Switching accountants: how it works

Who it's forThis guide is for sole traders, landlords and small limited companies thinking about moving to a new accountant or bookkeeper, whatever the reason.

Why people change accountant

Most people do not switch because of one big problem. It is usually a build-up of small ones:

• you only hear from your accountant when a deadline is close
• emails take days to get a reply
• fees keep changing, or arrive as hourly bills you did not expect
• your books are only looked at once a year, so you never know how the business is doing
• you cannot see your own figures without asking
• the business has changed, for example you have registered for VAT, taken on staff or become a limited company, and the service has not kept up

If any of that sounds familiar, it is worth a conversation. Changing accountant is a normal part of running a business, and it is far less work than most people expect.

You can switch at any time of year

There is no need to wait for your year end or until your tax return is filed. You can switch at any time of year, and your new accountant picks up from wherever your previous one left off.

What matters more is timing around deadlines. If your Self Assessment return is due on 31 January, or your company accounts are due soon, tell your new accountant straight away so the handover can be planned around it. Switching early gives everyone time to get the information across before anything is due.

How the switch works

Your part in the process is small. Most of the work happens between the two accountants.

1. 1

   Free call

   We talk through your business, your deadlines and what your current accountant does for you.

2. 2

   Agree the fee

   We agree a fixed monthly fee up front, so you know the cost before anything moves.

3. 3

   Tell your current accountant

   A short email letting them know you are moving is enough.

4. 4

   Professional clearance

   We contact your previous accountant for professional clearance and ask for the handover information we need.

5. 5

   HMRC authority

   You give us authority to deal with HMRC for you, which you approve yourself.

6. 6

   Books set up

   Your books are set up in IQ Books or your existing software, with live access for you.

What professional clearance means

When an accountant takes on new work, they send the previous accountant a professional clearance request. It asks whether there is any professional reason they should not take on the work, and it asks for the information needed to carry on, such as your last accounts, recent tax returns and the closing balances from your books.

It is a routine step between accountants. It is not your previous accountant giving you permission to leave. You are free to move whenever you choose, and you do not need to handle the clearance yourself.

What to gather

The handover goes faster if you can find these. Do not worry if some are missing, as most can be requested from your previous accountant or from HMRC.

• your last set of accounts and your most recent tax returns
• your Unique Taxpayer Reference (UTR)
• for a limited company, the company number and the company's Corporation Tax reference
• your VAT registration number, if you are registered
• your PAYE reference details, if you run payroll
• bank statements since the last period your previous accountant covered
• access to your bookkeeping software, if you use one (you can invite us as a user)
• any recent letters from HMRC or Companies House

Giving us authority with HMRC

To talk to HMRC and file returns for you, we need your authority as your agent. We send you a request and you approve it yourself. We never need your own HMRC sign-in details, and you should never share them with anyone, including an accountant.

If you run a limited company, payroll or a VAT registration, you approve our authority for each of those taxes as well, so we can deal with them all.

Moving your books

If your books are already kept in Xero, QuickBooks or Sage, we can keep them where they are. Nothing needs to move, and you keep the access you already have.

If you are working from spreadsheets or paper, we can set your books up in IQ Books, with live access for you. Either way, the opening balances are taken from your last accounts so the figures carry on from where they stopped. From then on, your books are kept up to date every month, as described on our bookkeeping services page.

What happens after the switch

We take over your tax returns and accounts as well as your books. Once the handover is done, you get a routine that keeps you ahead of your deadlines rather than racing them. Your books are kept monthly, you can see your figures whenever you like, and your returns are prepared well before they are due.

We prepare and file your Self Assessment tax return if you are a sole trader, landlord or director, your year-end accounts and Corporation Tax return (CT600) if you run a limited company, and your VAT returns if you are registered. Year-end and statutory work is completed by the Chartered Accountant on the team. If you work for yourself, our page for freelancers explains what that looks like for you.