How to create a professional clearance letter template

Professional clearance is a mandatory ethical requirement for UK accountants that involves contacting a new client's previous advisor to ensure there are no professional reasons to decline the engagement. By sending this letter, you fulfill your professional body's code of ethics while simultaneously gathering the essential financial data—such as trial balances and tax returns—needed to take over the client’s affairs seamlessly.

Why professional clearance is essential

In the UK, professional bodies like the AAT, ACCA, ICAEW, and CIMA require you to communicate with the outgoing accountant before starting work. This process, often called "professional enquiry," serves two main purposes:

• Ethical Check: It asks the previous accountant if they are aware of any professional reasons (such as illegal activity or ethical conflicts) why you should not accept the appointment.
• Handover of Information: It allows you to request the client's historical data, ensuring you don't have to recreate accounts from scratch.

Step 1: Get client authority first

Before you contact the previous accountant, you must have written permission from your new client. Under data protection laws (GDPR), the outgoing accountant cannot legally share information with you without the client’s explicit consent. Usually, this is a simple "Letter of Authority" signed by the client, which you should attach to your clearance request.

Step 2: Drafting your template

A professional clearance letter should be polite, formal, and clear. Your template should include the following core sections:

The introduction

Clearly state that you have been invited to act as the accountant/tax advisor for the client and that you have their permission to contact them.

The "Big Question"

You must specifically ask: "Are you aware of any professional or other reasons why we should not accept this appointment?" This is the most critical part of the letter for compliance purposes.

The information request

To make the transition smooth, include a list of the specific documents you need. While this varies by client, common requests include:

• A full trial balance for the last completed period.
• Copies of the most recent sets of accounts.
• Tax computations and copies of submitted tax returns (VAT, Corporation Tax, or Self-Assessment).
• A schedule of any carry-forward losses or capital allowance pools.
• Payroll records and pension details if applicable.

Professional clearance letter structure

While you should adapt this for your firm's branding, here is the standard structure your template should follow:

Section	What to include
Reference	The full name of the client and their business name (if different).
Intent	A statement that the client has approached you to take over their accounting affairs.
Ethics	The formal request for any professional reasons to decline.
Data Request	A bulleted list of the financial records required for the handover.
Closing	A polite request for a response within a reasonable timeframe (usually 14 days).

Tips for a smooth handover

Professional Courtesy: Remember that the outgoing accountant may be disappointed to lose the client. Keeping your tone professional and courteous helps speed up the process.

• Set a deadline: Give the previous accountant a reasonable timeframe to respond, typically two to three weeks.
• Follow up: If you haven't heard back, send a polite follow-up email. If they refuse to respond without a valid reason, you may need to report the matter to your professional body.
• Unpaid fees: Sometimes an accountant will refuse to hand over records because the client hasn't paid their final bill (known as a "lien"). While they can sometimes withhold documents they created, they generally cannot withhold the client's own original records.