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Accounting business without qualification?

Can you run an accounting business without being fully qualified yourself.

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I have worked within finance and accounting roles for the last 10 years and only recently started my CIMA qualification, effectively to get the paperwork to say I have ticked the boxes. However, I have a couple of friends who are qualified accountants (ACCA), one who is FT employed and does some freelance accoutning on the side, and the other who is a FT freelancer accountant, and we were speaking about going into business together.

In short, we wanted to understand if there were any issues with setting up a bookkeeping/accounting business that provides accounting services to micro entities/small businesses, although I myself, do not hold a full qualificaiton. I would be running the day to day of the business, effectively a project manager, liasing with clients, doing bookkeeping work and then outsourcing the accounting work i.e. annual accounts/CT600 prep and filing to one of my friends. Over time, they would join the business, but they have other commitments in the near future which means they cannot do so at present.

Would love to get your thoughts and feedback on this business model and whether we would have any barriers as such.

Thanks,

Darren

Replies (27)

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By SXGuy
08th Jun 2020 19:24

You can be an accountant without any qualifications. You'll need to be registered with hmrc for Aml though.

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By paul.benny
08th Jun 2020 19:58

I think the problem will be for your qualified friends. They won't be able.to be in partnership with someone not qualified.

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Replying to paul.benny:
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By Dgreenwod
08th Jun 2020 20:18

Would that come into play if the company is a limited company and they are down as directors?

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Replying to Dgreenwod:
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By SXGuy
08th Jun 2020 20:47

Unless someone can show me why not, I don't see why they couldn't be directors and you be a shareholder/employee.

Of course they would need to speak with their professional body first to check.

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Replying to SXGuy:
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By thestudyman
09th Jun 2020 20:33

Careful - if the OP is going to be running the day to day business at a very high level without being a director, they could be seen as a "shadow director". Incase things go [***] up (e.g. insolvency) - things could get tricky.

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Replying to paul.benny:
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By Mr_awol
08th Jun 2020 23:05

paul.benny wrote:

I think the problem will be for your qualified friends. They won't be able.to be in partnership with someone not qualified.

I’m not convinced that is true.

Depending on their qualifications they may have trouble becoming registered auditors, or regulated for investment business, but other than that they probably only need a majority of the equity to be held by ICAEW or ACCA qualified partners/directors to call themselves either a Chartered or Certified practice respectively.

I’ve not looked at it in detail and it may be that the ACCA rules are different to ours but I’d thought the OP could be in business with qualified colleagues as long as those colleagues have a practicing certificate and the form doesn’t claim to be under the umbrella of those qualified persons?

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Replying to Mr_awol:
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By paul.benny
09th Jun 2020 09:05

You're right, of course. My response was an over-simplification.

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Replying to paul.benny:
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By Ben McLintock
11th Jun 2020 09:37

Is it not the just use of the description 'Chartered Accountants' that is disallowed if not enough (I think 50%) of the principals are ACA? You regularly see this cropping up with firms who have a mix of ACA and ACCA principals, hence why some firms describe themselves as 'Chartered Accountants' (majority ACA), and others 'Chartered Certified Accountants' (majority ACCA).

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By spilly
08th Jun 2020 21:13

ACCA won’t let you be accredited with them unless all directors are qualified (but they don’t have to be ACCA).
We have one Director who deals with the HR and mentoring side of things for clients. As they are not accounting-qualified we cannot promote ourselves as an ACCA firm or use their logo anywhere.
For us it is worth it as we can offer more services, and clients often don’t know anything about accounting bodies (or really care tbh).

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Replying to spilly:
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By Dgreenwod
09th Jun 2020 07:44

Really appreciate all of the responses - thank you!

So the feeling I am getting is that it comes down to being able to label the firm as chartered or associated with the accounting professional body (which we would not do, given that I am not qualified).

The services we look to offer are annual accounts, bookkeeping, management accounts and offering advice on running a finance function i.e. helping a construction firm understand and manage their finance function.

Thanks again,

Darren

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Replying to Dgreenwod:
By mrme89
09th Jun 2020 08:46

You’d still need a PC.

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Replying to mrme89:
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By Dgreenwod
09th Jun 2020 10:21

Why would I need a personal chef?

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Replying to Dgreenwod:
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By alfredpennypinch
09th Jun 2020 10:27

To cook the books, of course.

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Replying to alfredpennypinch:
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By Dgreenwod
09th Jun 2020 10:51

This is the content I am here for - love it!

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Replying to Dgreenwod:
Hallerud at Easter
By DJKL
09th Jun 2020 11:56

A bit like the "Banter Boys" sketches in "Chewing the Fat"

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Replying to spilly:
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By Mr_awol
09th Jun 2020 08:35

spilly wrote:

ACCA won’t let you be accredited with them unless all directors are qualified (but they don’t have to be ACCA).
We have one Director who deals with the HR and mentoring side of things for clients. As they are not accounting-qualified we cannot promote ourselves as an ACCA firm or use their logo anywhere.
For us it is worth it as we can offer more services, and clients often don’t know anything about accounting bodies (or really care tbh).

Again, are you sure? I’m no expert on the ACCA rules but they tend to be a bit loose compared to other bodies (letting members carry out BK without a PC etc) and their rule bookrefers to 51% control:

“ 15. A firm (containing holders of practising certificates of whatever category or insolvency licences) may describe itself as a firm of “Chartered Certified Accountants”, “Certified Accountants” or “an ACCA practice” only where:
(a) at least half of the partners (or directors in the case of a company, or members in the case of a limited liability partnership) are ACCA members, and
(b) the principals noted in 15(a) above control at least 51 per cent of the voting rights under the firm’s partnership agreements (or constitution”

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Replying to Mr_awol:
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By spilly
09th Jun 2020 09:39

My mistake - I know that ACCA particularly referred to the non-accounting director as being a bar when we first set up. We currently have a mix of qualifications between us so don't meet the 51% of ACCA members anyway now.

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Replying to spilly:
ALISK
By atleastisoundknowledgable...
09th Jun 2020 18:44

spilly wrote:

ACCA won’t let you be accredited with them unless all directors are qualified (but they don’t have to be ACCA).

That’s not true. I’m ACCA, Mrs ALISK isn’t an accountant but is a director. I had an ACCA inspection last year and it wasn’t mentioned.

To be called ACCA, 50%+1 of the voting capital needs to be owned by an accountant(s) with a PC. Do your friends have practicing certificates?

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By paulwakefield1
09th Jun 2020 08:01

You should also check what CIMA requirements are if you are planning to continue with them. They may have practicing certificate requirements, etc.

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Replying to paulwakefield1:
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By tom123
09th Jun 2020 08:27

CIMA most definitely do have practice requirements - and I fear the OP would not meet them.

Strangely, pre qualification you are not restricted as much as 'post' qualification. It is of course the full 'Chartered' brand that CIMA are keenest on protecting - along with the other bodies.

You must not hold yourself out to have any connection with CIMA. There is no real life 'part qualified' status, although of course students will use it.

You could, of course, be employed by someone else whatever your qualification status.

Also, ask yourself in all seriousness whether you are capable of this work. It is one thing working in a finance function for one company, it is quite another taking a wide variety of records from businesses that you are not au fait with on a daily basis and trying to make sense of them.

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Replying to tom123:
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By lesley.barnes
09th Jun 2020 09:07

I agree with Tom about being able to practice whilst studying for Cima. I queried this with Cima last year. I was told that someone could be a student and also run a practice as long as they didn't use the Cima branding or mention Cima anywhere. You would need to register with HMRC to be supervised for ML rather than be supervised by Cima. You might want to think about whether you want to continue studying because when you move from student to qualified you will need a practicing certificate to continue as a member in practice which may be difficult to obtain if you are working on your own without supervision. I can't remember what the requirements are now but you can look them up on Cima's website.

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By Yorkshireblue
09th Jun 2020 11:36

It depends on where you intend to pitch your market. Steer away from Limited companies and focus on the self employed sector, payroll, management accounts etc., and you can do ok. Keep costs low, work from home,etc., etc, and earnings of £50k+ are achievable - hard work but both achievable and rewarding.
I know, I've being doing it for 20+ years.

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By mikebrooks
10th Jun 2020 13:00

I sense from the above posts that a PC is much treasured, yet "practise" (the verb) has been misspelt on 5 out of 6 occurrences.

The only correct spelling I can see is the copy/paste from ACCA! Or maybe there are loads of American accountants "practicing" in the UK :-)

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By kate_1834
10th Jun 2020 13:05

Have you checked the CIMA rulebook?

Each association or institute of accounting professionals has one, each with different rules on who can be in public practice, who has to have a practising certificate (pc), how you get a pc, who can hold themselves out as being in public practice, and what work can be undertaken without a pc.

ACCA has recently changed the rules so your friends will be well advised to double-check their understanding of what is and isn't allowed. If they get it wrong and get caught, there is a high possibility they will be struck off.

There are other options available, including switching to a different designation, if you want to go into public practice. For those who are ACCA qualified, they can't hold dual membership and practice without an ACCA pc.

In essence, it's a minefield that needs to be navigated with caution.

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Replying to kate_1834:
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By mikebrooks
10th Jun 2020 13:17

Great - I now make that 6 out 8 :-)

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Replying to mikebrooks:
Hallerud at Easter
By DJKL
10th Jun 2020 13:35

My eyesight must be failing as am struggling to spot the error in the above.

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Replying to DJKL:
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By mikebrooks
10th Jun 2020 14:25

" ... they can't ... practice without..."

IIRC, the usual advice (geddit?!) in school was "would you write advice or advise?"

It's no big issue - just trying to fill a quiet day :-)

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