ICAEW Practice certificate - Solutions!?

Hi everyone,

 

I am an ACA trained in audit (experienced mainly with SMEs and owner managed business) but currently working in industry and want to start sewing the seeds of setting up by myself in the future. To this end I was hoping to start to carry out some work alongside my current role to start to build experience and clients. I do not have a practicing certificate as I have not been a qualified member for long enough yet (I didn't submit my paperwork straight after finishing my training contract, se despite being a year and a half post qual I have quite a way to go until I get my 2 years full membership for PC, with hindsight I should have been more proactive!).

I have recently been looking in to what work I can carry out before attaining a full practicing certificate, as I had always believed simple bookkeeping was allowed. I am absolutely stunned by just how restrictive the need for a practicing certificate is! I am surprised I am even allowed to operate a calculator or do mental arithmetic for someone else without being in breach and expecting a hefty penalty arrive through my door! Does the institute really have such a lack of respect for it's own exams, recognised training schemes and ongoing CPD of its members that it doesn't trust them to perform work that even school leavers who start training can carry out!? It makes a mockery of the hard work and hours you put in to attain 3 letters after your name.

I do understand the need for a practicing certificate, given that the career paths and industries which the institute’s members work in are many and varied, but it is such a blanket approach that is applied. Clearly some areas of work are very complex, but simple bookkeeping or even preparing a budget surely cannot need the same governance as insolvency, audit or tax representation work?

I admit this discussion thread is mainly a route for me to vent my frustration at having to turn friends away when my peer group are starting their own businesses and looking to their ACA mate for help. I have received many puzzled looks when I explain the situation and they always ask what all the exams were for!

It would be great to hear if any other ACAs share this frustration, have managed to overcome it or those who have started in practice themselves and have any kind of support on how to best prepare myself/get more experience if I have to just sit and wait it out? I have heard of people leaving the institute and joining things like the ICB to obtain a practicing certificate from them and sensible PI insurance through them. Has anyone actually taken this route who can give feedback on whether they feel it worked for them?

 

As an additional point, I am currently studying towards my CTA to bring my tax expertise up to date. The CIOT have no problems with its members working for themselves once qualified! It may be that the best option is to drop the ACA and ICAEW membership, join CIOT and someone like the ICB and move forward..?

Thanks everyone. Rant over!

 

 

Comments

Don't tell them

chatman | | Permalink

Why not just go ahead without telling the institute? How would they find out? If you like you could get one of the purchased qualifications like ICPA as cover until you get your practising certificate.

While I am sure many do...

DavidACA82 | | Permalink

... some work for friends etc without telling the institute, I would be apprehensive about actively seeking bookkeeping clients and being paid and just hoping the institute don't notice.

 

I just checked ICPA, it looks interesting so thanks for that. Certainly seems more geared towards helping accountants working with SMEs do their jobs, rather than simply being a badge with 'gravitas', which is what the ICAEW seems to mainly be (unless you work for the big 4 or are concerned with the latest developments in financial reporting that affects banks and the FTSE100, in which case the ICAEW looks to be aimed right at you).

 

 

You need a friend

tltodman | | Permalink

You only need a PC if you are a principal in the business. If you get someone else to be the director who is not supplying accountancy services and you are secretary/employee of ltd company you do not need PC. Ltd co should still have PII though.

 

mr. mischief's picture

My thoughts

mr. mischief | | Permalink

I qualified ACA in 1991, I am looking at the certificate now.  Came in the top 5 in my region in the Finals.  Went into industry in 93 and was last seen running an £80m business in 2009, before setting up my practice.  I had two choices for a practising cert:

1.  ICAEW - cost just over £1,600 due to having stopped paying the subs. in 1997 as they seemed to offer sod all to someone in industry.  Benefits to sole trader - zip.

2.  ICPA - has many ACA members, including the former managing partner of the firm I qualified with in 91!!.  Cost 750.    Benefits - free ICPA, great hotline, great database, magazine which is of high relevance from cover to cover for a sole practicioner, online CPE which always covers relevant topics.

Result - NO BRAINER decision, wish they were all so easy to make when setting up!

Regrets - NONE.

Clients now - 125

Go for it!  if ICAEW ever get their heads out of the sand re. sole practioners then sign up with them again.  But before they can get their heads into the sand they need to get them out of the arssess of the Big 4 partners and FTSE 100 FDs.

 

 

James Hellyer's picture

Worth it    1 thanks

James Hellyer | | Permalink

The ICAEW qualifiaction and practice certificate are worth having. Chartered Accountancy is a brand people recognise and usually perceive as superior to the alternatives. I'd think long and hard before giving it up.

Operating underneath someone else's banner would be the easiest way to get you experience without breaching ICAEW rules.

I'd also recommend the ICPA when you do start your own practice. The support they offer and the CPE make it very worthwhile - and that's before you look at the discounts available for fee protection schemes, etc.

mr. mischief's picture

I agree in principle    1 thanks

mr. mischief | | Permalink

Clearly I agree that ICAEW is the Blue Riband or I would never have studied for it in the first place.  Whether it has much brand recognition in smaller businesses is questionable.  What is undeniable is that for certain organisations - those set up as Industrial & Providents, for example - the lack of "Chartered" on my notepaper has cost me business.

In truth it was not just the compelling offer ICPA made, it was the difference in attitude.  With ICPA it was "What can we do to help you get your business going?" and I still find that to this day.

With ICAEW it felt very much like I should feel deeply honoured they were even bothering to talk to me after the years that had passed, and that I should really welcome the opportunity to pay £4k or £5k to rejoin never mind the trivial sum of £1,600.

Yes overall £1,600 is a trivial sum and one I could easily afford.  It wasn't the money, it was the compelling ICPA offer and the refreshing attitude they took to me setting up in business.

It leaves a bad taste in the mouth.

Hi everyone,

DavidACA82 | | Permalink

Hi everyone,

thanks for all the comments and input, it has been very useful and its always good to know what others are thinking.

 

I think I will look into whether I can 'work under someone elses banner' for a while just getting experience in Kent where I live and see if anyone is willing to help out. I don't want to leave the ICAEW, its just frustrating when you want to take the next steps in your career/life and something you have worked hard for actually holds you back for a couple of years. I will consider leaving as the last resort and investigate the other suggestions first then.

 

Thanks again.

 

DavidACA82 | | Permalink

 

Hi tltodman,

 

Thanks for your advice. I just wanted to clarify something as I am not sure I understand you. When you say 'get someone else to be the director who is not supplying accountancy services ' are you suggesting that a limited company with a Director who is not a member of ICAEW and not supplying services (but through whom I am working on bookkeeping and basic accounts for clients) does not need a practicing certificate? Or do you mean that if I work effectively as an employee/contractor under someone else who does have a practicing certificate I would not need one?

 

I presumed you meant the later to start with but reading your comment again I am unsure.

 

Thanks!

Clarification    1 thanks

tltodman | | Permalink

Sorry if what I wrote was ambiguous.

In my situation - husband & I co-own limited co. He is director & I am deliberately not (am co sec but that's irrelevant). He is an electrical design contractor & contracts his services to petro-chem industry. I'm a ICAEW member & provide full range of accountancy, payroll, tax services to a number of clients. As a director I would need a PC, because I'm not, I don't  even though no-one is effectively supervising me. (well at least not the last time I checked and I check every couple of years -probably about time to check again!)

Hope that helps

Tracy

can you...

Carl London | | Permalink

Can you retain your ICAEW membership (continuing to pay fees and keep ACA after your name) and practice if you are a member of ICPA without having an ICAEW practicing certificate?

 

I has a quick look at the ICPA website but can't quite work out what 

"The ICPA Members Professional Indemnity Insurance Policy is FULLY ICAEW Compliant."

 

actually means!

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