Do I Need an Accountant as a Sole Trader?
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No, you don’t legally need an accountant as a sole trader. You can prepare and lodge your own tax return and BAS. Whether you should do it yourself is a different question, especially once GST, a growing business or the time spent on your books starts to become a factor.
For many sole traders, DIY accounting makes perfect sense at first. It’s only as the business grows that getting some help starts to become worthwhile.
This article contains general information only and isn’t personal financial advice. Every business is different, so speak with a registered tax agent or accountant about your specific situation.
Key takeaways
- There’s no legal requirement for a sole trader to use an accountant — self-preparation and self-lodgment are both allowed.
- Complexity matters more than income level. GST registration, employees or multiple income streams tip the balance toward professional help sooner than raw turnover does.
- A registered tax agent operates under safe harbour protections that can reduce exposure to some administrative penalties, under the Tax Agent Services Act 2009.
- Time is a real cost, even when DIY accounting isn’t producing errors — hours spent reconciling and researching rules are hours not spent on the business itself.
- An accountant and a bookkeeper aren’t the same role, and a sole trader may need one, both, or neither depending on where they’re at.
- You can change approach at any point — starting DIY and moving to professional help later is common, not a sign of having done it wrong initially.
DIY vs an accountant, at a glance
- DIY tends to work when income and deductions are simple, GST isn’t yet registered, and you’re comfortable keeping up with reconciliation and ATO rule changes.
- An accountant tends to pay off once GST, employees, multiple income streams or growing time pressure make DIY accounting a genuine drag on the business itself.
- What doesn’t change either way: you’re still personally and legally responsible for the accuracy of what’s lodged under your name, whoever prepared it.
On this page
- The short answer
- What you’re responsible for either way
- Signs you can reasonably manage it yourself
- A quick DIY vs accountant test
- Signs it’s time to bring in an accountant
- What a registered tax agent actually adds
- Accountant vs bookkeeper for a sole trader
- What it costs
- A worked example
- Quick recap
- Getting help
The short answer
Sole traders can prepare and lodge their own income tax return and BAS without using a registered agent. Plenty do, particularly when the business is new and the finances are fairly simple.
Whether to use an accountant is really a practical decision: how much time are you spending on the books, how confident are you that you’re getting things right, and would that time be better spent elsewhere in the business?
What you’re responsible for either way
Whether you use an accountant or not, you’re still responsible for the information lodged under your name. Using a registered tax agent doesn’t make that responsibility disappear.
What you do get is someone who deals with tax and compliance every day, is subject to professional standards and ongoing obligations, and can help catch issues before they make their way into your return.
In other words, an accountant can take a lot of the work and uncertainty off your plate, but your tax affairs are still ultimately yours.
Signs you can reasonably manage it yourself
You may be perfectly comfortable handling things yourself if:
- Income comes from one or two simple, predictable sources
- You’re not yet registered for GST, or GST reporting is straightforward
- You have no employees
- You’re comfortable with basic accounting software and reconciling a bank feed
- Keeping the books up to date isn’t eating into time you’d rather spend elsewhere
There’s no hard rule here. Someone with a simple GST-registered business may be quite comfortable doing everything themselves, while another sole trader may choose to outsource from day one simply because they’d rather spend their time on client work.
A quick DIY vs accountant test
You probably don’t need an accountant yet if your income comes from a small number of straightforward sources, you aren’t dealing with GST or payroll, and you can keep your records up to date without it taking over your week.
It’s worth speaking to one if you answer yes to any of these:
- Your GST registration, BAS or tax treatment is making you unsure what to do
- You’re hiring your first employee or starting to pay several contractors
- You have business income alongside wages, investments or rental income
- You’re considering a company or another change in structure
- Bookkeeping is falling behind, or you can’t explain how your figures were calculated
This isn’t a test you pass once and never revisit. Your setup can stay DIY while things are simple, then change when the business becomes harder to keep on top of.
Signs it’s time to bring in an accountant
There’s rarely one moment when a sole trader suddenly needs an accountant. More often, a few extra layers of complexity creep in and DIY accounting gradually becomes harder to justify.
Some common turning points are:
- GST registration. Correctly coding taxable, GST-free and input-taxed transactions, and reconciling that against your BAS, is where DIY errors tend to concentrate.
- Taking on your first employee. Payroll, superannuation and PAYG withholding obligations add real compliance risk that a simple sole trader setup didn’t previously carry.
- Multiple income streams, especially where they interact — for example business income alongside other assessable income, which affects which tax bracket your combined income falls into.
- Considering a change in structure, such as moving to a company — this is exactly the kind of decision that benefits from advice before it’s acted on, not after.
- You genuinely don’t know if your figures are right. Uncertainty itself is a signal — if you’re not confident your deductions, GST treatment or record keeping are correct, that’s reason enough on its own.
- It’s taking too much of your time. You might be doing everything correctly and still decide it’s no longer worth doing yourself. A Saturday morning spent sorting transactions or checking tax rules is still a cost, even if no money leaves your bank account.
What a registered tax agent actually adds
Using a registered tax agent or BAS agent carries a specific benefit beyond general expertise. Under the safe harbour provisions in the Tax Administration Act 1953, taxpayers using a registered agent may not be liable for some administrative penalties the ATO could otherwise impose, provided they gave the agent accurate and complete information.
Registered agents must also meet ongoing professional and ethical standards set by the Tax Practitioners Board under the Tax Agent Services Act 2009. This gives you a different level of accountability from an unregistered adviser or a DIY approach.
That protection isn’t unconditional — it depends on the taxpayer holding up their end, providing complete and accurate information to the agent. It’s also worth confirming a practitioner’s registration on the TPB public register before engaging them, since the safe harbour benefit only applies to genuinely registered agents.
Accountant vs bookkeeper for a sole trader
| Factor | Bookkeeper | Accountant |
|---|---|---|
| Main focus | Day-to-day transaction recording, reconciliation, often BAS | Tax return preparation, tax planning, structure and financial advice |
| Registration | Often (not always) a registered BAS agent | Registered tax agent |
| Typical sole trader use | Ongoing bookkeeping through the year | Year-end tax return, or advice on structure and growth |
| Can they overlap? | Some bookkeepers offer light advisory support | Some accountants also manage bookkeeping directly |
A sole trader with simple, well-organised records might only need an accountant at tax time. One with more transaction volume, or who wants the day-to-day admin off their plate entirely, may benefit from a bookkeeper through the year as well. Our bookkeeper vs accountant guide covers the distinction between the two roles in more detail, including where CPA and CA-qualified accountants sit relative to bookkeepers.
What it costs
Fees vary depending on the practice, the complexity of your affairs and how much help you actually need. A straightforward annual tax return is a very different engagement from year-round bookkeeping, BAS preparation and business advice.
Rather than looking for one “average” price, ask what’s included in the fee and compare that with what you’re getting back: time saved, fewer things to worry about and greater confidence that the numbers are right. Our small business accountant cost guide covers the main factors that drive pricing.
For a sole trader, fees paid for managing tax affairs are also generally deductible.
A worked example
At that point, the accounting has become more complicated too. Sales now need the right GST treatment, BAS figures need reconciling, and the employee brings payroll, PAYG withholding, superannuation and Single Touch Payroll obligations. The designer may still handle day-to-day bookkeeping, but this is a sensible point to get an accountant or bookkeeper involved. The trigger isn’t simply that turnover is higher; it’s that the number of things to get right has increased.
Quick recap
- Using an accountant is optional, not a legal requirement, for a sole trader
- Look at what is making the books difficult, rather than relying on a turnover figure alone
- A registered tax agent offers safe harbour protection from some administrative penalties, provided you gave them accurate information
- A bookkeeper and an accountant serve different roles, and a sole trader may need one, both, or neither
- Fees vary by engagement — ask directly what’s included rather than assuming a standard cost
- You can start DIY and move to professional help later; it isn’t a permanent choice
Getting help
If you’re still on the fence, you don’t need to decide based on a turnover figure or a generic checklist. A short conversation about how your business actually operates — whether you’re registered for GST, how complicated your income is and how much time the books are taking — will usually give you a much clearer answer.
Our tax accountant and small business accounting services work with sole traders across Melbourne, from a single annual tax return through to ongoing bookkeeping and advisory support. Our sole trader accounting guide covers what the accounting itself involves if you’re still deciding what to tackle yourself.
Not sure whether you need an accountant yet?
We’ll talk through your situation and give you a straight answer, not a sales pitch.
Official resources
- Finding and using a tax practitioner — Tax Practitioners Board
- Business structures — key tax obligations — ATO
Frequently asked questions
Is it illegal for a sole trader to lodge their own tax return?
No. You can prepare and lodge your own tax return and BAS. Whether that's the best use of your time is another matter, particularly as the business becomes more complicated.
At what income level should a sole trader get an accountant?
There's no set income threshold — it depends more on the complexity of your affairs than the dollar figure. A sole trader with simple income and no GST registration can often manage comfortably at a much higher income than one juggling GST, multiple income sources and growing expense categories at a lower income.
Can I switch between doing my own books and using an accountant?
Yes, and plenty of sole traders do — starting DIY in year one, then bringing in a bookkeeper or accountant once GST registration, employees or simply time pressure make it worthwhile. There's no requirement to commit to one approach permanently.
Does using an accountant reduce my chance of an ATO audit or review?
Using an accountant isn't a guarantee against an ATO review, but good records and accurate reporting can reduce the chance of avoidable issues. A registered agent using a valid extension can also mean more time to prepare a complete return rather than rushing to meet the standard deadline.
What's the difference between a bookkeeper and an accountant for a sole trader?
Broadly, a bookkeeper manages the day-to-day recording of transactions, reconciliation and often BAS lodgment, while an accountant handles tax return preparation, tax planning and higher-level financial advice, and can review or set up the bookkeeping itself. Our bookkeeper vs accountant guide covers the distinction, and where the two roles overlap, in more detail.
Will an accountant just do my books, or can they also help me grow the business?
It depends on the accountant and the engagement, but many accountants working with sole traders also cover structure advice, cash flow visibility and general business advisory beyond just lodging the return. It's worth asking directly what's included before assuming a bare compliance-only service.
Is a registered BAS agent the same as an accountant?
No. A registered BAS agent can provide BAS services, but a registered tax agent's scope is broader and covers income tax return preparation as well. Some practitioners hold both registrations; it's worth checking exactly what a practitioner is registered to do before engaging them for tax return work specifically.
What should I bring to a first conversation with an accountant as a sole trader?
A general sense of your income and expense categories, whether you're registered for GST, any employees or contractors, and what specifically is prompting the conversation — whether that's a growing workload, an upcoming BAS, or general uncertainty about whether your figures are right. You don't need everything perfectly organised beforehand; sorting that out is often part of what the engagement covers.
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