Switching accountants can feel like a major task specifically when you don’t want to disrupt your business finances or miss any important deadline. A lot of entrepreneurs think that changing accountant is something that only occurs at the end of a financial year or tax period. The good thing is that this is not true. In the UK, you can switch accountant at any point of the year and in a lot of cases, changing accountant mid year is a smooth and straightforward process.
Whether you are not happy with your present accountant’s service or simply want an accountant who better understands your industry, there is no need to wait. This guide will discuss everything you need to know about changing accountant mid year that includes the process involved and common pitfalls you can avoid along with knowing how to make the transition as smooth as possible.
Why Might You Want to Change Accountant Mid-Year?
There are a lot of reasons why entrepreneurs decide to change accountants mid year instead of waiting until their accounting period ends. Some of the most known reasons include:
- Poor communication: If your is slow in replying to queries or fails to keep you updated, this can cause a lot of frustration and even result in missing deadlines.
- Lack of proactive advice: A good accountant should not just file your accounts but do more than that. If your present provider is not providing tax planning advice or helping you expand your business, it is high time you change your accountant.
- Rising costs: Accountancy fees can increase without a corresponding increase in the level of service provided. If you feel you are not getting value for money, switching could save you money.
- Business growth or changing needs: As your business expands or changes direction, you may need an accountant with more specialist knowledge, such as expertise in a particular sector or in international tax.
- Errors or compliance concerns: Mistakes in your accounts, missed filing deadlines, or concerns about the accuracy of advice given are all valid reasons to seek a new accountant promptly, rather than risk further issues.
- Relocation or digital service needs: You may want an accountant who offers cloud-based, remote services rather than one who requires in-person meetings.
Whatever your reason, it is entirely your right as a client to change accountant whenever you feel it is the right decision for your business.
Is It Actually Possible to Switch Mid-Year?
Yes, absolutely. There is no legal or regulatory requirement in the UK stating that you must wait until the end of your financial year, tax year, or accounting period to change accountant. Accountants are used to onboarding new clients at all stages of the year, and most reputable firms have a well-established process for managing handovers smoothly.
That said, timing can affect how straightforward the transition is. Changing accountant just before a major deadline, such as your Self Assessment tax return or Companies House filing date, can add a small amount of pressure, simply because your new accountant will need time to familiarise themselves with your records. However, with good planning and clear communication, even a last-minute switch can be managed effectively.
The Process of Changing Accountant Mid-Year
Changing accountant involves a few key steps. While the exact process can vary slightly depending on the firms involved, the general outline is as follows:
1. Choose Your New Accountant
Before you do anything else, take the time to research and select the accountant you want to move to. Look for a firm with relevant experience, transparent pricing, good client reviews, and a communication style that suits you. Many firms offer a free initial consultation, which is a good opportunity to ask questions and get a feel for how they work.
2. Inform Your Current Accountant
Once you have decided to move on, it is courteous and professional to notify your existing accountant in writing. You do not need to provide a lengthy explanation, though being honest about your reasons can sometimes be helpful. Most accountants are professional about this process and will not make it difficult for you, even if the news is disappointing to hear.
3. Professional Clearance
Your new accountant will typically send a professional clearance letter to your outgoing accountant. This is a standard step required by accounting bodies such as ICAEW and ACCA. It asks whether there is any professional reason why the new accountant should not accept the appointment, such as unresolved ethical issues or outstanding fees. This step protects both you and the accountants involved and ensures a transparent handover.
4. Transfer of Records and Information
Your outgoing accountant should provide your new accountant with all relevant records, including previous accounts, tax computations, working papers, and any other documents needed to continue managing your affairs. This is usually done electronically and should not require significant effort on your part, although you may be asked to grant permissions or confirm certain details.
5. Updating HMRC and Companies House
Your new accountant will need to be authorised to act on your behalf with HMRC, which is typically done through the Government Gateway using a form 64-8 or an online authorisation request. If your new accountant will also be filing your confirmation statement or annual accounts with Companies House, they will need appropriate authorisation there too. Your new accountant will guide you through this process, and it is usually quick to complete.
6. Settling Outstanding Fees
Before the handover is complete, you will need to settle any outstanding fees with your previous accountant. Some firms may withhold records until fees are paid, so it is worth checking your engagement letter or terms of business to understand your obligations.
Things to Consider Before Switching Mid-Year
While changing accountant mid-year is entirely possible, there are a few practical points worth thinking about beforehand:
- Check your engagement letter: Some accountants require a notice period or have specific terms around ending the relationship. Reviewing this document first can help avoid surprises.
- Consider timing around deadlines: If a filing deadline is imminent, discuss this with your prospective new accountant to make sure they have enough time to prepare.
- Gather your records: Having your financial records organised, even informally, can speed up the handover process considerably.
- Understand any exit fees: Some accountants charge for the time spent preparing handover information, so it is worth clarifying this in advance.
- Communicate clearly with both parties: Keeping both your old and new accountant informed throughout the process reduces the risk of miscommunication or delays.
Benefits of Switching Mid-Year Rather Than Waiting
Many business owners delay changing accountant simply out of habit or a belief that it is easier to wait until year-end. However, there are genuine advantages to making the change as soon as you decide it is the right move:
- Improved advice sooner: The earlier you switch, the sooner you benefit from better tax planning, cash flow guidance, and general business support.
- Avoiding further mistakes: If your current accountant is making errors, continuing to work with them increases the risk of ongoing compliance issues.
- Better relationship building: Starting the relationship with a new accountant earlier in the year gives them more time to understand your business before busy filing periods arrive.
- Peace of mind: If you are unhappy with your current service, waiting months longer than necessary only prolongs any frustration or uncertainty.
Choosing the Right Accountant for a Smooth Transition
A well-organised accountant will make switching mid-year feel effortless. When choosing a new provider, look for a firm that is experienced in managing client handovers, communicates clearly about the steps involved, and is proactive in liaising with your outgoing accountant and HMRC on your behalf.
Firms such as Lexarox Accounts are well versed in supporting businesses through the switching process, offering guidance at every stage so that you can hand over responsibility with confidence and minimal disruption to your day-to-day operations.
Conclusion
Changing accountant mid-year is not only possible, but often a sensible decision if your current arrangement is no longer serving your business well. With the right preparation, clear communication, and a new accountant who understands the handover process, the switch can be completed smoothly and with minimal disruption. If you are considering making a change, it is worth reaching out to a firm such as Lexarox Accounts to discuss your options and find out how they can support a seamless transition, whatever point in the year you decide to make the move.
Frequently Asked Questions
Can I change accountant at any time of the year?
Yes. There is no restriction preventing you from switching accountants whenever you choose. Most accountants are experienced in taking on new clients mid-year and will have a clear process to manage the handover efficiently.
Will changing accountant mid-year affect my tax deadlines?
Not necessarily, provided the switch is managed with enough notice. It is a good idea to discuss upcoming deadlines with your new accountant before finalising the move, so they can plan accordingly and ensure nothing is missed.
Do I need to tell HMRC that I am changing accountant?
You do not need to contact HMRC directly yourself. Your new accountant will handle the authorisation process, typically using a form 64-8 or an online agent authorisation request, so they can act on your behalf.
What is professional clearance and is it necessary?
Professional clearance is a standard letter sent by your new accountant to your previous one, asking if there are any professional reasons the appointment should not proceed. It is a routine part of the process and helps ensure a transparent and ethical handover.
Will I have to pay two sets of fees during the transition?
This depends on your agreement with each accountant. You will generally need to settle any outstanding fees with your previous accountant, and your new accountant’s fees will typically begin from the point they take over your affairs. Clarifying this in advance avoids confusion.
How long does it take to switch accountants?
The process can often be completed within a few weeks, depending on how quickly records are transferred and how promptly professional clearance is obtained. Straightforward cases can move even faster.
Can my old accountant refuse to hand over my records?
In most cases, accountants are professionally obligated to release your records once outstanding fees have been settled. If there are unresolved fee disputes, some firms may withhold certain documents, so it is worth checking your terms of engagement.
Is it unprofessional or awkward to leave my accountant?
Not at all. Changing service providers is a normal part of running a business, and professional accountants understand this. You do not need to feel guilty about making a decision that is right for your business.
