One of the most frequent questions I am asked when I speak to potential clients is ‘How easy is it to change my accountant?’ The answer quite simply is – Very Easy.
So how does the process work?
If you would like to switch accountants and join our experienced team here at Baobab Accounting, here are some steps to assist you. If you do have any questions, please contact us and a member of our team will be happy to help you make the switch.
1. Notify existing accountants
You will first need to write to your current accountant advising them that you wish to terminate their services and that you will be switching to another firm and for them to provide any information requested by the new accountants. Within this letter to change accountants, you should also confirm if there is any expectation for finalised work such as completing the financial year-end accounts.
2. Appoint new accountant
Your new accountant will send a form for you to complete your registration with them which will include your personal, as well as company information. According to UK law, your new accountant will carry out anti-money laundering checks on you, so you will have to provide a scan of your passport or driving license as well as a two recent utility bill that are not older than 3 months.
3. Authorise new accountant to act
By signing a new 64-8 form you will authorise the new accountant to deal with the HMRC for your personal and company tax affairs. Alternatively, and most common, is that the new accountant will request authority using the HMRC’s online authorisation service. Once they have applied for authority, HMRC will issue activation codes to you by post which you will need to provide to the new accountant.
4. Letter of engagement
The new accountants will send through a ‘Letter of Engagement’. Make sure to read through it carefully as it sets out the expectations and requirements between you and the new accountant.
5. Professional clearance request
Your new accountant will write to your previous one requesting what is known as professional clearance. This explains to your previous accountant that you have contacted the new accountant to represent you and if there are any professional reasons as to why they should not accept the appointment. The letter requesting documents from the previous accountant will include a request for any copies of accounts, tax records, tax returns and any other information they may need.
Just a few weeks later, all your accounting information should have been safely transferred to your new accountant.
From the 6 April 2026, you’ll need to follow HMRC’s rules for Making Tax Digital (MTD) for Income Tax.
MTD for Income Tax is a government initiative that will change the way that landlords and sole traders manage their finances and make tax submissions to HMRC.
MTD for Income Tax will apply to all landlords and sole traders whose total property and / or sole trader business income is above £50,000 per year.
If this is the case, you will need to use software to:
• Keep digital records of your income and expenses.
• Send quarterly updates to HMRC.
• Finalise your income and submit an end of period statement (EOPS) and final declaration (which will replace the annual Self-Assessment tax return) to HMRC.
At Baobab Accounting we are able to offer you a solution with access to award winning online accounting software FreeAgent as part of our service for sole traders and landlords.
A ‘K’ tax code is seen less often and is used when total deductions due for company benefits, state pension or tax owed from previous years are greater than an employee’s personal allowance. This typically arises when an employee is provided with an expensive company car. Employees need to multiply the number in the tax code by 10 to work out how much will be added to their taxable income before tax is calculated. For example, a code K600 will result in £6,000 being added to taxable income over the year, at a rate of £500 per month.
Your tax code does not affect the calculation of National Insurance Contributions, which are based on your actual gross salary.
K code example
You have previously been on tax code 1257L but have now received a company car from your employer on which the benefit in kind will be £20,000 (lucky you!). HMRC deducts £20,000 from £12,570 which effectively gives you negative tax allowances of £7,430 and converts this into a new tax code K743.
In future, instead of having £12,570 / 12 or £1047.50 deducted from your taxable pay every month you will have £7,430 / 12 or £619.17 ADDED to you taxable pay each month.
When you are thinking of starting up a business, or you already have a business and you are either concerned about maintaining records and filing requirements, an accountant can help you take the next steps. We can discuss your business's organization, tax purposes and operations, along with target pricing and profit margins.
Does your accountant return your calls? Do you feel comfortable asking them a question? Do you feel heard? With the right accountant, the answers should be a resounding "Yes!"
Getting impartial advice from an accountant at the outset before you consult the bank would be helpful. A bank will want to see a strong business plan and organized records. Let us help you get ready for your business's next step!