How to establish a professional clearance procedure

Professional clearance is a mandatory ethical check that ensures you aren't walking into a situation involving professional misconduct, unpaid fees, or illegal activity. Before you accept a new client, you must obtain their permission to contact their previous accountant to ask if there are any "professional reasons" why you should not take them on. This process protects your reputation and helps you avoid high-risk clients.

Why professional clearance matters

In the UK accounting and tax industry, "professional clearance" (sometimes called an ethical enquiry) is a requirement of most professional bodies (such as AAT, ATT, or CIOT). It isn't just a courtesy; it is a key part of your risk management. It allows the previous advisor to disclose—with the client's permission—if the client has been involved in anything untoward, such as tax evasion or aggressive behaviour, or if there is a conflict of interest.

Step 1: Obtain client consent

Under GDPR and professional ethical codes, you cannot contact a previous accountant without the client's explicit written authority. The best way to do this is to include a clause in your onboarding paperwork or send a simple email for them to sign and return.

Action: Ask the client to send a "letter of change" to their old accountant, notifying them that they are moving to your firm and authorising the old accountant to discuss their affairs with you.

Step 2: Draft your clearance request

Your request should be formal, polite, and sent via a trackable method (like email with a read receipt). Your template should include:

• The client's full name and business name.
• A statement that you have been asked to act for them.
• A specific question: "Are there any professional reasons why we should not accept this appointment?"
• A request for handover information (e.g., the last set of accounts, tax returns, and opening balances).

"Dear [Name of Previous Accountant],
Our mutual client, [Client Name], has instructed us to act as their tax advisors. We have been provided with written authority to contact you. Please let us know if there are any professional reasons why we should not accept this appointment. Furthermore, we would be grateful if you could provide the following handover information..."

Step 3: Review the response

Usually, the previous accountant will reply saying "there are no such reasons." You can then proceed with confidence. However, if they highlight issues—such as unpaid fees or suspicious activity—you must weigh up the risks. If the previous accountant mentions a "Material set of circumstances," you may need to decline the client to protect your own business.

Best practices for a smooth handover

Scenario	Recommended Action
No response received	Send a follow-up after 14 days. If there is still no reply, you may proceed, but do so with caution and document your efforts.
Previous advisor is a "friend"	Stay professional. Even if the client says they have no previous accountant, double-check if they have filed returns recently.
Information is missing	Be specific about what you need (e.g., UTR numbers, VAT records) to avoid a long back-and-forth.

Tips for success

• Don't start work yet: Avoid doing any billable work until the clearance process is complete. If a red flag appears, you don't want to be legally tied to that client.
• Keep records: Always save a copy of the clearance letter and the response in your client's permanent file. This is vital for your own professional body inspections.
• Professional courtesy: Remember that you will one day be on the receiving end of these letters. Respond to others' requests promptly to maintain a good reputation in the industry.