How to Switch Accountant in the UK: Step-by-Step Guide

Why UK Business Owners Switch Accountants

Switching accountant is more common than people realise. A 2023 survey by Sage found that over a third of UK small businesses had changed their accountant in the previous three years. The reasons business owners give are consistent:

• Too expensive — the most common reason. Many firms raise fees by 10–15% per year without a corresponding improvement in service. After five years, a client paying £200/month is paying £350 for the same work.
• Unresponsive — emails unanswered for days, calls not returned, no proactive communication before deadlines. This is the second most frequently cited complaint.
• Missing or rushing deadlines — accounts filed late, Companies House penalties, last-minute requests for information that should have been prepared months earlier.
• No proactive advice — the accountant files what is put in front of them but never flags a tax-saving opportunity, a VAT registration trigger, or a payroll error.
• Business has outgrown the firm — the local sole-practitioner who handled a startup's first return is not always the right fit when the business is generating £500k and needs management accounts monthly.
• Found a specialist — a contractor switching to a firm that specialises in IR35, a landlord moving to a property-focused practice, or a UK business switching to an Indian CA firm to significantly reduce costs.

Whatever the reason, you are under no obligation to stay. There is no professional, legal, or HMRC requirement to give your accountant advance warning beyond your contractual notice period. You can start the switch today.

When Is the Right Time to Switch?

You can switch at any point in the year, but some times are cleaner than others:

If you are approaching a Companies House filing deadline, a VAT return due date, or the 31 January Self Assessment deadline, do not wait — start the switch immediately. A competent new firm will pick up mid-stream. Waiting until after a deadline while receiving poor service is worse than switching with weeks to spare.

How to Switch Accountant — Step by Step

The process is well-established in the UK accounting profession. Your new accountant will handle most of it once you have instructed them.

1. Find and instruct your new accountant first. Do not give notice to your old firm until your new firm is confirmed and ready to take over. Brief them on your business, the work involved, and any upcoming deadlines.
2. Review your engagement letter. Check the notice period and termination clause. Note whether there are any outstanding deliverables — for example, if accounts are mid-preparation, you may need to decide whether the old firm finishes them or the new firm starts from scratch.
3. Give written notice to your current accountant. An email is sufficient. Keep it brief and professional — you do not owe them an explanation. A simple "We have decided to move our accountancy arrangements to another firm with effect from [date]. Please treat this as our formal notice under the terms of our engagement letter" is all that is needed.
4. Your new accountant sends a professional clearance letter. This is a standard letter sent by the incoming firm to the outgoing firm, asking whether there are any professional reasons they should be aware of before acting for you. It is a regulatory requirement for ICAEW and ACCA members. The old firm must respond, usually within two weeks.
5. Transfer software access. In Xero or QuickBooks, invite your new accountant as an advisor (they will send you an invitation link). Remove the old accountant's access once the handover is confirmed. Your data remains intact — only the user access changes.
6. New accountant submits agent authorisation to HMRC. They will ask you to sign a 64-8 form (or complete the online equivalent via HMRC's agent authorisation service). Once HMRC processes this, your new accountant can access your tax records, file returns, and correspond with HMRC on your behalf. The old firm's authorisation is cancelled automatically.
7. Transfer payroll access if applicable. If the old firm ran your payroll, ensure all payroll software access is transferred and that all RTI submissions are up to date before the switch. The new firm will need your payroll history and employee records.
8. Settle any outstanding fees. Pay any invoices owed to your old firm promptly. An accountant's lien allows them to withhold documents if fees are unpaid — resolving this before you give notice avoids complications.
9. Request your records. Ask your old firm to return all original documents — bank statements, receipts, correspondence. Request working papers and a copy of your finalised accounts in PDF and any relevant accounting file formats. They are required to return originals; working papers are technically their property but professional practice is to provide copies.
10. Brief your new accountant thoroughly. Share your last two years of accounts, any ongoing HMRC correspondence, payroll history, VAT position, and any known upcoming issues. The better the briefing, the faster they get up to speed.

What Happens to Your Records When You Switch?

This is the question most business owners worry about unnecessarily. The short answer: your records are yours, and the transition is simpler than it sounds.

• Accounting software (Xero, QuickBooks, Sage, FreeAgent): The subscription is typically in your name or your company's name. Your data does not move — you simply remove the old accountant's advisor access and invite the new one. All historical transactions, VAT returns, payroll records, and reports remain in place.
• Original documents (receipts, bank statements, invoices): These belong to you. If you sent physical copies to your old accountant, request them back in writing. If you use a cloud document platform (Dext, Hubdoc, Google Drive), transfer access to the new firm directly.
• Filed accounts and tax returns: These are held at Companies House and HMRC — publicly accessible for company accounts. Your new accountant can access your HMRC record once agent authorisation is in place. You can also download copies from your HMRC online account at any time.
• Working papers: Schedules, draft accounts, and workings prepared by your accountant technically belong to the firm, not the client. However, ICAEW and ACCA guidance encourages firms to provide copies when requested. If your old firm refuses, your new accountant can reconstruct everything from your software and filed accounts.
• HMRC authorisation: Handled by your new accountant. They submit a 64-8 form and HMRC transfers agent access within a few weeks. In the interim, you can access your HMRC records directly through your Government Gateway account.

Cost Comparison — What Different Accountants Charge UK Small Businesses

One of the most common reasons for switching is cost. UK accountancy fees vary considerably depending on firm type, location, and whether you are working with a local practice or a specialist remote team. The table below shows typical monthly costs for a small business needing bookkeeping, VAT returns, payroll, and annual accounts:

For a small UK business currently paying £300/month to a local accountant, switching to an Indian CA firm providing the same bookkeeping and compliance services typically saves £1,500–£2,500 per year. Over five years, that is £7,500–£12,500 in savings for identical outputs.

The key question to ask any prospective accountant — UK or Indian — is what is included at the quoted fee and what triggers additional charges. Get a written scope before you commit.

What to Say to Your Old Accountant

Many business owners delay switching because they feel awkward about the conversation. It does not need to be uncomfortable. A professional firm will handle the transition without issue — this happens regularly in the industry.

The notice email can be brief. Something like:

You do not need to explain why you are leaving, name the new firm, or justify the decision. Keep it factual and professional. Settle any outstanding fees promptly — this keeps the handover clean and avoids any lien on your documents.

If you have already been with the same firm for several years, they may try to retain you with a fee reduction or promise of improved service. It is worth hearing them out, but do not let this delay a decision you have already made on sound grounds.

Frequently Asked Questions