Why Your Accountant Isn’t Enough: The Hidden HR Risks Every Microbusiness Faces

Your accountant is brilliant. They keep your books balanced, handle your tax returns, and probably saved you thousands in the last year alone. But here’s a question that might make you uncomfortable: when was the last time they advised you on employment law?

If you’re like most small business owners, you probably rely on your accountant for most of your compliance needs. After all, they’re the experts, right? While accountants are absolutely essential for financial compliance, there’s a whole world of employment law that sits outside their expertise – and it’s costing businesses like yours thousands every year.

The Great Compliance Divide

Let’s be clear: this isn’t about criticising accountants. They’re fantastic at what they do. But there’s a fundamental difference between financial compliance and employment law compliance and understanding this difference could save your business from serious legal trouble.

Financial Compliance covers:

• Tax obligations

• VAT requirements

• Company filings

• Financial reporting

• Payroll processing

Employment Law Compliance covers:

• Hiring procedures

• Employment contracts

• Disciplinary and grievance processes

• Holiday and sick pay calculations

• Discrimination and harassment prevention

• GDPR compliance for employee data

• Redundancy procedures

• Workplace policies

While there’s some overlap (like payroll), these are largely separate areas of law requiring different expertise.

Real-World Scenarios Where HR Issues Arise

Let me share some situations we see regularly that catch small business owners off guard:

Scenario 1: The Problematic Employee

Your star salesperson has started arriving late, missing meetings, and being rude to colleagues. Your accountant can tell you about the financial impact, but can they guide you through a fair disciplinary process that won’t result in an unfair dismissal claim?

Scenario 2: The Discrimination Complaint

An employee claims they’re being treated differently because of their age. This has nothing to do with your accounts, but everything to do with employment law. Do you know how to investigate properly and protect your business?

Scenario 3: The Data Breach

Someone accidentally emails customer data to the wrong person. Your accountant might handle the financial side, but do they know the GDPR notification requirements and potential fines you’re facing?

Scenario 4: The Maternity Leave Request

Your office manager is pregnant and asking about her rights. This involves complex calculations for statutory pay, understanding return-to-work rights, and managing temporary cover. It’s not a numbers problem – it’s an HR challenge.

The Hidden Costs of HR Gaps

When businesses rely solely on accountants for all compliance needs, they often miss critical HR risks:

Employment Tribunal Claims: The average award for unfair dismissal is £15,000, with some cases reaching six figures. Most accountants aren’t trained to help you avoid these pitfalls.

Discrimination Claims: These can be even more expensive, with unlimited compensation awards and serious reputational damage.

GDPR Fines: The ICO can fine businesses up to £17.5 million or 4% of annual turnover for data protection breaches.

Lost Productivity: Poor HR practices lead to higher staff turnover, lower morale, and reduced productivity – costs that don’t show up immediately but seriously impact your bottom line.

Why Accountants Don’t Fill the HR Gap

It’s not that accountants don’t want to help with HR issues – it’s that they’re not trained for it. Here’s why:

Different Qualifications: Accountants study financial regulations, tax law, and business accounting. Employment law requires specialized training in areas like discrimination legislation, tribunal procedures, and workplace investigations.

Different Updates: Tax laws change annually with budgets and legislation. Employment law evolves constantly through new regulations, tribunal decisions, and case law. It requires dedicated focus to stay current.

Different Liability: When accountants give financial advice, they’re covered by professional indemnity insurance for that specific area. Employment law advice carries different risks and responsibilities.

Time Constraints: Your accountant is already managing your financial compliance, tax deadlines, and business advisory work. Adding complex HR issues to their workload isn’t fair to them or effective for you.

The Partnership Approach

The solution isn’t to replace your accountant – it’s to complement them with specialised HR support. Think of it like your business health:

• Your accountant is like your GP – essential for overall business health and the first port of call for many issues

• HR support is like a specialist – focused expertise for specific challenges that require deeper knowledge

Many of our most successful clients work with accountants who recognize this distinction and actively recommend HR support to their clients. It’s not competition – it’s collaboration.

What Proper HR Support Looks Like

Comprehensive HR support should provide:

Preventive Measures:

• Employment contract templates

• Workplace policies and procedures

• Regular compliance updates

• Training on employment law basics

Reactive Support:

• Guidance on disciplinary issues

• Help with grievance procedures

• Support during employment disputes

• Tribunal representation if needed

Ongoing Advice:

• Regular policy reviews

• Updates on law changes

• Help with complex employee situations

• Strategic HR planning

Making the Right Choice for Your Business

Your business deserves comprehensive protection. Financial compliance and employment law compliance are both critical – and they both require specialized expertise.

The best approach? Keep your excellent accountant for what they do best, and add dedicated HR support for employment law compliance. Many accountants actually prefer this approach because it means they can focus on their core expertise while knowing their clients are fully protected.

Ready for comprehensive business protection? HR Hub combines the accessibility you need with the expertise you deserve. Our service works alongside your existing professional relationships to ensure you’re covered from every angle.

✅ Document templates and policies

✅ 24/7 chatbot support for quick questions

✅ Telephone access to qualified HR professionals

✅ Regular updates on employment law changes

✅ Step-by-step guidance for complex situations

Don’t leave gaps in your business protection. Your accountant handles the numbers – let us handle the people side of your business.

Our HR Hub makes employment law simple and accessible for microbusinesses. Contact us today to secure your access and special launch pricing.