If you wish to use more than one accountant, there’s nothing stopping you.
In fact, it might even make sense for some business owners who would benefit from specialist expertise, or just want to keep their bookkeeping and accounting separate.
But having multiple accountants isn’t for everyone.
There are also good reasons to stick with one and keep everything under the same roof, as it were.
In this article, we’ll weigh up both sides to help you decide what’s right for your business, according to your own unique circumstances.
Can you have more than one accountant?
Yes, a business can use more than one accountant or accounting firm, and there’s generally no requirement to use a single firm for every accounting service.
Still, it’s important to understand who is responsible for each task in order to avoid confusion.
There’s also a difference between appointing multiple accounting firms and authorising multiple tax agents to deal with HMRC on your behalf, which can involve service-specific restrictions.
Why might a business use two different accountants?
There are lots of reasons, including using a specialist for particular services, or to separate different elements of your finances.
Using a specialist accountant for specific services
You may want to hire a tax specialist to help with complex planning, or simply to offer ongoing support. At the same time, you might use another firm for an audit or specialist advisory work in a particular area.
An example could be getting expertise for international transactions or business restructuring, or even for industries covered by specialist tax rules – such as farming.
Separating personal and business finances
The director of a limited company might decide to use one accountant for the company’s annual accounts, and another for their personal Self Assessment tax return.
This arrangement is a clean way to compartmentalise your finances, although you have to ensure both accountants or accounting firms are on the same page regarding things like salary, dividends, and benefits.
So, communication is key.
Splitting accounting responsibilities between firms
This is where one accountant handles bookkeeping and VAT returns, say, while another handles payroll, annual accounts, or tax returns.
Clearly defined responsibilities help to safeguard against possible confusion or overlap, and they also stop a single accountant from becoming overwhelmed (for example, if they had to do everything themselves).
It does mean you’ll lose out on the benefit of one person seeing the bigger picture though – or it at least makes it more complicated to achieve that.
Can two accountants deal with HMRC on your behalf?
HMRC agent authorisation is the process of giving an accountant or tax adviser permission to deal with HMRC for you.
Without this authorisation, an accountant generally can’t access your tax information or discuss your tax affairs directly with HMRC.
You can use two accounting firms, but HMRC agent authorisation doesn’t necessarily allow both to act for the same tax service simultaneously, and so appointing a new agent may replace an existing one if you’re not careful.
It’s worth noting, though, that Making Tax Digital (MTD) for Income Tax works differently. Sole traders and landlords can appoint one main agent alongside one or more supporting agents, each with different levels of access. Even so, it’s important to be clear about which firm holds which role.
What are the disadvantages of using more than one accountant?
We’ve covered when it might be appropriate to use multiple accountants as a business owner, but there are some drawbacks, too…
Confusion over responsibilities
While you can certainly try to keep everything organised, it’s not always that easy, and so you run the risk of tasks being duplicated – or even missed entirely.
What’s more, there could be uncertainty around who is supposed to communicate with HMRC, and submit things like your tax returns.
There’s also potential for conflicting advice, which obviously isn’t productive and could cause you to second-guess decisions you make in running your business.
Problems sharing financial information
Different accountants work in different ways, and so you could face difficulties trying to coordinate deadlines and changes.
They may also be working with incomplete or outdated records.
It helps to keep everyone in the loop, and this is where good bookkeeping software comes into play, enabling you to share your financial records in real time.
Bear in mind that good bookkeeping software is nothing without accurate and up-to-date records, though, so be sure to stay on top of this.
Additional accounting fees
This almost goes without saying, but hiring more than one accountant also means paying for more than one accountant, and depending on how well-organised you are, you could be paying for overlapping services.
In addition, there’s likely to be extra admin required when coordinating multiple firms, as opposed to just one.
A single provider tends to be the more cost-effective option for most routine accounting requirements.
Is it better to use one accountant for everything?
Generally speaking, it’s better to have one central contact for bookkeeping, payroll, VAT, and tax returns.
Some businesses may still benefit from specialist support in key areas, so consider your business structure, complexity, and accounting needs before reaching a final decision one way or the other.
Find more help in our online accounting hub, and learn more about how to find the right accountant for your business.
