Switching accountants

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As a UK contractor, you may during your contracting career, look into switching accountants. Basically, there may be various reasons for deciding to switch contractor accountant. Therefore, how can you change your small business accountant as a UK limited company contractor?  When you’re a UK business owner who works in the contracting industry, the time may have come to change accountants. Therefore, an ideal search online would be for a great experienced limited company contractor accountant. When you start the process of switching contractor accountants and are looking for a new accountant for contractors, what should you consider? In this guide, we’ll look at how to change accountants and find out the process when you move to some new professional accountants for contractors. We’ll also look at the switch my contractor accountant process and discover when you should make the change to a new accountancy firm.

At one time or another, many small business owners including sole traders and limited company directors, will look into how can I change accountants. When you’re the owner of a contractor limited company, you may also feel the time has come for you to switch contractor accountants. As a result, you may ask is now the right time to look at how to choose a new accountant for your business? Indeed, it may be the case that you’ve been with your existing accountancy firm for quite a while as a UK contractor. The relationship was good in the early years, but lately they aren’t being as attentive as they should be. As a result, you’re now looking into switching my contractor accountant. Therefore, what should you do when you’re considering how do I change accountants.

Initial thoughts on switching accountants as a contractor 

What to think about first

In this guide, we’ll look into can I change my accountant and how to switch your contractor accountant. We’ll also consider the best procedure for changing accountants and what expect when you switch contractor accountant. Therefore, when we research how to change accountants (UK), you’ll look for one who is:

  • Good at what they do they’ve lots of experience.
  • Offer a good deal overall, in terms of their fees.

Therefore, what’s the best process to follow when you look at switching contractor accountants? Also, how do we find the best contractor accountants in the UK? 

How to start your search for a new contractor accountancy firm

If you can find a top limited company accountancy firm to look after you from the outset, this’ll be great. Indeed, it’ll be ideal if you can do this, when you start to run your own company. As a limited company contractor, you’ll find that there’s many accountancy firms out there. Indeed, many of these are on the local high street. When starting up for the first timer, you can search for the best limited company accountants either before you start your own company, or shortly after this have set this up.

However, as a contractor, you may have had an accountancy firm for a period of time and are now looking for a replacement. Therefore, when you do look into how to swap accountancy firms, please search for dedicated professional accountants. What’s more, when you’re changing contractor accountant, it’d be wise to look for limited company accountants (UK) and ones who specialise in limited company contractors.  Not all accountancy firms, just like anything else in life, are up to scratch. Therefore, there may come a time when you decide you would like to switch accountancy firms. As part of this, you’ll need to consider what to do when moving accountants and how to look for the best contractor accountancy firm.

Throughout your contracting career, you may have a few small business accountants. What’s more, after you switch contractor accountant a few times, you may find the one that makes you happy. Let’s now take the time to look into how to switch accountant.

The first steps when you look how to change my contractor accountant 

Where to start when switching accountants as a contractor

When we look at how to replace your current accountancy firm, there’s several things to think about as part of moving contractor accountant. Therefore, when you’re in the process of finding accountants, it’s good to find a firm who have knowledge in the contracting space. Indeed, when you’re looking to switching accountancy firm, this is a great place to start. They should be able to guide you when you run your own contracting company. Also, when moving accountancy firms, you need to find one qualified with one or more of the UK’s professional bodies. What’s more, they should also provide a high level of service for you and your business.

As part of looking after you in future, your new accountancy firm should send a letter of engagement. This letter will set out what you can expect as part of the service that you’ll undertake in the future. What’s more, you should have peace of mind that your newly chosen limited company 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:

  • Accountancy firms on your local high street. Many of these’ll look after all types of businesses. However, they may not be well versed as accountants for contractor
  • Specialist contractor accountants who could be based anywhere in the UK. As many contractors work in IT, you’ll find that there’s many IT contractor accountant What’s more, many IT contractor accountants (UK) also look after many contractors who work in other industries too.
  • Cloud-based accountants that you can find online. If you choose one of the online accountants for contractors, they’ll look after you with online software. What’s more, an online contractor accountant may also be there to speak with on the phone when you need this.

These are some initial starting ideas; however, the key is to find someone that specialises in looking after UK contractors. If your business is VAT registered too you should ensure the new firm are familiar with online digital accounting.

Your ideal new accountancy firm

When we look into how to transfer accountants, you should look for one who has specialised knowledge. Indeed, this knowledge will be in the UK contractor and small business areas. When we look at how to change your accountant, your new choice should also be able to advise you on the best ways to be tax-efficient. Therefore, when you change your contractor accountant, as part of looking after you and your company, they should be able to advise you:

  • Which is the best VAT scheme for your business (standard/normal or Flat Rate).
  • Advise of any exemptions and allowances available for your business from HM Revenue & Customs (HMRC).
  • Suggest the best ways for you to extract your income from your company.

Something to watch out for when you consider switching accountant is that the new accountancy firm uses online accounting software. Indeed, 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. If you’re using software with your current accountancy firm, a swap in accountants may also mean switching accounting software. This’ll indeed be the case if your new accountancy firm don’t use your current software. Another point to watch out for is your new accountancy practice should ensure that you prepare and file your tax return on time and advise you accordingly.

Switching accountants as a contractor -the areas your new accountancy firm should know about

When you’re changing accountancy firms, there’s more to consider. As part of your search to switching contractor accountants, you’ll look to find accountancy for small businesses or a specialist contractor accountancy practice. The new practice doesn’t have to be solely focused on contracting clients however, if they have professionals there who specialise in this area, this’ll suffice. Also, it’s key that the accountancy professionals are good in their field. Also, they’ll be able to advise you on all the things that affect you as a UK contractor. Therefore, when changing accountancy firms, the areas that your choice of Specialist contractor accountants should have knowledge in will include:

  • How the IR35 rules work for UK contractors.
  • The S660A rules apply to limited companies.

Further still, when you change contractor accountant, they should also be able to advise you on what you can claim for as expenses. Indeed, this includes travel type expenses such as:

  • Mileage for your business journeys and which journeys you can claim for.
  • Meals when you’re out and about on business including when you can claim for these.

What’s more, other less well-known allowances such as:

  • Trivial Benefits for you and your staff and how claims for these expenses work.

Also, your new appointment should be able to help improve your cashflow and operate tax-efficiently. As a business owner, you can earn more if you operate on an efficient basis.

Other tips

This guide covers the process of switching professional accountancy firms and how to go about this. What’s more, besides the process to follow when moving accountants, please read our guide which covers tax tips for UK contractors. This contains some good and sound advice you should know when you have your own business. What’s more, the guidance includes the latest advice for the best tax planning ideas.

In respect of business taxes, please read our guide on limited company taxes. Further, 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 

When you decide to switch your business accountant  

As a contractor or small business owner, what is the best way to change accountants? First, if you decide to switch accountancy firms, you should check your Terms and Conditions (T&Cs) with your present accountancy firm. When you choose a contractor accountant for the first time, they should be clear with you from the outset. What’s more, they should also explain what your responsibilities are and what fees they’ll charge your business.

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 accountancy firms will try and refuse to prepare year-end accounts if you say you’ll leave them. Therefore, it’s vital to check what your T&Cs include.

When you look to replace your accountant, do your research  

If you decide you’d like to find a replacement accountancy firm, please do your research. This’ll involve finding a new one that fits your ideal requirements. You could start this process by viewing some forums on this subject. What’s more, you could check out some contractor accountant directories or ask fellow contractor colleagues for recommendations. Once you do find the right one, you can contact them. Then, once you know they’re happy to take you on, you can take the next steps (please read on).

Switching accountants -how to tell your accountant you are leaving

Let’s now look at how to leave your accountant. If you’re switching contractor accountants, and they have yet to prepare your latest financial accounts, what should you do? Will you expect your new business accountancy firm to prepare these as part of a new monthly fee? You must bear in mind that in most cases, that the new accountancy firm will charge you an extra fee for the work related to these. Indeed, annual accounts are your accountancy professional’s main task every year. Therefore, when you switch accountancy firms, it’s good to plan ahead.

It’s key to reiterate that unless you don’t mind paying an `extra fee,’ the best thing to do is ensure that your present accountants prepare your latest set of accounts before or whilst you’re make the switch. Next, as part of the process of moving accountants, you can contact your planned new accountancy firm 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 accountancy firm and let them know you are leaving. Also, you should let them know what work you expect them to do before you leave.

An e-mail to them should suffice, although they may require a formal letter. As part of this, you’ll need to let your present accountancy firm know that you’re moving to ABC accountants. Also, it would be best if you informed them that the ABC firm will contact them shortly to request the relevant handover information. Indeed, it’s standard practice for a new accountancy practice to send an information request to the previous accountant.

Check what you have paid for  

As we mention earlier, when you plan to replace your small business accountancy firm with another firm, you should check what payments you’ve paid to them in the current year cover. What’s more, it’s best practice to ensure you’ve paid enough to cover the cost of your current year’s financial accounts.

The best time to swap your company’s accountancy firm is at the start of a new financial year. Indeed, the new firm can then pick up at a `clean edge’. What’s more, you can also change mid-year if the need arises. Please note, this isn’t as straightforward as making the switch at the start of a new financial year.

Switching accountants -what your new accountancy firm will need  

When you switch contractor accountants, as part of taking care of you and your company in the future, your new accountancy firm will require various information. They may send you a registration form which captures all your company and personal data. What’s more, they’ll require your ID for money laundering purposes. As part of this, you can supply a copy of your photo passport or photo driving license. Also, you’ll also need to provide a copy of a recent utility bill which shows your home address. The new firm will also need other details to make the handover as smooth as possible.

Your new business accountancy professionals will deal with HMRC going forward. Therefore, they’ll need to add your business to their HMRC agent account. As part of this, they’ll add the various company taxes for your company to assist in this. Also, they’ll need to do this for the company and for 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 yourself via your own HMRC Business Tax and Personal Tax accounts.

When you change your accountancy firm, your new appointment must write to your soon-to-be previous accountant. They’ll do this to request professional clearance from them. As we mention earlier, they’ll also ask for relevant handover information as part of the switchover process.

Final thoughts

When we look at how to change accountants there’s several factors to consider. Indeed, we highlight above what to think about when switching accountants. Once you do switch contractor accountant, you should be properly up and running with your new accountancy firm after a few weeks. As a result, they should be in an ideal position to look after your UK contracting affairs going forward.

As a final note, the best time to replace your company’s current accountancy firm with another one is at the start of a new financial year. Therefore, it’s good in this respect to plan ahead when you change accountant.

Link to Contractor Advice UK group on

LinkedIn    https://www.linkedin.com/groups/4660081/

Published On: January 4th, 2024 / Categories: Accountant, Member Only Articles, Other Guides /

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