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What is professional clearance?

  • 4 min read
  • Last updated 29 Sep 2022

So, you’re here to find out what professional clearance is. Welcome🎉

Here’s your guide to everything you’ll need to know.

Back to basics

Professional clearance is a letter that your new accountant sends your old accountant to ask for information and documents relating to you and your tax matters. 

It includes a request for your documents and information so they can take over your accounting and tax affairs. 

What are the steps?

If everything goes smoothly, it should look a little like this…

  1. Let your previous accountant know you’re leaving
  2. Instruct your new accountant
  3. Give your new accountant authority
  4. Check they have sent over a letter of professional clearance
  5. Reply to a disengagement letter if you receive one

But we know there are hiccups along the way so don’t worry if your process isn’t (or wasn’t) as straightforward. Let’s go through each step in more detail.👇

So long old accountant 👋

When you’re ready to leave your accountant, the best practice is to let them know ASAP. Once you’ve decided on leaving, send your accountant written confirmation. 

It’s best to keep your relationship as cordial as possible so feel free to give them a ring to talk it over too. 

A disengagement what?

Once they know you’re planning on leaving, your accountant will send you what’s known as a disengagement letter. It basically outlines the reason for you leaving and if there are any tax matters that you want your old accountant to carry on working on. 

For example, if you’re in the middle of a tax return, it might be easier for your old accountant to finish it off and make the switch to your new accountant for the next tax return. 

In this case, you let your old accountant know to finish the tax return but that you’ll no longer be using their services once it’s filed. 

What’s the new accountant looking for?

The new accountant is making sure that there are no surprises down the line. That includes checking on you, as the client, and also digging into your tax matters.

If the old accountant highlights any dodgy behaviour – like tax evasion, fraud, deliberately misleading them, etc – then that might just sway your new accountant’s decision to take you on as a client. 

We say might… but we mean it will and it should. 

They’ll request things like:

  • Copies of your accounts
  • Any tax returns
  • Your tax records

Plus more. Whatever they feel like they need, they’ll request. 

Giving authority to your new accountant

Your new accountant will do all the basic checks on you, like anti-money laundering, checking your proof of identity and your business information. They’ll also issue an engagement letter outlining that they’re taking over as your accountant, the agreement you have in place, and any details about the service they provide. 

Pro tip: read it. 

Once you’ve officially switched to your new accountant at the end of the process, you need to give them one more authorisation to contact HMRC on your behalf. They’ll usually do it online. 

How long does the process take?

Switching over accountants generally takes a few weeks.

If there seems to be a delay, speak to that party to try to get to the bottom of the holdup. As a last resort, you can always go through the relevant professional body and make a complaint.

What is my accountant legally required to do?

Once they know you want to leave, they should cooperate and work with your new accountant to pass over any relevant information. Check which professional body your accountant is a part of from the options here and take the relevant steps to make sure you’re protected.

While professional clearance is requested from your new accountant, if they don’t get it from your old one, they can still move forward with you as a client as long as they have the relevant information from you. Some accountants may choose not to go ahead.

Instructing TaxScouts

Welcome to the gang!

Once you’re matched with an accredited accountant, they will send you a letter of engagement that includes the 64-8 form

The 64-8 form gives the accountant authorisation to act on your behalf for your tax affairs. You’re basically giving the accountant permission to work for you.

Our accountants don’t need to request professional clearance from your old accountant as you’ll be uploading all the necessary documents directly onto your TaxScouts account. Once you log into your account, you just follow the simple steps related to your tax situation. 

What this means is that your TaxScouts accountant will get everything they need directly from you. If there’s anything extra they require, they’ll let you know.

It’s a pretty simple process with us but if you have any questions, speak to our beloved support team at [email protected]

Think you might need more help?

It’s can be worth seeking professional advice before you instruct an accountant to act on your behalf. That’s where we come in. Our accredited accountants also offer a one-off, 1-1 tax consultation so you can be sure you’re making the right move. Plus, they’ll even send you a written summary afterwards. Learn more here.

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