If you are planning on contracting as a career, chances are you will employ several accountants before you find one which you are entirely comfortable with.
The process of changing accountants is relatively simple.
Here we look at the steps involved in the changeover process:
Write to your existing accountant
You first need to write to your current accountant – an email should suffice, unless they request a handwritten letter. You need to advise them that you are changing accountants to XYZ Ltd and ask them to furnish your new accountants with any requested information.
You should also indicate if there is an expectation of work to be finalised, for example; “I will require you to complete the financial year end accounts ending 31/8/2017”.
Registering with the new accountant
The new accountant will usually send some type of registration form to capture your personal and limited company information.
They will also need to carry out an anti-money laundering check on you by law, so you will typically be required to provide a scan of your passport or drivers’ licence, together with a recent utility bill.
If you haven’t chosen a new firm yet, take a look at our list of partner accountants.
Authorising the new accountant to deal with HMRC
You will need to sign a new 64-8 form to authorise the new accountant to deal with HMRC on your behalf, for both personal and company tax affairs, or by using HMRC’s online authorisation service.
Letter of Engagement
The new accountant (if registered with a professional body such as the ICAEW) is obliged to send you a ‘Letter of Engagement’ which sets out the expectations and requirements between the two parties.
The new accountant will to write to the previous one requesting professional clearance. Typically the letter would read something like this:
“We have been approached by Joe Bloggs to act as accountants on behalf of their limited company ABC Ltd. Please may you advise us if there is any professional reasons why you think we should not accept this appointment.”
The letter continues to request copies of accounts and tax records, tax returns and any other information they may need.
A fresh start
After a few weeks, assuming that there are no hold ups, all your accounting information should have been transferred and you will be safely on board with your new accountant.
Depending how much work remains to be done to bring your old accounts up-to-date, you may also have to negotiate a fee with your new accountant to put your books in order.
Naturally, should your new accountant not fit the bill, at some time in the future you will need to start the process again with a new firm of accountants!
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