Changing accountants is something many business owners put off because they assume it will be difficult or time-consuming.
In reality, switching accountants is usually a straightforward process. Once you have chosen a new accountant, much of the work involved in transferring your records and information can be handled for you.
People change accountants for all sorts of reasons. You may be unhappy with the service you are receiving, finding it difficult to get hold of your accountant, paying more than you expected or simply looking for more advice and support as your business grows.
Whether you are looking for a new accountant in Cambridge or accountant in Nottingham, understanding how the switching process works can make the decision much easier.
Here is what you need to know.
Can you change accountants at any time?
Yes, in most cases you can change accountants whenever you want.
You do not have to wait until the end of your financial year, although some people prefer to switch at this point as it can make the handover slightly simpler.
If you are unhappy with your current accountant, there is usually no reason to continue working with them until your year-end simply because you think you have to.
Before making the change, it is worth checking whether there is any work currently being completed and whether you have any upcoming deadlines. This could include:
- Your annual accounts
- A Self Assessment tax return
- A VAT return
- Payroll
- Corporation Tax
- A Companies House filing
The most important thing is making sure it is clear who is responsible for each piece of work during the changeover.
How do you switch accountants?
Switching accountants usually follows a fairly simple process:
- Choose your new accountant.
- Tell them that you are currently working with another accountant.
- Give permission for your new accountant to contact your existing accountant.
- Your new accountant provides a professional clearance letter and requests the information they need.
- Your records and relevant information are transferred.
- You authorise your new accountant to deal with HMRC where necessary.
- Your new accountant takes over your accounting and tax affairs.
Your new accountant should guide you through the process and let you know if they need anything from you.
Step 1: Choose a new accountant
Before leaving your current accountant, make sure the new one is right for you and your business.
It is tempting to focus entirely on price, but it is worth looking at what you are actually getting for your money.
For example, some businesses simply need an accountant to prepare their annual accounts and tax return. Others need regular bookkeeping, payroll, VAT support and advice throughout the year.
You may also want an accountant who can help you plan ahead rather than only contacting you when something needs to be filed.
Before agreeing to work with a new accountant, it is useful to understand:
- What services are included
- How much the service will cost
- How often you will be able to speak to them
- Style of communication, is it jargon free
- Who will be dealing with your account
- Whether bookkeeping, payroll or VAT are included
- What accounting software they use or support
- Whether they can help as your business grows
The cheapest option is not always the best option if you end up paying extra for services you assumed were included.
Step 2: Tell your new accountant that you want to switch
Once you have chosen your new accountant, let them know that you are currently working with someone else.
You will normally need to provide the contact details of your existing accountant and give permission for your new accountant to contact them.
Your new accountant can then begin the process of taking over.
This usually involves what is commonly known as professional clearance or a professional enquiry.
Your new accountant will contact your previous accountant to establish whether there is anything they should be aware of before taking over your affairs and to request the information they need.
You do not need your existing accountant’s permission to appoint someone new. The decision to change accountants is yours.
Step 3: Your new accountant contacts your existing accountant
With your permission, your new accountant will normally contact your existing accountant directly.
They may ask for information such as:
- Previous accounts
- Tax returns
- Corporation Tax information
- VAT records
- Payroll information
- Bookkeeping records
- Details of any ongoing work
- Information about HMRC enquiries or correspondence
- Important upcoming deadlines
Exactly what is required will depend on your circumstances.
A straightforward Self Assessment client, for example, will usually have a simpler handover than a limited company with payroll, VAT and regular bookkeeping.
Step 4: Let your existing accountant know you are leaving
You may need to formally let your existing accountant know that you are appointing someone else.
This does not need to be complicated.
A short email confirming that you are changing accountants is usually enough.
You do not have to give a detailed explanation for your decision.
Even if you are unhappy with the service you have received, it is generally best to keep things professional. A straightforward handover will usually make it easier for everyone involved.
If your new accountant is managing the process, they can advise you on anything you need to send.
Step 5: Your records and information are transferred
Your new accountant will then request the information they need to take over your affairs.
This could include copies of previous accounts and tax returns, but there may also be access to software and online systems to consider.
Many businesses now use several different systems, including:
- Xero
- QuickBooks
- Sage
- Payroll software
- Receipt capture software
- HMRC online services
Your new accountant will usually discuss what software you currently use and how access should be transferred.
One thing worth remembering is not to cancel any software subscriptions too early.
Check with your new accountant first. You may need continued access to previous records and historical information while the handover is taking place.
Step 6: Authorise your new accountant to deal with HMRC
Changing accountants does not automatically give your new accountant permission to deal with HMRC on your behalf.
You will need to authorise them separately.
The exact process depends on the taxes and services involved. Your new accountant should explain what you need to do and help you complete the relevant authorisation.
You should not give your Government Gateway login details to your accountant. HMRC provides processes that allow accountants and tax agents to be formally authorised to deal with your affairs without needing access to your personal login.
Once the appropriate authorisation is in place, your new accountant can deal with HMRC on your behalf for the services they have been authorised to manage.
Step 7: Check who is responsible for upcoming deadlines
This is probably the most important part of changing accountants.
Before the handover is complete, make sure you know who is dealing with anything that is due soon.
For example:
- Who is submitting your next VAT return?
- Who is running payroll?
- Who is preparing your accounts?
- Who is submitting your Self Assessment return?
- Is there a Corporation Tax deadline approaching?
- Are there any outstanding questions from HMRC?
- Has your previous accountant already started work on something?
Do not assume that your old accountant or new accountant is dealing with something unless this has been confirmed.
This is particularly important if you are switching accountants close to a filing deadline.
Can you switch accountants in the middle of the year?
Yes.
You do not have to wait until your year-end to change accountants.
People switch in the middle of the year for many reasons. Perhaps their business has grown and they need more support. Maybe they have started employing people, registered for VAT or need more regular financial information.
Sometimes the relationship simply is not working.
Changing at the end of your financial year can make the process a little tidier, particularly if your accounts are about to be prepared. However, this should not stop you from changing if you need to.
A new accountant can review where things currently stand and help you decide the best way to manage the transition.
How long does it take to switch accountants?
The answer depends on how straightforward your affairs are.
For an individual who only needs help with a Self Assessment tax return, the process can be relatively quick.
For a limited company with bookkeeping, VAT, payroll and multiple directors, there is likely to be more information to transfer.
The timescale can also depend on how quickly information is provided and whether there are any ongoing issues or deadlines.
The best time to start the process is before something becomes urgent.
If you are thinking about changing accountants and have a deadline approaching, it is better to speak to a new accountant as soon as possible.
Do you have to pay your old accountant before switching?
You may still be responsible for paying for work your existing accountant has completed.
Changing accountants does not remove any legitimate fees that are due under your agreement.
If you have a disagreement about fees or work that has been carried out, try to address this as early as possible.
It is also worth making sure that any dispute does not create confusion around important deadlines or ongoing work.
What information will your new accountant need?
Your new accountant will tell you exactly what they need, but it can help to have some basic information available.
This might include:
- Your current accountant’s contact details
- Your business name
- Your company registration number
- Your Unique Taxpayer Reference (UTR)
- Your VAT registration number, if applicable
- Details of your accounting software
- Copies of recent accounts or tax returns
- Details of any upcoming deadlines
- Information about any ongoing HMRC issues
Don’t worry if you do not have everything.
Your new accountant can usually identify what is needed during the handover process.
Why do people change accountants?
There is no single reason why people switch accountants.
Some of the most common reasons include the following.
Poor communication
You may find that emails are not answered, calls are not returned or you only hear from your accountant when there is a deadline approaching.
Good communication matters, particularly when you are running a business and need to make decisions quickly.
Your business has grown
The accountant who was right for you when you first started may not necessarily be the right one as your business becomes more established.
As a business grows, accounting and tax requirements often become more complex.
You want more advice
Some businesses are happy with an accountant who prepares their accounts once a year.
Others want regular advice, management information and support with tax planning.
There is nothing wrong with either approach, but it is important that your accountant provides the level of support you need.
Fees have increased
A fee increase does not necessarily mean you should change accountants.
However, it is reasonable to review what you are paying and what you are receiving in return.
Make sure you are comparing like for like. A lower monthly fee may not include services that are included elsewhere.
Your accountant is retiring
Sometimes the decision is made for you.
If your accountant is retiring or selling their practice, you may decide that it is the right time to look at other options.
You simply want a change
Not every client changes accountants because something has gone wrong.
Sometimes you meet another accountant who feels like a better fit for you and your business.
Will changing accountants cause problems with HMRC?
Changing accountants should not cause problems with HMRC.
Your new accountant simply needs the correct authority to deal with HMRC on your behalf.
The main thing to watch is deadlines.
Even if you appoint an accountant, you remain responsible for making sure that your tax and filing obligations are met.
That is why it is important to make sure responsibility for upcoming work is clear while the change is taking place.
Should you switch accountants before or after your year-end?
There is no rule that says you must wait for your year-end.
If your existing accountant has already started preparing your accounts, it may make sense to allow them to finish that work before changing.
In other situations, changing immediately may be the better option.
For example, if communication has broken down or you have concerns about how your affairs are being handled, waiting several months simply because your year-end has not arrived may not be sensible.
A new accountant should be able to look at your current situation and advise you on the best point to switch.
Frequently asked questions about switching accountants
Is it difficult to switch accountants?
Usually, no.
Once you have chosen a new accountant, they can often handle much of the process for you. You may need to give permission for them to contact your existing accountant and complete the necessary HMRC authorisation.
Can I change accountants at any time?
Yes, you can usually change accountants whenever you choose.
You do not normally need to wait until the end of your financial year.
Can my old accountant stop me from changing?
No.
You are free to choose who represents you and manages your accounting affairs.
Can I switch accountants if I owe my current accountant money?
You can still appoint a new accountant, although you may remain responsible for fees that are legitimately due to your existing accountant.
How much does it cost to switch accountants?
This depends on the accountant and the complexity of your affairs.
Some accountants will include the process of switching as part of their normal onboarding process, while others may charge for additional work where the handover is more complicated.
It is worth asking what is included before you make the move.
Thinking about changing accountants?
Changing accountants does not have to be difficult.
At GMS Accountants, we can help guide you through the process and manage the handover from your existing accountant.
We can contact your previous accountant, request the information we need and help you complete the relevant authorisation so we can deal with HMRC on your behalf.
If you are thinking about changing accountants and are looking for an accountant in Cambridge or an accountant in Nottingham, the team at GMS Accountants can help.
