Once you’ve decided on your new accountant, they will take care of the process of switching. They’ll ask you for information about yourself and contact your old accountant to provide copies of documents.
You may choose to contact your current accountant by phone or an email to let them know you’ve appointed a new accountant and to expect contact from them.
Alternatively, you can leave all contact to the incoming accountants to handle on your behalf. This can be helpful if the relationship has broken down and you don’t want or have had little contact with your outgoing accountant.
Your new accountant will gather some personal information from you to check your identity for their records. This can usually be done electronically, so avoiding the need to provide documents such as passports, bills, etc.
You won’t need to supply copies of accounts or tax returns, as you can authorise your old accountant to provide them directly to the new accountant.
Your new accountant will ask you to sign a letter of engagement, which details their services, charges and terms and conditions.
Check what you’ve paid your old accountant to do
If you pay your accountant on a monthly basis, you’re probably paying in advance for some services. Check your letter of engagement (this letter should be issued to you each year to outline their services to you), and talk to your old accountant to see if you can be refunded for services they have not completed yet. If you can get money back, find out how much that will be.
You may not be able to get a refund, so consider asking your old accountant to complete what you have already paid for before switching accountant. This would most likely be your annual accounts and tax return, as they are done after the end of the accounting year.
Check what you still need to pay your old accountant for
If you haven’t been paying your accountant in monthly instalments, there could be a final charge for work. It’s a good idea to talk with them to establish if there will be a final bill. It is often the case the old accountant will not release details to an incoming accountant until their fees are paid up to date.
How long will it take to switch to a new accountant?
If you are not waiting for your old accountant to complete any work, usually the whole handing over process takes between 2 and 6 weeks. It mostly depends on how long it takes your old accountant to provide the handing over information requested by your new accountant.
If you want to wait until your year end accounts are completed, this could take up to 9 months after the year end for a company, or 31 January following the end of the tax year for self-employed people. However, it can be done more quickly – completing annual accounts and a tax return within 30 days of the year end for a micro business is not unreasonable.
Professional Ethics and Professional Clearance between accountants.
There is a strong code of ethics between accountants. A new accountant will need to write and request professional clearance from the old accountant. This clearance request will be accompanied by an authorisation letter from you.
If there are significant delays, a complaint can be made to the professional body of the old accountant, which usually speeds things up.
Give your new accountant authority with HMRC
You will need to give your new accountant authority to speak to HMRC about your tax affairs. A code should be sent to you by letter direct from HMRC, which you then pass to the new accountant who can complete the authorisation.
If you have existing cloud accounting software, you can give your new accountant access to the software and remove access for your old accountant
If you are starting with new accounting software, you will probably need to log in and set up bank feeds. This allows your business bank transactions to be directly pulled in to the software to be reconciled. They may have a portal for you to upload documents from time to time to assist them in preparing your tax returns.