People stay with an accountant they are unhappy with for years because they assume switching is difficult, that their records are somehow held hostage, or that it has to wait for a year end. None of that is true. Changing accountant is a routine process with an established etiquette between firms, it takes about two weeks, it can happen at any point in the year and it should cost you nothing. This guide explains what happens, what you are entitled to and how to avoid the few things that can go wrong.
Reasons people switch
The reasons we hear most often are surprise invoices, where the fee turned out to be an hourly bill rather than the figure quoted; missed deadlines and the penalties that followed; accounts delivered without any explanation of what they showed; slow or no responses to questions; an accountant who has retired, merged or stopped answering; and a business that has grown beyond what the current firm handles. Less often, people switch because the accountant was right about something they did not want to hear, which is worth being honest with yourself about.
What you are entitled to
Your records are yours. Bank statements, invoices, receipts, copies of returns that have been filed, your accounts, your payroll records and the data in your accounting software belong to you, and the outgoing accountant must return or provide them. What they may hold until their fees are settled is their own working papers: the schedules and analysis they prepared in doing the work. In practice the information you need to continue is in the filed documents and the software, and a firm cannot stop you leaving by withholding its working papers.
Agent authorisations with HMRC and Companies House are yours to grant and remove. The new firm applies for authorisation through HMRC's online services, HMRC sends you a code or asks you to approve through your Government Gateway, and the authorisation transfers. The old firm's authorisation can be removed by you at any time.
Professional clearance
When you appoint a new accountant, they write to your current one asking whether there is any professional reason they should not accept the appointment, and requesting your records and information about the current position: the last accounts and returns filed, any work in progress, capital allowance pools, losses carried forward and anything outstanding with HMRC. This is called professional clearance. The outgoing firm is expected to respond promptly, and most do within two weeks. A firm that does not respond, or says there is a reason not to act, is rare, and usually it is about unpaid fees, which you should settle or dispute directly.
Timing
You can switch at any time. The idea that it must wait for a year end comes from a concern about work in progress: if your accounts are half-prepared, someone has to finish them, and the outgoing firm will charge for what it has done. The practical answer is to agree who completes the current filing. If a deadline is imminent, it is often simplest to let the current firm finish it and switch immediately afterwards. If nothing is in progress, there is no reason to wait. Monthly services such as bookkeeping, payroll and VAT transfer at a month end with the year-to-date figures handed over.
What transfers and what does not
Transfers: your records, the filed accounts and returns, the opening balances for the next period, the capital allowance pools, losses carried forward, your software subscription and data if it is in your own name, agent authorisations once re-granted, payroll year-to-date figures and pension scheme details. Does not transfer: the old firm's working papers, any engagement with the old firm which you end by giving notice under its terms, and any fee dispute, which stays between you and them.
If your software subscription is in the accountant's name rather than yours, which some firms arrange, ask for the data to be exported in full before you leave, or for the subscription to be transferred to you. This is the one place where leaving can be awkward, and it is avoidable by keeping subscriptions in your own name from the start.
What it should cost
Nothing from the new firm; the clearance letter, the record transfer and the agent authorisation are part of taking you on. The old firm may invoice for work done to date on anything in progress, which is legitimate if the work was done, and for nothing else. A charge for "releasing" records or a penalty for leaving is not something a reputable firm levies.
Giving notice
Check the old firm's terms for the notice period, typically a month for ongoing services. Give notice in writing, say the date you want the engagement to end, confirm what if anything they should complete first, and ask them to expect the clearance letter from the new firm. Keep it factual; a dispute about service is better raised separately and does not need to delay the switch.
Choosing the next firm
Ask how fees are set and whether they are fixed. Ask how deadlines are tracked and what happens if records arrive late. Ask who you will deal with and how quickly they respond. Ask to see an example of how they explain a set of accounts. Ask what happens if you want to leave. A firm that answers all five clearly is unlikely to give you the reasons people switch in the first place.
Switching to us
Our small business packages include a £99 switching health check that reviews your current accounts, returns, VAT, payroll and software before you decide, refunded in the first month if you join. We send the clearance letter, collect your records, transfer the authorisations and pick up the next filing without a gap. There is no charge for the switch and you can leave us with a month's notice. Use the deadline finder to see what is due around the time you plan to move.
A worked example
A cafe owner on a monthly bookkeeping and VAT arrangement decided to switch in July, with a VAT quarter ending 30 June and accounts for the year to 31 March not yet started. The new firm sent a clearance letter on 8 July. The old firm filed the June VAT return by 7 August as agreed, since the records were already with them, handed over the bookkeeping file, the VAT return workings and the previous year's accounts on 20 July, and invoiced for the June return. The new firm took over the bookkeeping from 1 August, applied for agent authorisation for VAT, PAYE and Self Assessment in the same week, and started the March year-end accounts in September. The owner's cost of switching: nothing beyond the old firm's fee for the June return, which would have been payable anyway.
Questions to ask yourself first
Is the problem the firm or the arrangement? An hourly-billing firm that gives good advice may be worth keeping on a fixed fee if they will offer one. Is the problem that you did not send records on time, which no accountant can fix? Have you told the current firm what is wrong? Most will respond, and if they do not, the decision is made. Switching to escape a disagreement about what the law requires is rarely wise; the law will be the same at the next firm, and a good one will tell you the same thing more clearly.