A lot of guides on how to choose an accountant stop at qualifications. That is not enough for a small business. Anyone in the UK can call themselves an accountant. The title has no legal protection, so you need to check the basics yourself.
This guide gives you the checks and the questions to ask. Each one works on any firm, including ours. Most of them you can run before you pick up the phone.
Quick Answer
Before you hire an accountant, check five things. Membership of ACCA, ICAEW, ICAS or CIMA, checked on that body’s own register. HMRC agent registration. Anti-money-laundering supervision. Professional indemnity insurance. And a named person for your work. Price matters, but it comes last.
General guidance only. Your own situation may need specific advice from a qualified accountant.
How Do You Check an Accountant Is Really Qualified?
Ask for the letters after their name and the membership number. Then check it yourself on the professional body’s own register. ACCA, ICAEW, ICAS and CIMA all publish one. Checking takes two minutes. A member needs a practising certificate to run a practice.
The word accountant has no legal protection in the UK. Anyone can print it on a card. The letters after the name are what carry weight.
Look for ACCA or FCCA from the Association of Chartered Certified Accountants. Look for ACA or FCA from ICAEW. Scotland has ICAS, and its members use CA. CIMA members use ACMA or FCMA. AAT sits below these. AAT members often work as bookkeepers.
Ask for the membership number. Then check the ACCA member directory or the same tool at the other bodies. It takes two minutes. A firm hesitating here has already told you something.
Membership alone is not enough. A member needs a practising certificate to run a practice. That is separate from membership. Ask if the firm holds one. Ask which body regulates the firm, not just the individual.
Is the Firm Registered With HMRC as a Tax Agent?
Ask if the firm is set up with HMRC as an agent. Agents file your returns and speak to HMRC on your behalf. You sign an authorisation form before that starts. Without that authorisation, every HMRC query comes back to you instead.
HMRC lets you appoint someone to act for you. You can authorise an agent to deal with HMRC online or on a paper form. The paper version is the 64-8.
For Self Assessment, HMRC then sends correspondence to your accountant. Tax bills and refunds still come to you. That split catches people out.
Ask two things. Does the firm hold an HMRC agent code? Will they set up your authorisation as part of onboarding? A firm with no agent code cannot file your returns under its own credentials.
What Is AML Supervision and How Do You Check It?
Every UK accountancy practice needs anti-money-laundering supervision, from its body or HMRC. HMRC publishes a Supervised Business Register you can search. A firm supervised by ICAEW or ACCA won’t appear there. So a blank result is not proof of a problem.
Money laundering rules cover accountancy and tax work. A practice needs a supervisor before it takes clients. Most firms get this through their professional body. Some get it from HMRC instead.
You can search HMRC’s Supervised Business Register yourself. It lists the registration number, business name and trading name. It also shows part of the postcode and the sectors covered.
Here is the part most guides skip. The HMRC register only holds firms HMRC supervises. An ICAEW or ACCA firm sits on its body’s register instead. So use the register the right way round. Search it. If the firm is not there, ask which body supervises them, then check that body.
A firm with no supervisor at all is breaking the law. That is the answer you’re testing for.
Does the Firm Hold Professional Indemnity Insurance?
Ask for the insurer and the cover limit in writing. Professional indemnity insurance pays out if the firm’s advice costs you money. Members of ACCA, ICAEW, ICAS and CIMA have to hold it. An unregulated bookkeeper often holds none at all.
Professional indemnity insurance covers mistakes. Wrong advice, a missed election, a late filing caused by the firm. The policy pays your loss, up to its limit.
The professional bodies make their members hold this cover. That is one more reason the membership check matters.
Ask for the cover limit. Compare it against the size of a bad year for you. A firm handling a £2m turnover business needs more cover. One doing sole trader returns needs less.
What Happens If Your Accountant Gets It Wrong?
You still owe HMRC the tax, and that does not change. Penalties and interest from their mistake are a different question. If the firm caused a penalty, ask them to pay it. Their insurance covers this, and their professional body handles complaints.
HMRC holds you responsible for your own return. Signing it means you say it is correct. An accountant’s error does not move that responsibility.
What it does move is the money. A firm can be liable for your loss. Late filing, a missed claim, wrong advice. That is what the insurance is for.
Ask, in the first meeting, what happens if they get something wrong. A good firm answers this without going quiet.
Complaints go to the professional body. ICAEW, ACCA, ICAS and CIMA all run a complaints process for members. An unregulated firm gives you no route at all. Your only option there is court.
Who Will Actually Do Your Work?
Ask for a name, not a team name. Find out who prepares your accounts and who reviews them. Some firms sell you a partner, then hand the file to a junior. Then ask what happens when that person leaves the firm.
The person in your sales call often is not the person doing your books. That is normal in bigger firms. It only becomes a problem when nobody tells you.
Ask three questions. Who prepares my accounts? Who reviews and signs them off? Who do I email with a quick question?
Also ask about the work itself. Some firms send bookkeeping offshore. Others keep it in house. Neither is automatically wrong. You just need to know before you sign, not after.
Does Small Business Experience Matter?
Yes, it matters a lot. A firm doing big company audits all day will not know CIS deductions well. Small business tax and filing rules are their own specialism. Ask how many clients they have like you, and ask for references.
Sector knowledge saves you money in real ways. A construction firm needs CIS handled properly. A landlord needs the finance cost restriction applied right. An online seller needs VAT on distance sales sorted.
Some practices focus on audit and big company work. Others work as accountants for small businesses and see sole traders every week. The second group already knows the reliefs you can claim.
Ask for the client mix. How many sole traders? How many small limited companies? How many landlords? If your business type barely shows up, keep looking.
What Software Should Your Accountant Use?
Cloud software built for Making Tax Digital. Ask which package they use and whether you get your own login. Ask if the data stays yours when you leave. A firm keeping your records in a spreadsheet will slow you down.
Making Tax Digital changed what software an accountant needs. Sole traders and landlords over the income threshold now keep digital records. They also send quarterly updates to HMRC. Paper and spreadsheets alone do not meet that.
Ask which cloud package the firm uses. Ask whether the licence sits in your name or theirs. That second one matters. If the licence is theirs, moving firms gets messy.
Ask about bank feeds too. A live bank connection cuts your bookkeeping time a lot. It also stops the year-end scramble for statements.
How Much Should Price Affect Your Choice?
Less than most people think. A price only means something once the scope is identical. Get two quotes covering the same list of filings, then compare. The cheapest quote often leaves out payroll, VAT or the director’s own tax return.
Fees range widely across the UK market. Structure matters as much as the number. A fixed monthly fee makes budgeting simple. Hourly billing means every question adds to the bill.
We cover the numbers properly in a separate guide on how much an accountant costs. Read that when you’re comparing quotes. Then come back to the checks in this article, because they matter more.
Do You Need an Accountant or a Bookkeeper?
A bookkeeper records what happened. An accountant tells you what it means and files it with HMRC. Most small businesses need both jobs done properly. The split decides your fee. Check whether the quote covers daily records as well as the year end accounts.
Getting this wrong costs money twice. You pay accountant rates for simple data entry. Or you pay a bookkeeper for advice they cannot give.
A separate guide sets out what bookkeeping and accounting each involve. Read it before you agree a scope. Then ask the firm which tasks sit on which side.
Should You Split the Work With Your Accountant?
Decide who does the bookkeeping before you ask for a quote. Doing your own entry lowers the fee but costs your time. Handing it all over costs more and saves your evenings. Write the split down, because a vague split becomes an argument later.
Two firms can quote very different prices for the same business. Usually the scope is different, not the rate. The bookkeeping split is the biggest single cause.
Work out your own position first. Are you happy coding bank transactions each week? Do you want someone else to file your receipts? Will you chase your own unpaid invoices?
Then put the split in writing. Who codes the bank feed. Who raises sales invoices. Who chases debtors. Who runs payroll. Who files the VAT return. Every line either sits with you or with them.
A firm refusing to write this down is quoting on hope.
Online Accountant or Local Accountant?
Cloud software made location much less important than it was. Pick local if you want face to face meetings and paper handling. Pick online if you want lower fees and faster email replies. Ask about response times either way, and get it in writing.
The old rule said use someone nearby. Bank feeds and shared logins killed that rule. Your accountant can see your books from anywhere in the UK.
Local still helps in some cases. You have boxes of paper receipts. You want someone in the room for a hard conversation. You want local knowledge of your area.
Online firms usually cost less. They also work at scale, so ask how you avoid becoming a ticket number. Ask for a named contact and a stated response time.
What Questions Should You Ask Before You Hire?
Ask these twelve questions and write down the answers. Cover qualifications, HMRC agent status, AML supervision, insurance and who does the work. Then cover scope, software, fees and response times. Compare at least three firms on the same twelve answers.
- Which professional body are you a member of, and what is your membership number?
- Does the firm hold a practising certificate?
- Are you registered with HMRC as an agent?
- Who supervises the firm for anti-money-laundering?
- Who is your professional indemnity insurer, and what is the cover limit?
- Who will prepare my accounts, and who reviews them?
- How many clients do you have like my business?
- Which cloud software do you use, and whose licence is it?
- Exactly which filings does the fee cover?
- What costs extra, and how much?
- How fast do you reply to email?
- What happens if you make a mistake on my return?
Take notes. Clear answers to all twelve usually point to the right firm.
What Are the Red Flags When Choosing an Accountant?
No membership number and no engagement letter are the two big ones. Vague answers about fees or about who does the work come next. So does a promised refund figure before they have seen your books. Any one of these is a reason to walk away.
- No membership number, or a refusal to give one
- No engagement letter, or one arriving after you pay
- A quote with no list of what it covers
- A refund promise made before they see your records
- No answer on who supervises them for money laundering
- Slow replies during the sales stage
- Pressure to sign the same day
- Fees quoted only as an hourly rate for ongoing work
Slow replies before they have your money tell you the most. That is the firm at its most attentive. It rarely improves later.
What Happens After You Choose?
You get an engagement letter setting out scope, fees and responsibilities. You sign HMRC authorisation so the firm can act for you. Your old accountant sends professional clearance and your records. Give the new firm your last accounts and any open HMRC letters.
Read the engagement letter properly. It sets what the firm does and what stays with you. Push back on anything vague before you sign.
Switching firms is easier than people expect. Your new accountant writes to the old one for clearance. Ask the old firm to hand over your records. Settle any unpaid fees first, or the handover stalls.
Give the new firm a clean start. Last set of accounts. Last two tax returns. Bank statements and bookkeeping records. Any open HMRC correspondence. Details of anything changing soon, like new staff.
Run these checks on us as well. Get a quote and we’ll send you our current pricing. Talk to the team at DASA Accountancy about your business.
Written by Raqeeb Marzook, ACCA. Manager at DASA Accountancy.
This article gives general information about choosing an accountant in the UK. It is not financial, tax, or legal advice. Every business is different. Speak to a qualified accountant about your own situation.
FAQs
How do I check an accountant is qualified in the UK?
Ask for the letters after their name and their membership number. Then check it on the professional body’s own register. ACCA, ICAEW, ICAS and CIMA all publish a member search. Also check the firm holds a practising certificate, not just membership.
What are the red flags when choosing an accountant?
No membership number, no engagement letter, and vague answers about fees or about who does the work. A promised refund figure before they have seen your books is another. So is pressure to sign the same day.
Does my accountant need to be registered with HMRC?
A firm acting for you needs an HMRC agent code, and you need to authorise them. You can do this online or on the paper 64-8 form. After that HMRC sends correspondence to your accountant, though tax bills and refunds still come to you.
How much should an accountant cost in the UK?
Fees vary by business type, scope and location. Compare quotes only when the list of filings is identical. Our separate guide on accountant fees in the UK sets out the market ranges.
Where do you find a good small business accountant?
Start with recommendations from other business owners in your sector. Then use the professional body directories at ACCA, ICAEW, ICAS and CIMA. Shortlist three firms and ask all of them the same twelve questions.