Introduction -how to change accountants (UK)
How can you change your small business accountant, if you are a UK business owner? If you are a limited company contractor who works in the UK contracting industry, the time may have come when you choose to look at what to do when moving accountants. An ideal search online would be for a new limited company contractor accountant. Therefore, when you start the process of looking for a new accountant for contractors, what should you consider when you are switching contractor accountant?
At one time or another, many small business owners, including sole traders and limited company directors will investigate can I change accountants. When you are the owner of a contractor limited company, you may feel the time has come for you to switch contractor accountants. As a result, you and is now the right time? It may be the case that you have been with your existing accountant for quite a while as a UK contractor. The relationship was good in the early years however lately they are not being as attentive as they should be. As a result, you are now taking the time to consider how do I change accountants.
Switching accountants as a contractor -initial thoughts
In this guide we will look into can I change my accountant. We will also consider the best procedure for changing accountants and what expect when you switch contractor accountant. When we investigate how to change accountants, you will look for one who is:
- Good at what they do.
- Offer a good deal overall in terms of their fees.
Therefore, what is the best process to follow when you investigate switching contractor accountants?
How to start your search for a new accountant
If you can find an excellent limited company accountant to look after you from the outset, this is the best practice when you run your own company. As a limited company contractor, you will find that there are many accountancy firms and many on the local high street. However, as a contractor, it is essential when you investigate how to change my contractor accountant, you look for a dedicated professional accountant. In addition, this should be one who specialises in limited company contractors and small businesses. You can do this before you start your own company or shortly after this have set this up.
Not all accountants, just like anything else in life, are up to scratch. Therefore, there may come a time when you decide you would like to switch accountants.
Throughout your contracting career, you may have several small business accountants. Eventually, after you switch contractor accountant a few times, you may find the one that makes you happy. Let us now investigate how to switch accountant.
Change my contractor accountant
Where to start when switching accountants as a contractor
When we look at how can you change your small business accountant, there are several things to consider.
Finding someone knowledgeable is an excellent place to start when you look into switching accountant. They should be able to guide you when you run your own contracting company. When switching accountants, you also need to find one qualified with one or more of the UK’s professional bodies. In addition, they should also provide a high level of service for you and your business.
As part of looking after you, the new accountant should send a letter of engagement. This letter will set out what you can expect as part of the service that you are undertaking in the future. What’s more, you should have peace of mind that your new business accountant will take care of all of your tax affairs and advise you accordingly.
The choices available when you switch accountants
In your initial search when you start the process of what to do when changing accountants, you can look at:
- Local high street accountants.
- Specialist contractor accountants who could be based anywhere in the UK.
- Online or cloud-based accountants. They will look after you with online software. In addition, some may also be available to speak with on the phone.
Your ideal new accountant
When we investigate how to transfer accountants, your new choice of accountant should have specialised knowledge. Importantly, this knowledge will be in the UK contractor and small business areas. When looking at how to change your accountant your new choice should also be able to advise you on the best ways to be tax-efficient. As part of looking after you and your company, they should be able to advise you:
- Which is the best VAT scheme (standard/normal or Flat Rate).
- What you can claim as business expenses.
- Advise of any exemptions and allowances available from HM Revenue & Customs (HMRC).
- Suggest the best ways for you to extract income from your company.
Another thing to watch out for when you consider switching accountant is that the new accountant is familiar with online accounting software. Using an online digital system is now a legal requirement under Making Tax Digital (MTD). If your company is VAT registered, it now needs to use MTD-compliant software from 1 April 2022. Your new accountant should also ensure that you prepare and file your tax return on time and advise you accordingly.
Switching accountants as a contractor -the areas that your new accountant should be familiar with
When you look at how can you change your small business accountant, there is more to consider. As part of your search to switching contractor accountants, you will be looking to find accountancy for small businesses or a specialist contractor accountant. The accountancy professional will be educated in their field. In addition, they will be able to advise you on all the things that affect you as a UK contractor. These areas will include:
- The 24-month rule work for travel expenses.
- How to operate on a tax-efficient basis when you take a contractor’s salary and dividends.
- How the IR35 rules work.
- The S660A rules.
Further still, they should also be able to advise you on what you can claim for as expenses. In particular, travel type expenses such as:
In addition, other less well-known allowances such as:
This article covers the process of how to change my contractor accountant however please read the article which covers tax tips for UK contractors. This contains some good and sound advice you should know when you have your own business. The guidance will include the latest information for the best tax planning ideas.
For ease of reference, please read our article of limited company taxes. In addition, another good read for a UK business owner is the filing dates for official documents and tax payments.
How to change accountant -the process to follow when switching accountants
Deciding to change your business accountant
If you decide to switch accountant, you should first check your Terms and Conditions (T&Cs) with your present accountant. When you choose a contractor accountant for the first time, they should be transparent with you from the outset. In addition, they should also explain what your responsibilities are and what fees they will charge.
Your company may pay a monthly fee as part of your current service. When this is so, you may have done this for much, if not all, of your current accounting year. If this is the case, the payments made so far should include the work which is required to prepare and file your company’s accounts for the current year.
Some accountants will try and refuse to prepare year-end accounts if you say you will leave them. Therefore, it is vital to check what your T&Cs include.
When you are looking to change your accountant, do your research
If you decide to change my contractor accountant, you should do your research. This research will involve finding a new one that fits your requirements. Once you do find the right one, you can make contact. Then, once you know they are happy to take you on, you can make a move by switching accountants.
Switching accountants -how to tell your accountant you are leaving
Let’s now consider how to leave your accountant. If you are switching contractor accountants, and they have yet to prepare your latest financial accounts, what should you do? Will you expect your new business accountants to prepare these as part of a new monthly fee? You must remember that in most cases, they will charge you an extra fee for the work related to these. Annual accounts are your accountant’s main task every year. Therefore, when you change your accountant, it is good to plan ahead.
Important to note and reiterate here that unless you do not mind paying an `extra fee,’ it is best to ensure that your present accountants prepare your latest set of accounts before you change accountants. You can contact your planned new accountant before your current year-end finishes or shortly after. Once contact has been made, you can make plans for the move to them shortly into your new financial year.
Changing accountants process -contact your current accountant
When the time is right, you need to contact your present accountants and let them know you are leaving. In addition, you will also need to let them know what work you expect them to do for you before you go.
An email will usually suffice, although they may require a formal letter. You will need to let your present accountant know that you are moving to ABC accountants. Furthermore, it would be best if you informed them that ABC accountants would contact them shortly to request the relevant handover information.
Check what you have paid for
As mentioned, when you change your small business accountant, you should check what work the payments you have made in the current year cover. It is best practice to ensure you have paid enough to cover the cost of your current year’s financial accounts.
The best time to change your company’s accountant is at the start of a new financial year. The new accountant can then pick up at a `clean edge’. Please note that you can also change mid-year if the need arises. However, this is not as straightforward as making the change at the start of a new financial year.
Switching accountants -what your new accountant will need
When you switch contractor accountants, as part of taking care of you and your company in the future, your new contractor accountant will require various information. This information will include identification for money laundering purposes. As part of this, you can supply a copy of your photo passport or photo driving license. In addition, you will also need to provide a copy of a recent utility bill showing your home address. The new accountant will also need other information to make the handover as smooth as possible.
Your new business accountant will need to deal with HMRC going forward. Notably, they will need to add your business to their HMRC agent account for the various company taxes to assist in this. They will need to do this for the company and you personally. This process can involve the completion of form 64-8. However, the accountant can also request this via their HMRC account. As another option and better still, you can add them via your HMRC Business Tax and Personal Tax accounts.
When you change your accountant, your new appointment must write to your soon-to-be previous accountant. They will do this to request professional clearance. In addition, they will also ask for relevant handover information as part of the change.
When we consider how to change accountants there are various factors to take into account. Once you switch contractor accountant, you should be properly up and running with your new accountants after a few weeks. As a result, they should be in an ideal position to look after your affairs going forward.
Finally, the best time to change your company’s accountant is at the start of a new financial year. Therefore, it is good in this respect to plan ahead.
Link to Contractor Advice UK group on