Switching Accountants

Even though switching accountant is not a tedious or lengthy process, it is advisable to follow mandatory steps in order to have a smooth switching between the current and new accountant, such as:

• Inform your current accountant: It is always good to be on the fair side and inform your accountant well in advance regarding his termination. Doing so will help you both in a way. If you give ample time or time as per the agreement to the accountant to find an alternative job for him, it will help you to end the terms on a good note and thus make the switching process smooth. Also you must allow your old accountant to speak to your new one because it is the former one who needs to handover the paperwork if any. It is always better to call your accountant to your office and tell him about his replacement. However, if you do not wish to have this unpleasant conversation, you can always inform him by writing an email to him, unless a handwritten letter is a mandatory mode of communication. Also, you need to mention any kind of expectation related to work which previous accountant need to deliver before he or she is discharged from duty.
• Disengagement letter: In order to have a smooth switching your previous accountant needs to give a disengagement letter, which is considered as a professional document and has details of all the work completed by him, including key details and information. You must need to get the below mentioned information and details before the exit of your previous accountant:
  • Full financial statements with detailed profit and loss accounts.
  • Bank reconciliation in respect of all accounts.
  • Summaries of stock and work in progress.
  • A copy of the Corporation Tax computations.
  • Analyses of fixed assets, trade debtors, bad debt provisions, other debtors’ prepayments, trade creditors, accruals, other creditors and capital account movements.
  • Form CT620 issued by HMRC in respect of the last accounting period.
  • Any information which affects the company’s future liability.
  • A copy of the most recent CT600 submitted, together with any supplementary pages.
  • Confirmation of disengagement sent by the accountant.
  • Records of IR35 assessments conducted for all assignments in the last 6 years. (Please note we provide in-house IR35 reviews)
• Professional clearance letter: This is the letter which the new accountant needs to write to the previous one informing the later one regarding his selection as new accountant of the firm. In this letter, the new accountant will ask for professional clearance and request any relevant paperwork and also the possible reason why you have not continued with the previous accountant. Professional clearance letter is a formality which needs to be done while switching accountants and it is better to expect an invoice from your old accountant against this service.
• Registration with new accountant: In order to understand your company better, your new accountant will send you certain forms to capture your personal and company information. In addition to this, he is legally binded to conduct anti-money laundering check on you and your limited company and in order to have so, he will ask you to provide your passport or driving license together with a recent utility bill.
• Letter of engagement: The new accountant is required to send you a letter of engagement, which is also a professional document like disengagement letter stating his sets of expectations and requirements. This is an important part of switching process because in its absence, both the parties are not sure of what to expect and what to deliver.
• Assigning authority: In order to authorize your new accountant to deal with HMRC on your behalf, for both personal and company tax affairs, you are required to sign a new 64-8 form. You can also use the HMRC’s online authorization service to assign authority