So, you’ve been reading my LinkedIn posts over the last few months, you’ve been impressed with my knowledge, you’re happy with my price (£59/month), and you find my LinkedIn recommendations reassuring, and now want to take the leap and move over to me, so what next?
Generally speaking, changing accountants is a simple and straight forward process. All that happens is that you stop paying your previous accountants who stop working for you, and instead start paying me to do the accounting and tax work for your company.
One of the most important things to bear in mind is the timing of the move. For example, when is your next VAT return, accounts, corporation tax return and personal tax return due. Generally, it makes sense for the previous accountant to finish up all the previous year’s stuff before you make the move over to me. However I am happy to pick up the previous outstanding work if the contractor is happy to go back and update their FreeAgent account (this is an online accounting software) for all the previous tax year and assuming the deadlines for these things are not too soon. Whether or not there will be a fee for me to charge you for the previous years’ work will depend on the size of your business (e.g. number of transactions), the complexity of your business (e.g. if your business holds investments on the balance sheet), whether or not you are currently using FreeAgent, and how soon/far away the deadlines are, etc.
The general process for switching is:
- We discuss how we are going to approach this, e.g. which accountant will be doing the previous year’s returns and if the previous accountant will be doing these returns, you go back to them and get these completed first.
- If I will be doing the previous year’s returns or the previous accountant has finished the previous year’s returns, then you complete my application form, sign my contract (letter of engagement) and make your first monthly £59 payment to me.
- We then get you setup on FreeAgent (if you are currently not using FreeAgent) and then if your accountants are slow/uncooperative/unqualified we can get as much of the handover information about your company before you resign from your current accountants, or alternatively, if your accountants are good but just expensive, then you can resign from your previous accountants and we can wait for them to send all the handover information that they have on your company to me. Either way I will need to contact your previous accountants for professional clearance and any handover information that you are unable to provide. In addition, you will need to contact them to let them know you are leaving, that I will be in touch, and that they should cancel your direct debit with them.
- If you are already using FreeAgent you can keep your existing FreeAgent account. Your accountant can remove your FreeAgent account from their dashboard with a few clicks and I can add your FreeAgent account onto my dashboard with a few clicks too. Once your FreeAgent account is on my dashboard I will be responsible for paying the monthly FreeAgent subscription fees (rather than your previous accountants).
- Then we sit and wait for your previous accountant to provide all the handover information requested, and once they do this I will contact HMRC to act as your authorized tax agent. HMRC will generally send you authorization codes in the post for you to forward onto me for me to enter into my HMRC’s tax agent’s login. This will enable me to make submissions on your behalf via my HMRC accountant’s credentials (rather than pretending to be you, and making submissions using your HMRC credentials, which many unprofessional accountants still do even today!).
- While we wait for HMRC and your accountant to send us the documents we require, you will update FreeAgent while I will send you various emails so I can gain a more detailed understanding of your tax situation, e.g. what expenses you are currently claiming, what salary and dividends you are paying yourself, how much your spouse earns, whether or not you claim child benefit, what your future plans are, etc.
The handover information I generally require is:
- Last year’s accounts, corporation tax return, and corporation tax computation.
- Trial balance and other breakdowns of your accounts showing how the figures have been calculated and what they mean.
- Last year’s personal tax return and personal tax computation, including a detailed schedule of dividends for the previous tax year and the current tax year.
- VAT certificate.
- Copies of the last 4 VAT returns and a breakdown of how the figures have been calculated, e.g. cash basis, invoice basis, standard scheme, flat rate scheme, etc.
- Companies House Authentication Code.
- PAYE reference number and accounts office reference number.
- P11 Deduction Sheets or other monthly pay breakdown showing the year to date gross salary, tax, NI, other deductions, etc for the current tax year and previous tax year.
- P60 for the previous tax year.
- If applicable, P11D, e.g. where there is a company car, private medical insurance, or other non-cash benefit.
- A note of any matters that are currently pending, e.g. tax investigations, penalty appeals, outstanding returns, etc.
- Any auto-enrollment pension details.
Easily, the most frequently asked question regarding changing or switching accountants is how long it takes. In general from my experience of dealing with many switches, I would say it generally takes around 3 weeks (plus or minus 2 weeks). Ultimately, the time it takes will depend on your previous accountants, how professional they are, how busy they are, how keen they are to see you leave/keep you, and how long they take to respond to my emails requesting the handover information.
Posted By
AR Tax Accountants
£59/month accountants for contractors, freelancers, consultants, interims and locums
The above information is just for guidance purposes only and is not a substitute for professional advice and consulting the legislation.
