Changing your accountant needn’t be messy

For many freelancers and contractors finding a good accountant can be an arduous task. As a result, some small business owners end up employing the services of an accountant who turns out to be a poor fit for their needs.

Perhaps the accountant has too many clients and not enough time to respond swiftly to your enquiries, or maybe they’ve unfairly increased their fees to help compensate for an increase in their overheads. Or maybe they’re just generally inadequate.

There are a whole number of reasons why you might want to end the relationship. However, giving them the heave-ho is a big step to take – and nobody likes the process of separation. But when you know it’s the best thing for your business then it’s just something you have to do.

Severing your ties

When severing a relationship with a bean counter there are a few things to take into account.

First off, check the terms and conditions of your contract. Often there is a notice period you have to serve with an accountant before you can leave (and stop paying them).

If you’re working as a limited company, then your company accounts will be filed with Companies House leaving no problems for the transfer to a new accountant. But, if you’ve been working as a sole trader you have to personally ensure that all your company accounts are handed over to you. This should be done when your accountant receives final payment.

Note: Any accountancy connected to a professional body, will be obliged to handover your company accounts when all payments have been made – only industry cowboys would refuse!

When you’ve decided to move to a new number cruncher, it’s usually good practice to give your existing one notice. After this, your new accountant should deal with the finer detail…

A letter from your new accountant should be sent requesting the following information:

• Letter of resignation
• The most recent set of accounts prepared and submitted to HMRC
• Breakdown of company fixed assets
• Trial balance as of the last balance sheet date
• Reconciliation of Corporation Tax creditor
• Most recent copies of Corporation Tax documentation and CT600 prepared and agreed by HMRC and any agreed and amended assessments
• Bank reconciliation statement from the last balance sheet date
• Information on debtors and creditors for the most recent balance sheet date
• Outstanding correspondence with HMRC
• Photocopies of the last tax return and related documentation submitted on behalf of the directors
• Photocopy of the most recent Annual Return
• Statutory books and records including duplicates of forms 88(2), 288 and 287, Memorandum and Articles of Association and Certificate of Incorporation.
• Copies of the last P35 and P11D
• Copies of VAT returns
• Latest income tax assessments and any outstanding appeals or correspondence
• PAYE Inspector and reference.
• Any other relevant information

And with that, the process of separation is complete. As one hard-bitten accountancy insider told me: “Freelancers worry that it’s going to be like a messy divorce when in fact it’s more like a one night stand.”

Image by Tony Eccles ~ cc

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