoicing (as ANNA supports) can also speed up in-person payments from clients.
• CRM & notes: Keep a simple client database. This can be a spreadsheet, Google Contacts, or a basic CRM (e.g. Hubspot CRM is free). Track client details, service agreements, and communication history.
• Document management: Use cloud storage (Dropbox, Google Drive, or ANNA’s receipts tool) to hold scanned invoices and receipts.
• Business processes: Create templates for common communications – engagement letters, quote proposals, thank-you emails. An e-signature tool (e.g. DocuSign or a free alternative) can speed up client onboarding. Use a calendar app (Google Calendar, etc.) to block time for bookkeeping tasks and reminders for HMRC deadlines.

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:

• Be professional and reliable: Always meet deadlines, communicate clearly, and dress/present yourself well when meeting clients (even virtually). Reliability earns repeat business and referrals.
• Price yourself correctly: It’s tempting to undercut competition, but too-low fees lead to unsustainable work. Calculate all your costs first (tools, tax, time) and charge rates that give you a healthy profit.
• Don’t skip insurance: Skimping on professional indemnity or liability cover can cost you dearly if something goes wrong. Make insurance a priority from day one.
• Keep finances separate: Use a dedicated business bank account (like ANNA) and debit card. Never mix personal and business transactions – this keeps taxes simple and reduces audit risk.
• Organise from the start: Set up a consistent filing system (even digital folders) and stick to it. As one common tale goes, neglecting bookkeeping for your own business is a rookie mistake. Stay on top of entries weekly.
• Use contracts: Always have a simple engagement letter or contract specifying your services and fees. This avoids disputes later.
• Avoid over-committing: Only take as many clients as you can handle well. Doing excellent work for a few clients is better than letting too many slip.

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:

• Free business registration: Set up your new company at no extra cost.
• Built-in support: ANNA helps with VAT, PAYE, Confirmation Statement and more as you grow.
• Fast & simple: Complete the process online in minutes. Optional virtual office address keeps your home address private.
• Trusted by UK businesses: Over 100,000 entrepreneurs use ANNA to run their finances and stay compliant. …and so much more!

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!