Red Shoes Accounting Services

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5 questions you should ask your accountant before you engage their services
12/05/2023

You may have seen in the news recently a story about an accountancy firm whose clients have been told to repay thousands of pounds to HMRC after the firm incorrectly filed tax refund claims. Understandably this has resulted in hardship for many of their clients suddenly having to find large sums of money to repay. 

This kind of malpractice amongst firms who purport to be "tax experts" concerns us. Your accountant should be someone qualified, experienced and trustworthy.  They will have access to all the information about your business' finances and hold responsibility for arranging your tax affairs and submitting important documents and accurate figures to HMRC.

So how do you make sure that your accountant is trustworthy and competent? 

We have compiled a list of 5 questions you should ask your accountant before you engage their services:

  1. Check their qualifications: believe it or not, there is no legal requirement for an accountant to be qualified. Anyone can set themselves up as an accountant (as has happened with the story in the news).  Your accountant should have relevant professional qualifications such as the Association of Accounting Technician (AAT) and/or  Association of Taxation Technicians (ATT) qualifications, like we do at Red Shoes Accounting. The syllabus for both of these qualifications cover both business and personal taxes and the qualification demonstrates competency in both. Lorraine and Victoria are both qualified Chartered Accountants in addition to their AAT qualifications.
  2. Check how much experience they have: we'd recommend that the accountant you choose has at least two years of Practice experience following qualification. In our office we recently worked out that of our three senior team members (Victoria, Vanessa and Lorraine) there is nearly a 100 years’ worth of experience between the three of them. There are not many tax or accountancy situations that as a Practice we have not seen, and successfully dealt with!
  3. Check to see what industry sectors/tax types your accountant is experienced in: your accountant should have an understanding of the industry that you work in is essential to make sure that allowances are being applied correctly and that they understand the industry challenges your business faces. There are many different types of tax, for example: stamp duty land tax, inheritance tax, Capital Gains Tax. Is your accountant experienced in all of these?
  4. Check to see if the accountant has a practising licence: In the United Kingdom, professional accountancy bodies or organisations accredits and certifies qualified accountants to show their capabilities. If the accountant has a website, then the logo of their professional body membership should be displayed. If not, then ask them who they are affiliated to and request to see the certificate if necessary. Licensed accountants have to maintain very high quality standards, particularly around CPD training obligations and anti-money laundering regulations.
  5. Check your accountant has the correct insurance in place: in the unlikely event that your qualified and affiliated accountant makes a mistake or gives out the wrong advice and you have to make a legal claim against them, it is wise to check they have the correct indemnity insurance in place against third party claims. Thankfully, we have insurance firmly in place but have never had to claim on it as we have stringent quality control procedures and plenty of technical support available from professional bodies to ensure that our work is accurate.

These five questions are just a starting point, continue to ask your accountant questions throughout your relationship with them to ensure they are maintaining their standards and understanding of your business.  The accountant that you choose, you will most likely be working with for many years to come, so it's worth spending a little time making sure you have the right one for you.