You’ve decided you want help with your Self Assessment. Now you’re staring at three options that all sound vaguely similar — use software, use an online service, or hire an accountant — and nobody has clearly explained the difference.

The confusion is understandable because the lines are blurring. Some accountants include software in their fee. Some software companies offer “expert review” add-ons that look like a service. And online services employ accountants. So what are you actually choosing between?

Here’s the honest breakdown, organised by what each option does and doesn’t do — not by marketing labels.

The Three Options, Plainly

Option 1: Accounting Software (you do the work)

You use a tool like FreeAgent, Xero, QuickBooks, or a spreadsheet bridging tool to track income and expenses through the year. When it’s time to file by the Self Assessment deadline, the software generates the numbers and you submit the return to HMRC yourself (or the software submits it for you, if it’s MTD-compatible).

  • Cost: £10–£40/month, or free if you use FreeAgent with a qualifying business bank account. See our cheapest MTD software guide for all free options.
  • What you do: Everything. You categorise transactions, identify deductible expenses, enter the numbers, and file. The software is a tool — it doesn’t make tax decisions for you.
  • What you don’t get: Advice. If you’re unsure whether something is an allowable expense, the software won’t tell you. If you’re deciding between the trading allowance and actual expenses, you make the call.
  • Best for: People with simple, consistent income and expenses who want to track records digitally and are confident about the rules. Also the mandatory choice if you’re above the MTD £50,000 threshold from April 2026 — you need MTD-compatible software to submit quarterly updates regardless.

Option 2: Online Tax Return Service (someone files it, no ongoing advice)

You upload your documents or connect your bank account to a platform like TaxScouts, Untied, or 1TapTax. An accountant employed by the platform prepares your return, you review it, and the service files it with HMRC.

  • Cost: £100–£300 per return, depending on complexity. See our full comparison of tax return services.
  • What you do: Provide the raw information — bank statements, receipts, P60s, details of income sources. You don’t prepare the return, but you do need to gather and submit accurate records.
  • What you get: A qualified accountant reviews your information, calculates your tax, and files the return. You get the peace of mind that a professional checked the numbers.
  • What you don’t get: Ongoing advice. The relationship ends when the return is filed. If you have a tax question in March, there’s no one to call. If you need help deciding whether to incorporate or how to handle payments on account, the service won’t advise you.
  • Best for: People whose returns are too complex to feel comfortable DIYing (2+ income sources, property income, some reliefs) but not complex enough to justify a £500+ accountant or ongoing retainer.

Option 3: Traditional Accountant (full service with advice)

You hire a qualified accountant — either a local firm or an online practice — who handles your tax affairs, provides advice throughout the year, and can represent you with HMRC if needed.

  • Cost: £150–£500 for a one-off sole trader Self Assessment. £50–£250/month for ongoing service (bookkeeping, annual return, advice, and for limited companies: accounts, Corporation Tax, payroll).
  • What you do: Provide records and answer questions. The accountant does the rest, including advising on tax planning, reliefs, and structure decisions.
  • What you get: A relationship. Someone who knows your finances, who you can call with questions, who can respond to HMRC on your behalf, and who can file multiple years if you’re behind. For limited companies, this is the only option that covers the full scope (Corporation Tax, director payroll, dividends, Companies House filings).
  • What you don’t get: Cheapness. This is the most expensive option, and for simple returns it’s overkill.
  • Best for: Limited company directors, people with multiple income streams or complex reliefs, anyone behind on multiple years, and anyone who wants ongoing tax advice rather than just a filed return.

Side-by-Side Comparison

Software Online service Traditional accountant
Cost £120–£480/year (or free) £100–£300 per return £150–£500 one-off, or £50–£250/month
Who files the return You Their accountant Your accountant
Ongoing advice No No Yes
Handles limited company Partially (you still need an accountant for CT600) Usually no Yes
Handles multiple years / late filing No Limited Yes
HMRC representation No No Yes
MTD quarterly updates Yes (if MTD-compatible) Varies Yes (if they use MTD software)
Time you spend High (you do everything) Medium (gather documents) Low (provide records, answer questions)
Risk of errors You carry it Lower (professional review) Lowest (professional + ongoing relationship)

How to Decide in 60 Seconds

Choose software if:

  • Your return is one income source with basic expenses or the trading allowance
  • You’re confident about what you can and can’t claim
  • You want to track records digitally year-round (which you’ll need for MTD anyway)
  • Your turnover is under £50,000 and your situation is stable

Start with our cloud accounting guide to choose a tool, or our cheapest MTD software guide if budget is the priority.

Choose an online service if:

  • You have 2+ income sources and don’t trust yourself to get the allocation right
  • You want someone else to file but don’t need ongoing advice
  • Your return is moderately complex but not limited-company-level
  • You’re filing for the current year and you’re not behind on multiple years

See our comparison of tax return services to pick one.

Choose a traditional accountant if:

Read our should I hire an accountant guide for the full decision framework.

The Hybrid Option Most People Ignore

You don’t have to pick just one. The most cost-effective setup for many sole traders is:

  1. Use accounting software (FreeAgent, Xero, or a free option) to track income and expenses through the year. This keeps your records clean and MTD-ready.
  2. Use an online service or accountant at filing time to prepare and submit the return. Because your records are already organised in the software, the accountant’s time (and your fee) is lower.

This gives you the year-round record-keeping of software with the error-checking of a professional, at a lower total cost than a full monthly retainer. Many accountants will even reduce their fee if you hand them clean software records instead of a shoebox of receipts.

The Cost of Getting It Wrong

The cheapest option isn’t always the cheapest option. Here’s what’s at stake:

  • Missed reliefs: If you’re a higher-rate taxpayer not claiming pension tax relief at the higher rate, you’re losing 20% of your pension contributions in unclaimed relief. On a £10,000 pension contribution, that’s £2,000 — more than any accountant’s fee.
  • Wrong expense method: Choosing actual expenses when the trading allowance would save you more (or vice versa) can cost hundreds. The right choice depends on your actual expense ratio, which changes year to year.
  • Late filing penalties: A missed deadline starts at £100 and escalates to £1,600+ for 6+ months late. An accountant who files on time costs less than a single penalty.
  • MTD non-compliance: From April 2026, if you’re above the £50,000 threshold and not using MTD-compatible software for quarterly updates, you’ll face penalty points from 2027/28.

The point isn’t to scare you into hiring an accountant. It’s that “free” DIY filing has a hidden cost when you get something wrong — and that cost is often higher than the fee you were trying to avoid.

Ready to Talk to an Accountant?

If you’ve worked through the options and decided a traditional accountant is the right fit — or you’re still unsure and want to talk through your situation — we can match you with one.

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