Changing Accountants: How to switch accountants
Switching your limited company accountant can seem like a daunting task, but with the right approach, it can be a smooth and beneficial transition for your business. Whether you're looking for better service, more competitive fees, or a specialist in your industry, changing accountants is a decision that requires careful consideration and planning.
As a contractor, your accountant plays a crucial role in managing your finances, ensuring compliance with tax regulations, and helping you make informed business decisions. However, there may come a time when you need to reconsider your accountant to better align with your evolving needs.
Why You Should Consider Changing Your Accountant
There could be various reasons due to which you may be thinking of changing your accountant. It could be due to:
- Lack of commnunication: Often an underrated point, we have come across many who have switched their accountants due to lack of communication. Communication is key and accountants some times underestimate the importance of proper communication. They don't communicate with their clients on times, resulting in missed deadlines and penalties. Good communication is vital for the financial health of the business.
- Lack of Expertise: This is another major reason for the switch. As the business grows, so do its requirements. You may require a more experienced, skilled, and expert accountant. If your accountant doesn't evolve with time, your business's financial health will suffer, prompting the switch
- Fees: Fees play a vital role when choosing or retaining an accountant. It could be that your accountant is charging more for the same set of services as other accountants, and you may not be getting value for money.
- Missing Deadlines: This is something no one should compromise on. If the accountant is consistently missing deadlines, it is crucial to switch accountants. Missing deadlines can severely impact your business's financial health.
- Technology: In today's world, it is essential to have access to your business's financial records 24/7, and technology helps us achieve that. If your accountant does not use the latest technology or software, this could be a strong reason to switch accountants.
Step-by-step guide on how to switch contractor accountants in the UK
- 1. Assess Your Current Situation: Before making any decisions, evaluate why you are considering switching accountants. Are you dissatisfied with their service, or do you require more specialised expertise? Make a list of what you expect from a new accountant to ensure your needs are met.
- 2. Research Potential Accountants: Utilise resources such as professional associations (e.g., ACCA, ICAEW), referrals from colleagues or industry peers, and online reviews to identify potential new accountants. Consider factors such as their experience with contractors, services offered, and fees.
- 3. Arrange Initial Meetings: Contact the accountants you are interested in and schedule initial consultations or meetings. This is an opportunity to discuss your requirements, assess their suitability, and ask relevant questions such as their familiarity with contractor-specific tax laws and regulations.
- 4. Review Engagement Terms: Obtain engagement letters or contracts from your shortlisted accountants detailing the services they will provide, fees, and any other terms and conditions. Ensure these documents are clear and align with your expectations.
- 5. Notify Your Current Accountant: Once you have chosen a new accountant, inform your current accountant of your decision to switch. Provide them with written notice and request the transfer of your accounting records and any necessary documentation to your new accountant.
- 6. Transfer Your Accounting Records: Once you have notified your old accountant about the switch, you need to provide authority to act on your behalf to your new accountant and coordinate with both your current and new accountant to facilitate the smooth transfer of your accounting records. This may include financial statements, tax returns, payroll information, and any other relevant documents.
- 7. Update HMRC and Companies House: Notify HMRC (HM Revenue & Customs) and Companies House of your change in accountant details. This ensures that all future correspondence and filings are directed to your new accountant. Your new accountant will require you to sign Form 64-8, which informs HMRC that they will be representing your company. If you have access to your HMRC business tax account, you might need to add the new accountant to manage Corporation Tax, PAYE, and VAT on your behalf. You may also need to wait for HMRC to send codes to your registered office address before access is granted.
- 8. Monitor the Transition: Stay actively involved during the transition process to ensure that all your financial information is accurately transferred and that there are no disruptions in your accounting services.
- 9. Evaluate the Transition: After a few months of working with your new accountant, evaluate whether they are meeting your expectations in terms of service quality, responsiveness, and value for money. Address any concerns promptly to maintain a positive working relationship.
- 10. Maintain Communication: Regularly communicate with your accountant to keep them informed of any changes in your business or financial circumstances. This proactive approach helps them provide tailored advice and support.
Accountant Change Notification Letter Template
You can download our free Accountant Change Notification Letter Template in both DOCX and PDF formats for personal use. Feel free to customise the template to suit your specific needs. We hope it simplifies the process and makes the transition smoother for you!
Download Accountant Change Letter Template (DOCX)
Download Accountant Change Letter Template (PDF)
How long does it take to switch accountants?
Changing accountants usually takes 1 to 2 weeks at most. However, delays can occur if your current accountant slows down the process. If this happens, you can request an explanation from your previous accountant, as they are obligated to provide one.
Your old accountant has to provide all the necessary documents and tax returns to your new accountant. They cannot deny it, however, they can delay. Even if they don't, your new accountant should still be able setup your account and get things going.
Switching an accountant requires careful planning and execution to minimise disruptions to your business operations. By following these steps and choosing an accountant who understands the unique needs of contractors, you can ensure a successful transition that supports your business growth and compliance requirements.
Our Recommended Limited Company Accountants
Below is our list of our recommended contractor accountants. These are highly trusted accountants for contractors.
At CCM | Carter Collins & Myer, we provide top-tier accountancy and tax advisory services for UK contractors and freelancers. Our fixed packages, starting at £75 per month, cover all your financial needs, allowing you to focus on business growth.
We offer personalised service, from consulting to complex tax issues, ensuring excellent rates and quality. With extensive industry experience, our expert team supports you every step of the way. Choose CCM for a partner who understands your unique challenges.
Business owners, freelancers and the self-employed all benefit from choosing DASA Accountancy to manage their financial affairs, tax obligations and personal earnings. We specialise in helping businesses and individuals maximise their commercial potential, utilising fully compliant accountancy services and our in-house commercial experience and expertise.
Affordable accountancy packages to help our clients keep up-to-date with all their financial responsibilities, starting from just £50.00+VAT per month. DASA Accountancy is an award-winning accountancy practice committed to supporting all our clients.
RM Accountancy Services specialises in the provision of accountancy and tax advisory services for contractors and freelancers all over the UK.
We provide low cost fixed packages for contractors and freelancers. Our most popular package takes care of all your needs while you take care of your business from £75 per month.
Remember, the right accountant should not only manage your finances efficiently but also add value to your business through proactive advice and support tailored to your industry and goals.
