How do I change my accountant?
Your accountant plays a key role in the functioning and profitability of your business. In addition to managing your accounts, they are responsible for ensuring compliance with tax legislation and helping you to operate as tax efficiently as possible.
If you don’t believe you are getting value for money from your accountant, it may be time to find a new one. Fortunately, changing your accountant can be a quite straightforward, providing you follow the correct protocol.
Why would you want to change your accountant?
There are a whole host of reasons why you might be considering changing accountant, including the following:
- You are unhappy with the level of service
- Your accountant isn’t being proactive in finding tax-saving opportunities
- Your accountant has provided poor advice leading to problems with HMRC
- You can find a better level of service elsewhere
- Your accountant is unapproachable and rarely available to handle urgent problems
- You disagree with the fees being charged and can find a better deal elsewhere
- Your accountant doesn’t provide a cloud accounting solution
- Your company has grown, and your current accountant can’t cater for your needs.
Things to consider before changing your accountant
If you are intending to cut ties with your accountant, the first thing to do is check the details of your agreement with them to ensure that there aren’t any exceptional circumstances that apply to transferring your custom to a new provider.
Making sure that you have fulfilled your end of the agreement means your existing accountant should have no legitimate reason to refuse to cooperate with your requests when changing over.
Consider the timing of the switch. Ideally you will want to choose a date when there is little active business between you and your existing accountant, and when neither party is waiting on an action or payment. This should help ensure a swift changeover.
Issuing a letter of professional clearance
When you have found a new accountant with whom you are happy, write, email or telephone your existing accountant and tell them that you have decided to change to another accountant.
Next you need to appoint your new accountant who, as a matter of professional ethics, will send a letter to your existing accountant. The purpose of this letter is to:
- Confirm that there aren’t any professional reasons why your new accountant shouldn’t take you on
- Request the transfer of all documents relevant to your accounts.
This letter will also ask that your existing accountant provide a letter of disengagement in return. This is a letter detailing the work they have completed up to this point, including key dates and information, which you will be required to sign off on.
If your existing accountant is Chartered, Certified or accredited under any other professional qualification, they will be bound by their regulatory body to cooperate fully with these requests within a reasonable timeframe, barring exceptional circumstances.
The professional bodies oblige members to provide documents without charge. However, in some instances you might find that your existing accountant will charge a small fee for the time that it has taken them to compile the necessary paperwork. This shouldn’t amount to any more than an hour’s work.
Registering with your new accountant
Providing the outgoing accountant has cooperated fully with your requests, it is now time to assign authority to your new accountant to manage your tax affairs and deal with HMRC on your behalf. This involves signing a new 64-8 form, or alternatively using HMRC’s online authorisation service.
You can expect to receive a data questionnaire from your new accountant, with the purpose of capturing your personal and business information. This is in addition to a ‘letter of engagement’, which your accountant issues in order to set out the expectations and requirements on behalf of either party. Your new accountant is also legally required to carry out an anti-money laundering check on you.
How to handle disputes over fees when changing accountant
Whilst it is unlikely that you will encounter any problems when changing your accountant, there are three factors which could hinder your chances of a smooth changeover.
The most common of these is a dispute over fees owed to your accountant. Your accountant may be seeking to charge a fee which you consider inappropriate and refuse to pay.
They aren’t permitted to refuse professional clearance on the basis of a fee dispute alone, although they are entitled to advise your new accountant of the circumstances, which could impact your new accountant’s decision whether to take on your account.
Your new accountant may be able to assist in resolving the problem. However, if you are unable to reach a resolution by this means, you could file a complaint against your outgoing accountant with their professional body. Most accountants would wish to avoid such action, and so you may find that the suggestion of a complaint may be enough to help reach an amicable solution.
Alternatively, you can arrange a fee arbitration by contacting the fee arbitration officer at the Institute of Chartered Accountants (ICAEW) or other relevant body. This is seen as a typically swift and fair way to reach an agreement.
Problems when changing accountant – illegalities and irregularities
If your outgoing accountant has reasons to refuse to transfer your accounts involving unethical or illegal behaviour on your part, you will have to permit them to discuss this with your new accountant. However, if you believe the allegation made against you to be unfair, you will need to challenge the accountant directly, as well as discussing the matter with your new accountant. Serious allegations such as this can’t simply be ignored.
Accounting irregularities pose another area of contention. If there are issues surrounding your financial reporting, you will have to settle them with your outgoing accountant before changing over.
Providing you are running your business properly, you certainly shouldn’t encounter either of these issues, meaning the process of changing accountants should be straightforward from start to finish.