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Compliance19 October 2026·11 min read

How to Change Accountant as a Limited Company Contractor: Clearance, Handover and Timing

A practical guide for UK limited company contractors who want to change accountant, including part-way through the year. It explains professional clearance, what the old accountant should hand over, how HMRC agent authorisation works, what happens if fees are unpaid, and how to pick a handover date so that no filing falls between two firms.

You change accountant by appointing the new one first. Your new accountant then runs professional clearance: a letter to your old accountant asking for the records they are entitled to and confirming nothing stops them acting for you. You also give the new firm authority to deal with HMRC, and you remove the old accountant's authority. A typical switch takes a few weeks, and you can do it part-way through the year.

This guide takes the steps in the order they matter to a contractor, and spends the most time on the part where filings get missed: the gap between two firms.

What professional clearance is

Professional clearance is the process in which your new accountant contacts your previous accountant. The outgoing accountant should then provide the records and information the new accountant is entitled to receive.

The letter is called a Professional Clearance Letter (PCL). It formally tells your old accountant that you intend to switch and asks them to:

  • confirm there are no professional reasons why the new accountant should not take you on
  • transfer the documents relevant to your accounts and your company's tax affairs

In most cases your new accountant sends it. Some firms prepare the letter for you to sign and send yourself, so ask which your new firm does.

Be clear about what clearance is. It is a professional courtesy, not a legal requirement of switching accountants. Your old accountant cannot stop you leaving. But a chartered, certified or otherwise accredited accountant is bound by their regulatory body to cooperate with clearance and handover requests within a reasonable timeframe, barring exceptional circumstances. If your old accountant is not a member of a professional body, you have no such backstop, and it is another reason to check your new accountant's qualifications. Anyone can call themselves an accountant because the word is not regulated.

The disengagement letter

Your old accountant may send you a disengagement letter. It states their reasons for leaving and which of your tax affairs they may continue to work on. It is written mainly for the benefit of your new accountant, because it shows what they are taking on. Your new accountant is looking for signs of fraud or tax evasion and may decline you as a client if they find them.

Read it and reply to it. If it raises an allegation about your financial reporting, deal with that directly with the old accountant before the changeover. Issues about your reporting have to be settled with the outgoing accountant before you move.

The order of steps

Firms run the steps in slightly different orders. Some send the clearance letter after you instruct them and take the HMRC authority after their checks and engagement letter. Others take the authority first. Your new accountant will tell you their sequence. This is what a typical switch looks like:

Step What happens Who acts
1 Read your engagement letter for a notice period and any termination terms You
2 Choose a handover date and appoint the new accountant You
3 The new firm runs anti-money laundering and identity checks and sends its engagement letter New accountant
4 Professional clearance letter goes to the old accountant New accountant (or you, if asked)
5 You authorise the new accountant with HMRC You
6 You remove the old accountant's authority You
7 Records arrive and the new accountant reviews them Old and new accountant
8 Agree who files what, and from which date All three of you

The anti-money laundering checks are normal. They include verification of your identity and business information.

Giving notice

Check your letter of engagement to find out whether you agreed a notice period, then give written notice to your current accountant. Assuming your payments are up to date, there should be no reason you cannot leave. A letter of engagement cannot, and should not, be used as grounds to stop you moving accountants, even if your next set of returns is outstanding.

Notice and the clearance letter often happen close together. Appoint the new accountant before you tell the old one, so you are not left without one.

What your old accountant should hand over

A typical request covers previous tax returns, year-end accounts, trial balances, VAT records, payroll data and access to software. Mollan & Co says its clearance letter also asks for copies of previous years' accounts and tax returns, and says most accountants have an obligation to provide handover information to the new accountant within a couple of weeks.

Two limits are worth knowing:

  • Working papers. Internal working papers do not automatically form part of the handover.
  • Software. Some firms revoke your access when you leave. Download what you need first. If you use FreeAgent or similar, confirm your new accountant can access it.

Your new accountant may also ask you for your full tax records, copies of your bank accounts and any tax returns you hold. Gather them early. It means you are not wholly reliant on the old firm, and it helps if the handover is slow.

Can the old accountant charge?

The outgoing accountant is expected to provide the information at no cost, unless significant extra work is needed. Professional bodies oblige members to provide documents without charge, although some firms charge a small fee for compiling them, which should be no more than about an hour's work.

What if they are slow or do not respond?

The new accountant can usually proceed without the old one's cooperation, provided it has the relevant information. Your own records from the list above then do the work. A complaint to the old accountant's professional body is available where a member does not cooperate.

Unpaid fees

Settle outstanding fees before you leave. If you leave without settling your debts, your accountant could hold your records until everything is paid.

A fee dispute alone does not entitle the old accountant to refuse professional clearance. They are entitled, though, to tell your new accountant about the circumstances, and that can affect whether the new firm takes you on. If you dispute the fee, you can complain to the professional body or use fee arbitration, for example through ICAEW. Settle it or have it resolved before the switch rather than in the middle of it.

HMRC agent authorisation

An accountant can only deal with HMRC for your company once you authorise them. Two things sit behind this.

The agent has to be registered. Registering with HMRC as a tax adviser is a legal requirement, separate from setting up the accounts used to access HMRC services. Registration is done by applying for an agent services account. Once registered, the adviser must still get authorisation from you before acting on your behalf. An agent services account gives access to services including Corporation Tax, PAYE for employers, Self Assessment and VAT. If your new accountant is a recent firm, ask whether it is registered. HMRC's own guidance says processing an agent services account application takes up to 40 working days after HMRC receives it.

You give the authority. The traditional route is a 64-8 form, which authorises the accountant to talk to HMRC on your behalf. That used to be paper-based and is now mostly online. The method can vary by tax and HMRC service. You may be asked to approve an online authorisation request, sign a new 64-8, or use another HMRC authorisation process. In some cases HMRC issues an authorisation code and you forward it to the new accountant, and an authorisation code may also be sent to you by post. If a code arrives, pass it on promptly, because the new accountant cannot act until it is entered.

You remove the old one. When you authorise your new accountant, remove your previous accountant's authority too. Failing to update HMRC, including leaving the old accountant on your record, is a common mistake. It leaves two firms with access and no clear owner for the filings.

Companies House

Check how your company is set up at Companies House. Some accountants provide the registered office address and file the confirmation statement as separate paid items, so leaving may change both. Agree before the handover date who will file your confirmation statement and where your registered office will be. Firms that take over a client mid-year usually apply for their own agent log-ins with HMRC and Companies House.

Timing the switch

You can switch at any time. The risk is a switch that lands near a deadline, and the trouble starts when nobody is sure who files what.

Three timing rules hold up:

  1. Do not switch immediately before a major filing deadline, or part-way through a VAT quarter. That is how you get missed deadlines and confusion about who is responsible for filing.
  2. Agree the details in writing. Both firms and you should agree who handles ongoing returns, which deadlines are still outstanding, and the exact handover date.
  3. Choose a quiet date. Ideally pick a date when there is little active business between you and your existing accountant, and when neither side is waiting on an action or a payment.

Year-end or mid-year?

Accountants often say the best time to change is after your company's year-end, because year-end accounts will normally have been paid for already, and the new accountant starts on a clean year. The case for moving before a year-end is that any advice can be acted on before it is too late. Both are workable. What matters is that you know which of the two you are choosing and who completes the current year's accounts.

If you switch mid-year, ask what your new accountant charges for work on the period before it was engaged. Some firms add fees for outstanding work from the period before you joined. The new firm may take over and complete the current year's accounts for a set fee or for free, so ask at the outset.

How long it takes

Moving from one accountant to another generally takes a few weeks. Do not push it faster than that. Rushing the handover could leave you with missing documents.

You stay responsible

A company director remains responsible for the company's filings even if they use an accountant. If something falls between the two firms, the penalty question can depend on the circumstances, including whether you took reasonable care. That is the argument for writing down who files what and from when, and for diarising each filing date yourself during the changeover.

What the new accountant should do first

When the records arrive, the new accountant should review them. A review by the new firm can show past errors or missed expenses. Ask for the outcome in plain terms. Mollan & Co reports no known link between changing accountants and HMRC selecting a business for inspection.

Before choosing a firm, define what you need, compare fees, check qualifications and check whether the firm has experience with contractors. Our guide to contractor accountant fees sets out what different service levels usually cost.

A short checklist

  • Read the engagement letter for notice and termination terms.
  • Settle any unpaid fees, or resolve the dispute.
  • Download everything you need from your accounting software.
  • Appoint the new accountant and complete their identity checks.
  • Make sure the clearance letter has gone, and reply to any disengagement letter.
  • Authorise the new accountant with HMRC and remove the old one.
  • Agree in writing who files what, and from which date.
  • Note every filing date yourself until the handover is complete.

Frequently Asked Questions

How long does it take to change accountant?

Generally a few weeks. It varies case by case.

Can I change accountant part-way through the year?

Yes. There is no rule against it. Avoid a date just before a major filing deadline or in the middle of a VAT quarter, and expect that some firms charge for work on the period before they were engaged.

Can my old accountant refuse to hand over my records?

A fee dispute alone does not allow them to refuse clearance. They can tell your new accountant about it, though, and an accountant could hold your records if you leave without settling your debts. Members of a professional body are bound to cooperate within a reasonable timeframe.

Do I have to tell HMRC?

You must authorise the new accountant, using a 64-8 or HMRC's online authorisation, and you should remove the old accountant's authority at the same time.

Is professional clearance a legal requirement?

No. It is a professional courtesy. Even so, accredited accountants are bound by their professional body to cooperate.

If you want a firm that works only with contractor companies, Deplexify's accounting for UK contractors covers the accounts and tax side of contractor companies.

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