Agree what is moving
List the services you want the new firm to take over. Payroll, bookkeeping, annual accounts, council and NHS fee-income reconciliation, credit control and monthly reporting are separate tasks. Agree the companies covered, payroll frequency, reporting dates and the information you will supply.
Fee-income reconciliation means matching what you billed for care against the hours delivered, remittances and receipts. It is separate from the regulatory fee you pay to the Care Quality Commission (CQC), the care regulator in England. Use the correct description in the engagement so neither task is assumed to cover the other.
Five stages to plan
1. Check the current engagement and upcoming deadlines
Review the notice terms and outstanding work with your existing firm. List the next payroll and pension dates, tax returns and any other agreed deliverables. Confirm who will finish each item and the date their responsibility ends. Moving accountants does not move statutory deadlines.
2. Authorise the records request
The incoming firm can make professional enquiries, meaning asking the previous accountant about matters relevant to taking on the work, and request the records with your authority. Confirm how notice will be given under your existing engagement. A professional enquiry letter is not automatically a substitute for that notice.
Agree the information to transfer, including the latest accounts and tax computations, bookkeeping balances, outstanding queries, payroll history and pension files. Record anything still missing and who is following it up.
3. Complete the required HMRC authorisations
HM Revenue and Customs (HMRC), the UK tax authority, uses different authorisation routes for different taxes and services. Value Added Tax (VAT) may use an online approval link, often called the digital handshake, while other services may require a different online process or form. One approval should not be assumed to cover Corporation Tax, Pay As You Earn (PAYE) payroll reporting and VAT together.
Ask the new firm to list the required authorisations and check access before the first filing. Approve requests using your own account and never share your HMRC sign-in details. See HMRC's authorisation methods and its client guidance for approval links.
4. Transfer access and reconcile the opening records
Arrange named-user access to the agreed accounting, payroll and care-record systems. Check who controls each subscription, retain appropriate administrator access and preserve a usable copy of your records. Use invitations and permissions rather than sending passwords.
The new team should check opening balances, outstanding invoices, payroll year-to-date figures and any unresolved tax or bank differences. Historic clean-up work should be identified and priced before it is treated as part of the regular monthly cycle.
5. Confirm the first live payroll and reporting cycle
Agree the information cut-off, who prepares the payroll, who checks it and who approves the payments. Confirm the pension submission and first tax filing separately. Keep the previous arrangement in place until the agreed handover checks are complete, and have an escalation contact if records or access are delayed.
Care payroll needs its own review
A care-agency handover should check the way the payroll uses delivered-hours and travel records, rather than copying a previous calculation without review.
- Minimum wage. Travel between work assignments can count as working time; ordinary commuting is treated differently. Check the relevant hours and pay over the worker's pay reference period, the period used for the minimum-wage calculation. HMRC explains working and travel time.
- Holiday pay. Rolled-up holiday pay, an extra payment made with wages instead of paying when leave is taken, is available only for eligible irregular-hours and part-year workers under the relevant rules. The statutory 12.07% payment calculation uses total pay, not hours. Holiday entitlement calculated in hours is a separate calculation. Check the government's holiday-pay guidance.
- Pensions and employer costs. Check the scheme's pensionable-pay basis, contributions and submission dates alongside employer National Insurance. The standard minimum employer pension contribution is 3% of qualifying earnings where that basis applies; scheme rules or employment terms can require more. See the employer pension guidance.
Check the care contracts and VAT treatment
Qualifying welfare services supplied by an eligible regulated provider can be exempt from VAT. Registration with a regulator does not make every supply exempt. Supplying staff or charging an arrangement fee can have a different treatment, so check what the contract actually provides. HMRC's Welfare services and goods notice explains the distinction.
Agree how council, NHS and private fee income will be checked against delivered care, how deductions are queried and who follows up overdue invoices. If you need financial evidence for a regulator, lender or acquisition, agree that separate deliverable rather than assuming it is included in routine bookkeeping.
Check whether registered details are changing
Appointing a different accountant does not by itself transfer the care provider's registration. If the move also changes the registered provider, activities, location or contact details, check the relevant requirements. CQC's registration-change guidance describes changes that need an application or notification.
What you still provide and approve
You supply accurate care and pay records, approve the payroll and authorised payments, answer operational queries and make the business decisions. Agree who monitors the handover checklist and any deadline that falls during the transfer. A new engagement alone does not prove that records, authority and system access are ready.
Start with a free 15-minute initial call to discuss the work and deadlines, or request a 30-minute care finance health check for a fuller discussion.
Prefer to speak directly? Call 07450 258975 or message Kris on WhatsApp. We are open Monday to Saturday, 10am to 7pm.