Changing accountants should not interrupt your bookkeeping, payroll, VAT reporting or tax compliance. A well-managed handover gives your new accountant enough information to understand your business, check the opening balances and continue working without rebuilding years of records.
Problems often arise when information is stored across several systems, key reconciliations are unfinished or nobody has clearly recorded which returns have been submitted. Missing documents can lead to duplicated work, additional fees and uncertainty over whether important deadlines have been met.
Working with experienced business accountants Manchester companies can rely on can help you plan the transition and identify what needs to be transferred. Your objective should be to give the incoming accountant a complete, accurate and clearly organised financial history.
This matters across a large part of the UK economy. There were approximately 5.69 million private sector businesses in the UK at the start of 2025, including 5.64 million small businesses. SMEs generated an estimated £2.83 trillion in annual turnover. Reliable financial records are therefore essential to millions of owners managing tax, cash flow and compliance obligations.
Confirm the handover date and responsibilities
Begin by agreeing the date on which your outgoing accountant’s responsibilities will end and your new accountant’s work will begin.
The handover should make clear who is responsible for:
- Completing the current bookkeeping period
- Preparing the next VAT Return
- Running payroll and submitting PAYE information
- Preparing annual accounts
- Filing the Company Tax Return or Self Assessment return
- Responding to existing HMRC correspondence
- Producing management accounts
- Dealing with Companies House filings
Do not assume that the new accountant will automatically take responsibility for every outstanding task. Ask both firms to confirm their responsibilities in writing, particularly where a filing deadline falls close to the changeover date.
Your outgoing accountant may also issue a disengagement letter explaining the services that have ended, the effective date and any work that remains incomplete. ICAEW guidance describes issuing a disengagement letter as good practice when a client moves to another accountant.
Arrange professional clearance
Your incoming accountant will normally contact the previous firm through a professional enquiry, sometimes called professional clearance. This allows the new accountant to ask whether there are any relevant circumstances they should consider before accepting the appointment.
You will usually need to authorise your previous accountant to respond and disclose relevant information.
The process is not intended to stop you from changing firms. ICAEW confirms that clients have the right to choose and change their accountants. Its ethical guidance also requires outgoing ICAEW accountants to deal promptly with reasonable requests for the transfer of records, subject to issues such as record ownership and any valid right of lien.
You should settle any valid outstanding invoices or discuss disputed fees promptly. A fee disagreement can complicate the transfer, although the ownership of individual records and working papers will depend on the nature of each document.
Transfer the bookkeeping records
The incoming accountant will need the bookkeeping records up to the agreed handover date. Depending on your systems, the transfer may include:
- A complete accounting software file or subscription access
- The nominal ledger and chart of accounts
- A detailed trial balance
- General ledger reports
- Sales and purchase ledger reports
- Journal entries and supporting calculations
- Bank reconciliation reports
- Copies of invoices, receipts and credit notes
- Expense claims and mileage records
- Cashbook and petty cash records
Ask for the records in a usable digital format rather than relying only on PDF summaries. Your new accountant may need to examine individual transactions, amend coding or import opening balances.
Where you use cloud accounting software, make sure the incoming firm receives appropriate adviser access. Avoid sending shared usernames and passwords by ordinary email. Create separate user access with suitable permissions and remove the outgoing firm’s access once the handover has been completed.
Provide completed bank reconciliations
Every bank account, credit card and payment platform should be reconciled up to a clearly stated date.
The handover should contain:
- The closing balance shown in the bookkeeping system
- The corresponding bank statement balance
- A list of outstanding payments and receipts
- Details of unidentified transactions
- Copies of relevant bank statements
Include business savings accounts, foreign currency accounts, merchant accounts and platforms such as PayPal or Stripe.
If the bank statement shows £42,000 but the accounting system shows £47,000, the £5,000 difference must be investigated. Carrying an unexplained difference into the new accountant’s records could distort your cash position and future financial reports.
Include customer and supplier balances
Provide detailed aged receivables and aged payables reports. These show how much customers owe you, how much you owe suppliers and how long each balance has remained outstanding.
The handover should identify:
- Overdue customer invoices
- Disputed debts
- Payments received but not allocated
- Expected credit notes
- Bad debts that may need writing off
- Supplier balances under dispute
- Bills received but not yet entered
Your new accountant should be able to agree the total debtor and creditor balances with the trial balance. Old amounts should be explained rather than transferred without review.
Transfer previous accounts and tax returns
Your new accountant needs enough historical information to understand how earlier figures were prepared.
Provide copies of:
- Annual statutory accounts
- Company Tax Returns and tax computations
- Self Assessment returns where relevant
- Partnership returns
- VAT Returns
- PAYE reports and year-end submissions
- Capital allowance calculations
- Management accounts and forecasts
- Correspondence relating to HMRC enquiries
Include confirmation of whether liabilities were paid and details of any payment arrangements. Your accountant should also receive information about carried-forward trading losses, capital losses, tax credits and claims that may affect future returns.
Limited companies must generally retain accounting records for six years from the end of the financial year to which they relate, with longer periods applying in some circumstances. VAT records must also generally be kept for at least six years.
Provide payroll and pension information
Where you employ staff, the handover must allow payroll to continue without delaying wages or submitting incorrect information to HMRC.
Include:
- Employee names and payroll identifiers
- Year-to-date pay and deduction figures
- Tax codes and National Insurance categories
- Salary, overtime and bonus arrangements
- Benefits and statutory payment information
- Payroll submission records
- Amounts owed to HMRC
- Workplace pension details
- Outstanding holiday pay information
Personal employee information must be transferred securely and only to authorised people. Agree whether the outgoing accountant will run the final payroll period or whether the incoming firm will take over immediately.
Explain VAT arrangements
Your bookkeeping handover should clearly state whether you are VAT registered and which accounting method or scheme you use.
Provide:
- Your VAT registration number
- VAT Return periods and deadlines
- The date of the last submitted Return
- Copies of submitted Returns
- Details of VAT payments or repayments
- Your Making Tax Digital software arrangements
- Any partial exemption or reverse charge issues
- Outstanding VAT corrections
The VAT control account in the bookkeeping records should agree with the latest Return and subsequent transactions. Any difference should be reconciled before the handover is treated as complete.
Include fixed assets, loans and director balances
Provide a fixed asset register showing the original cost, purchase date, depreciation and current book value of equipment, vehicles, property and other assets.
You should also transfer:
- Loan and asset finance statements
- Repayment schedules
- Lease agreements
- Hire purchase documents
- Director’s loan account details
- Dividend documentation
- Shareholder and ownership information
Explain significant balances. For example, if your director’s loan account shows that you owe the company £18,000, the incoming accountant needs to understand how the amount arose and whether any related tax deadlines apply.
Update HMRC agent authorisations
Your new accountant will need authority to communicate with HMRC and manage the relevant taxes on your behalf.
Authorisations may be needed separately for services such as:
- Corporation Tax
- Self Assessment
- VAT
- PAYE
- Making Tax Digital
HMRC states that when you appoint a replacement tax agent, a new authorisation request normally replaces the existing authority for that service. You can also manage or remove an agent’s authority through the relevant tax account.
Do not wait until a filing deadline to complete this step. Authorisation delays may prevent the new accountant from seeing previous submissions or communicating with HMRC.
List outstanding work and upcoming deadlines
Finish the handover with a written schedule of unresolved matters and future deadlines.
This should include:
- Unfiled accounts or returns
- Bookkeeping queries awaiting answers
- HMRC correspondence requiring a response
- Tax payments becoming due
- Companies House deadlines
- Payroll submission dates
- VAT filing dates
- Ongoing finance applications or business valuations
Making Tax Digital for Income Tax began on 6 April 2026 for qualifying sole traders and landlords whose relevant income exceeded £50,000. The threshold is due to fall to £30,000 from April 2027 and £20,000 from April 2028, so relevant digital records and software access should form part of the handover.
Make sure the handover is complete
Before closing the process, ask your new accountant to confirm that the records are usable and that opening balances agree with the previous accounts. Keep your own copies of important documents rather than relying entirely on either firm.
U&W Chartered Accountants can manage the transition from your previous accountant, review the bookkeeping records and identify missing information before it affects your tax reporting. Contact U&W today to arrange a structured accounting handover and give your business a clearer start with its new adviser.
