Last updated: 21 October 2026 | By Chris Barnard, Managing Director, Acenteus Accounting
This article is general guidance for accountants in the UK and is not regulatory or legal advice. Requirements differ between professional bodies and change over time, so check your own body’s current regulations before you start trading.
To start an accountancy practice in the UK you need five things in place before your first client signs: a practising certificate or other anti-money laundering (AML) supervision, professional indemnity insurance (PII), registration with the Information Commissioner’s Office (ICO), access to HMRC and Companies House as an agent, and engagement letters. After that, the decisions that shape your first year are your niche, your pricing, your software stack and how the work will get done when you have more clients than hours.
Most guides stop at the rules. The professional bodies list them well, US articles get them wrong for the UK, and forum threads are full of useful but scattered experience. This guide puts the rules, the first-year costs and the operating model in one place, written from the side of the profession that sees new practices hit the capacity wall in their second tax season.
Key takeaways
- Regulation first: if you are an ICAEW, ACCA, ICAS or similar member offering services to the public, you will normally need a practising certificate from your body, which also becomes your AML supervisor. If you are not a member of a supervisory body, you must register with HMRC for AML supervision.
- Insurance is compulsory: your body sets a minimum PII limit that rises with your fee income.
- Register with the ICO: most new practices pay the tier 1 data protection fee of £52 a year.
- Get agent access: an HMRC agent services account, and Companies House authorised agent status for identity verification and filings.
- Plan capacity before you need it: the founder who does every job personally caps the practice at the hours in their week. Decide early which work you will hand to staff, contractors or an outsourcing partner.
Who can start an accountancy practice in the UK?
Anyone can call themselves an accountant in the UK, because the title is not protected. What is regulated is the work. Audit, insolvency and some investment business need specific licences, and anyone providing accountancy services by way of business must be supervised for anti-money laundering.
In practice, most new firms are started by qualified members of ICAEW, ACCA, ICAS, CIMA, AAT or the Association of Taxation Technicians, because membership gives clients confidence and brings a ready-made regulatory framework. If you are qualified, start with your own body. ICAEW’s start your own practice hub covers its requirements, and ACCA publishes equivalent guidance for members going into practice.
What licences and registrations do you need?
This is the compliance checklist for a new UK practice. Work through it before you take on your first client.
| Requirement | Who needs it | What to do |
|---|---|---|
| Practising certificate | Members of ICAEW, ACCA, ICAS and similar bodies offering services to the public | Apply to your body. It will check your experience and arrangements before issuing one |
| AML supervision | Every accountancy service provider | Your professional body supervises you if you hold its practising certificate. If not, register with HMRC |
| Professional indemnity insurance | Required by every professional body for members in practice | Buy cover that meets your body's minimum limit, which rises with fee income |
| ICO data protection fee | Almost every practice, because you process client personal data | Register with the ICO. Most new practices fall into tier 1 |
| HMRC agent services account | Any practice acting for clients with HMRC | Create the account, then get client authorisations |
| Companies House authorised agent status | Practices filing for companies or verifying identities | Register as an Authorised Corporate Service Provider |
| Continuity arrangements | Required by some bodies, sensible for all | Agree who will look after your clients if you cannot work |
| Engagement letters and privacy notice | Every client | Use your body's templates and adapt them to your services |
Three of these deserve more detail.
AML supervision. HMRC’s guidance on who needs to register for money laundering supervision is clear: if a professional body already supervises you, you do not register with HMRC. If you are not supervised by a professional body, HMRC supervises you and you must register. Either way, you need a written AML risk assessment, client due diligence procedures and records from day one.
Professional indemnity insurance. Each body sets its own minimum. ACCA’s published rules, for example, set a minimum of £50,000 per claim for firms with lower income, scaling up with total income and the size of your largest client fee. ICAEW revised its PII regulations from 1 September 2024. Ask a broker who places PII for accountants to quote against your body’s current rules, and check whether run-off cover is included.
ICO registration. The ICO’s guide to the data protection fee sets the current tiers: £52 a year for tier 1 (turnover up to £632,000 or no more than 10 staff), £78 for tier 2 and £3,763 for tier 3, with £5 off for direct debit. A new practice is almost always tier 1.
How do you get HMRC and Companies House access as an agent?
You need two sets of agent access, and both take time, so start them early.
For HMRC, create an agent services account. It is the gateway for Making Tax Digital for VAT and for Income Tax, and for most client authorisations. Clients then authorise you through the online request process, so build that step into your onboarding.
For Companies House, accountants who file for companies or verify identities need to register as an Authorised Corporate Service Provider. Identity verification has been rolling out under the Economic Crime and Corporate Transparency Act, and your clients’ directors and persons with significant control will need verifying. We cover what that means for practices in our guide to Companies House identity verification for accountants.
What does it cost to start an accountancy practice?
Less than most people expect in cash, and more than most people expect in time. The table shows the main first-year costs. Where a price is published we show it. Where it depends on quotes, we say so.
| Cost | First-year guide | Notes |
|---|---|---|
| Practising certificate and membership | Set by your body | Check your body's current fee schedule |
| PII | Quote from a specialist broker | Depends on services, fee income and claims history |
| ICO data protection fee | £52 (£47 by direct debit) | Tier 1 |
| Bookkeeping software | Often free for the practice through partner programmes | Your clients usually pay for their own subscriptions |
| Accounts production | From £156 a year for 12 clients on TaxCalc's published pricing | Other vendors quote on request |
| Tax return software | Varies by vendor and client numbers | Often bundled with accounts production |
| Practice management | From £29 a month on PracticeFlow's published pricing | Free to Xero Silver partners on Xero Practice Manager |
| Website, branding, email | Varies | A simple, clear site is enough to start |
| Company formation | £100 for online incorporation at Companies House | If you trade as a limited company |
Our guides to cloud accounting software for UK practices and MTD for Income Tax software for accountants go further on the software side. The biggest cost in year one is not on that list. It is your own time, spent on work that someone else could do for less.
Should your practice be a limited company, a partnership or a sole trader?
Most new practices start as a sole trader or a limited company. A sole trader practice is simple and cheap to run, and suits a founder testing the market. A limited company limits personal liability, can be more tax efficient once profits grow and looks more established to some clients. If you are starting with a partner, an LLP is the usual structure.
Check your professional body’s rules before you incorporate. Some bodies require the firm itself to be registered or to hold a firm practising certificate, and some have ownership and control rules for firms that include non-members. Our guide to moving from sole trader to limited company sets out the tax side of the decision, which applies to your own firm just as it does to your clients.
How should you price your first clients?
Price for the work you want to keep, not the work you can win. New practices often underprice to get started and then spend years unwinding it. Two decisions matter most.
First, fixed fees or hourly billing. Most small business clients prefer a fixed monthly fee that covers an agreed scope, and it gives you predictable income. We compare the two models in fixed fee vs hourly billing for UK accounting practices.
Second, scope. Write down exactly what each package includes: the number of transactions, the returns, the meetings and the response times. Most scope creep in a young practice comes from vague engagement letters, not difficult clients.
What does your first year look like?
A realistic first year has four phases.
| Months | Focus | What success looks like |
|---|---|---|
| 0 to 2 | Regulation, insurance, agent access, software, engagement letters | You can legally take on and act for a client |
| 3 to 6 | First clients, often from your network or referrals | A handful of clients on fixed monthly fees |
| 7 to 10 | Systems: templates, checklists, deadlines in practice management | Every recurring job runs from a checklist |
| 11 to 12 | The first January self assessment peak | Returns filed on time without working every weekend |
The first January is where many new practices find their limit. Self assessment for individual clients, year ends for December companies, VAT quarters and payroll all land together. Our self assessment 2026/27 deadlines guide sets out what is due and when.
How can a new practice serve more clients than the founder alone?
This is the question that decides whether your practice grows or stalls. A founder who prepares every file personally has a hard ceiling: the hours in the week, minus the time needed to sell, advise and run the business. Once those hours are full, every new client makes the service worse for the existing ones.
There are three ways through the ceiling:
- Hire staff. The traditional route, but slow and expensive at the start. A junior accountant on £32,000 costs about £36,800 a year once employer National Insurance and pension are added, and you need the work to keep them busy all year.
- Use contractors or freelancers. Flexible for peaks, but quality and availability vary, and you still carry the data protection and supervision responsibility.
- Outsource production work. A provider prepares bookkeeping, accounts, returns and payroll to your templates, and you review, sign and keep the client relationship. You pay for what you use, it scales with your client list, and it frees the founder to sell and advise.
Many founders outsource production from early on, so they can spend their own time on the work only they can do: winning clients, advising them and reviewing the output. If you do, your engagement letters should say that you use subcontractors and that data may be processed outside the UK, and you stay responsible for reviewing every file. Our first-time outsourcing decision framework walks through when it makes sense, and our guide to accounting outsourcing pricing models sets out what it costs.
What mistakes do new accountancy practices make?
- Taking every client. A clear niche, by sector or service, makes marketing easier and work faster.
- Underpricing. Low fees are hard to raise later, and they fill your diary with work that does not pay.
- No checklists. Without written processes, every job depends on your memory, and nothing can be delegated.
- Doing everything personally. The founder’s time is the scarcest resource in the practice. Spend it on clients, not on bank reconciliations.
- Leaving AML until later. Your supervisor will ask for your risk assessment and client due diligence records. Build them from the first client.
How Acenteus Accounting helps
We work with UK practices of every size, from new firms to Top 50 firms, as an extension of their team. For a new practice, that means you can say yes to clients before you can afford to hire: our accountants prepare the bookkeeping, VAT returns, year-end accounts, tax returns and payroll in your software and to your templates, and you review, sign and keep the relationship.
You can start small with our Hourly Model for peaks and catch-up work, and move to a Full-Time Model, with a dedicated accountant working only on your clients, when your client list justifies it. Acenteus is a UK company based in Brighton, led by Chris Barnard, a Chartered Certified Accountant and CIMA member with more than 14 years of experience, with delivery from our dedicated centres in India under UK oversight.
“Joel and the team at Acenteus have been instrumental in our firm’s growth,” says the Director of Reynolds Accounting.
See how it works on our accounting outsourcing for UK accountants page, or tell us about your new practice and we will suggest how to handle your first January.
Frequently Asked Questions (FAQ)
A practising certificate from your professional body or HMRC AML supervision, professional indemnity insurance, ICO registration, an HMRC agent services account, Companies House authorised agent status, engagement letters and a software stack.
No. The title accountant is not protected in the UK, but anyone providing accountancy services by way of business must be supervised for AML, and audit and insolvency work need specific licences. Most clients and insurers expect a recognised qualification.
The fixed costs can be modest: the ICO fee is £52 for most new practices, accounts production software starts from about £156 a year, and practice management from about £29 a month. Practising certificate fees and PII depend on your body and insurer. The biggest cost is the founder's time.
If you are a member of ICAEW, ACCA, ICAS or a similar body and you offer accountancy services to the public, you will normally need one. Check your own body's rules, as the definitions of public practice differ.
Your professional body, if it supervises you as a member in practice. If you are not supervised by a professional body, you must register with HMRC.
Yes. Many founders outsource production work from the start so they can spend their time on sales and advice. Your engagement letters must disclose subcontracting and overseas processing, and you must review the work before it is filed.
Many founders start as a sole trader and incorporate once profits grow, while others incorporate from day one for limited liability. Check your professional body's rules on firm registration before you choose.
