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Switching Accountants 2024: Change Limited Company Accountant

Switching accountants

Switching accountants


As a UK contractor, you may look at switching accountants during your contracting career. There may be various reasons for deciding to move accountants. 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 switch contractor accountants. Therefore, an ideal search online would be for a great, experienced limited company contractor accountant. However, where should you begin when you investigate switching contractor accountants and searching for a new accountant for contractors? This guide will look at how to change accountants and discover the process when you move to some new professional accountants for contractors. What’s more, we’ll consider the switch my contractor accountant process and learn when you should move to a new accountancy firm.

At one time or another, many small business owners, including sole traders and limited company directors, will investigate how they can move accountants. When you’re the owner of a contractor limited company, you may feel the time has come for you to switch contractor accountants. As a result, you may ask if now is the right time to look at how to choose a new accountant for your business. Indeed, you may have 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 as attentive as they should be. As a result, you’re now looking into switching my contractor accountant. Therefore, what should you do when considering how to move accountants?

Initial thoughts on switching accountants as a contractor 

First thoughts

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

  • Good at what they do and have lots of experience.
  • Offer a good deal overall in terms of their fees.

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

Start your search for a new contractor accountant

If you can find a top limited company accountancy firm to look after you from the outset, that’ll be great. Indeed, it’ll be ideal to do this when you start running your own company. As a limited company contractor, you’ll find there are 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 you have set this up.

However, as a contractor, you may have had an accountancy firm for quite some time and are now looking at switching accountants. Therefore, when you investigate how to swap accountancy firms, please search for dedicated professional accountants. Moreover, when changing contractor accountants, it’d be wise to look for limited company accountants (UK) 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’d like to switch accountancy firms. As part of this, you must 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. Moreover, after you switch contractor accountants a few times, you may find the one who makes you happy. Let’s now take the time to find out how to switch accountants.

First steps in the process of how to change my contractor accountant 

Where’s the best place to start when you plan on switching accountants as a contractor?

When we look at how to replace your current accountancy firm, there are several things to consider as part of moving contractor accountant. Therefore, when you’re in the process of finding accountants, it’s good to find a firm that knows the contracting space. Indeed, it’s a great place to start when you’re looking to move accountancy firms. They should be able to guide you when you run your own contracting company. When moving accountancy firms, you should aim to find one qualified with one or more of the UK’s professional bodies. Moreover, they should provide a high level of service for you and your business.

When you undertake accountants switching, your new accountancy firm should send a letter of engagement ahead of looking after you in future. This letter will set out what you can expect as part of the service you’ll undertake in the future. Moreover, it’s best to have peace of mind that your newly chosen limited company accountant will take care of all your tax affairs and advise you accordingly.

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 will 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 many IT contractor accountant Moreover, many IT contractor accountants (UK) also look after many contractors who work in other industries.
  • Cloud-based accountants, which you can find online. If you choose one of the online accountants for contractors, they’ll manage your finances with online software. Moreover, an online contractor accountant may speak with you on the phone when you require this.

These are some initial starting ideas when switching accountants; however, finding someone specialising in looking after UK contractors is key. If your business is VAT registered, too, you should ensure the new firm is familiar with online digital accounting.

Your ideal new accountancy firm

When we research how to transfer accountants, you should look for one who has specialised knowledge. Indeed, this knowledge is in the UK contractor and small business areas. When we look at how to change your accountant, your new choice should 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 HM Revenue & Customs (HMRC) available exemptions and allowances for your business.
  • Suggest the best ways to extract your income from your company.

Something to watch out for when you move accountants 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 must use MTD-compliant software from 1 April 2022. If you’re using software with your current accountancy firm, a swap in accountants may mean switching accounting software. This will be the case if your new accountancy firm doesn’t use your existing software. Another point to watch out for is that your new accountancy practice will prepare and file your tax return on time and advise you accordingly.

Switching accountants as a contractor & which contracting areas should a new firm know about?

When you’re changing accountancy firms, there’s more to consider. As part of your search in 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 professionals are there who specialise in this area, that’ll suffice. Another important point is the accountancy professionals are good in their field. It’s key that they advise you on everything which affects you as a UK contractor. Therefore, when changing accountancy firms, the areas your choice of Specialist contractor accountants should know will include:

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

Furthermore, when you’re switching accountants, they should be able to advise you on what you can claim 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 on business, including when you can claim them.

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

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

When switching accountants, your new appointment should also help improve your cashflow and operate tax-efficiently. As a business owner, you can earn more if you operate efficiently.

Other tips on when you move to new accountants

This guide covers the process of how to move to a new professional accountancy firm. In addition to this article on moving accountants, please read our guide, which provides tax tips for UK contractors. This contains excellent and sound advice you should know when you have a business. Moreover, the guidance includes the latest advice for the best tax planning ideas.

For business taxes, please read our guide on limited company taxes. The filing dates for official documents and tax payments are another good read for a UK business owner.

How to change accountant & the process to follow

What should you do when you decide to leave your business accountant and find a new one?

What is the best way to change accountants as contractors or small business owners? First, if you decide to switch accountancy firms, 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 from the outset. They should also explain your responsibilities and what fees they’ll charge your business.

Your company may pay a monthly fee as part of your current service. If this is the case, 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 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.

Do your research when choosing a new accountant

If you decide you’d like to find a replacement accountancy firm, please do your research. This will involve finding a new one who fits your ideal requirements. You could start this process by viewing some forums on this subject. Moreover, 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 do you tell your accountant you are leaving? 

First steps as part of leaving your current firm

Let’s now look at how to leave your accountant. What should you do if you’re moving contractor accountants and they’ve yet to prepare your latest financial accounts? Will you expect your new business accountancy firm to prepare these as part of a new monthly fee? You must remember that in most cases, 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 move accountancy firms, planning for this is good.

It’s key to reiterate that unless you don’t mind paying an `extra fee,’ the best thing to do is ensure your present accountants prepare your latest set of accounts before or whilst you make the switch. Next, as part 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 to move to them shortly into your new financial year.

Contact your current accountant and tell them you are leaving

When the time is right to move accountants, you must contact your present accountancy firm and let them know you’re leaving. You should advise them of what work you expect them to do before leaving. Therefore, before officially Switching accountants, an e-mail to your current firm should suffice, although they may require a formal letter. As part of this, you should let your present accountancy firm know you’re moving to ABC Accountants. What’s more, it would be best if you informed them that the ABC firm will make contact 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 work you’ve paid for  

As we mentioned 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 pick up at a `clean edge’. What’s more, you can move accountancy firm mid-year if the need arises. Please note that this isn’t as straightforward as making the switch at the start of a new financial year.

What will your new accountancy firm require when switching accountants?

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 need your ID for money laundering purposes. You can supply a copy of your photo passport or photo driving license as part of this. Also, you must provide a copy of a recent utility bill which shows your home address. Furthermore, the new firm will require other details to make the handover as smooth as possible.

Your new business accountancy professionals will deal with HMRC going forward. Therefore, they’ll add your business to their HMRC agent account. As part of this, they’ll add the various company taxes for your company to assist. Moreover, they’ll do this for the company and you personally. This process can involve the completion of form 64-8. However, the accountant can request this via their HMRC account. Another option is to add them via your 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 to request professional clearance. As mentioned, they’ll ask for relevant handover information during the switchover process.

Final thoughts

Several factors are involved when considering how to change accountants. Indeed, we highlight what to think about when switching accountants above. Once you switch contractor accountants, 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.

Finally, 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 to plan ahead when you change accountant.

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