Query: Can I Provide Bookkeeping Services?

Gametime

Hi all,

Have a quick query. I've been asked by a few friends who work as Sole Traders in mainly farming and asked if I can help them with their bookkeeping and tax returns.

My query as a qualified chartered accountant am I allowed by ICAI/CAI to provide these services? I presume through carrying out such services I shall not be required to sign anything as I am not preparing the accounts.

Just seems like a good opportunity but obviously do not want to jepordise my qualification with the Institute.

Thanks in advance for any help!

P.S. Anyone on here have any experience of carrying out such services in their spare time?

smeharg

Have a look at the practising certificate regulations on the CARB website here (you'll need to scroll down to the bottom of the page).

Basically, you'll need a pracising certificate unless you're doing it for free. To be eligible for a PC you need to be a member for at least 2 years and get professional indemnity insurance. I stress "member" as this is the date you were admitted as an associate, not the date you passed FAE. For certain things you may also need investment business authorisation.

You might also need to consider what your employer will think about it if and/or when they find out. There could be a clause in your employment contract that prevents you from taking on any other work. This could be particularly problematic if you are working in practice and it's perceived that you are in direct competition with your employer.

dbran

Hi

You can carry out basis bookkeeping services to trial balance, paye and vat returns without a practicing cert.

You cannot prepare tax returns, even if you do it for free, unless you hold a valid current practicing cert.

Kind Regards

dbran

smeharg

dbran wrote: »

Hi

You can carry out basis bookkeeping services to trial balance, paye and vat returns without a practicing cert.

You cannot prepare tax returns, even if you do it for free, unless you hold a valid current practicing cert.

Kind Regards

dbran

This is not quite correct. A member providing bookkeeping services as you describe won't need a practising certificate, but:

"A member will be deemed to be in practice if he holds himself out in such a way as to create an impression to the public that the quality of the services provided will be enhanced by virtue of the provider being a Chartered Accountant. Use of designatory letters after the members name will not generally constitute holding out." - Appendix 1 of the practice cert guidance.

So if provide these services and don't have a practising certificate you cannot let on that you are a chartered accountant, which might be pretty difficult in practice (no pun intended!)

Secondly, paragraph 2.3(f)(iii) of the practise cert regulations states that "a member who gratuitiously or for a nominal fee...provides accountancy or tax services for family members or friends..." shall not be deemed to be in public practice, and therefore won't require a practising certificate.

There appears to be no restriction on providing tax services to friends/family for free.

dbran

Hi Smeharg

I take your point that you cannot refer to your membership of an accountancy body (or potential membership) which is of course correct.

Also I agree that technically you could prepare tax returns for free and still not need a practicing cert but the restrictions are quite onerous.



If I just quote the full text of what you quoted

"provides accountancy or tax services for family members or friends provided these third parties are aware that the services are not being provided by way of a business and no fee is charged."

Also taken direct from the ACCA Rulebook

2.2 The Chartered Certified Accountants' Global Practising Regulations 2003
4. Meaning of public practice

(3) Honorary reports
The activities set out in regulation 4(1)(b) shall not constitute public practice where all of the following conditions are satisfied:
(a) the accounts are of an entity which does not require the appointment of an auditor; and
(b) no fee is payable or other material benefit receivable in respect of the work performed; and
(c) the gross income of the entity for the year prior to the year in question does not exceed £100,000; and
(d) the aggregate of such gross income with such gross income of any other entity in respect of which the member has relied upon this regulation 4(3) in the calendar year in question does not exceed £200,000; and
(e) any third parties are made aware that the activity has been carried out by an Honorary Reporting Accountant; and
(f) the member does not hold himself out, or allow himself to be held out, as a sole proprietor, partner or director of a firm, or designated member or member of a limited liability partnership, where public practice is carried on.

So effectively you would have to inform the revenue that you prepared the accounts as an honorary accountant, and any other entity such as a bank etc that was relying on the return or report. And also bear in mind you cannot be receiving any material benefit whatsoever.

If you breach any of the rules then you are carrying out public practice and all it takes is an error in a tax return to turn a friend into a report to the institute. This is especially true if there is money involved.

Clearly these rules are designed for just a non profit making club or charity and not as a way around getting qualified and a cert.

Kind Regards

dbran

smeharg

dbran wrote: »

....
You cannot prepare tax returns, even if you do it for free, unless you hold a valid current practicing cert.

....
dbran

Hi dbran

The CARB regualtion you have quoted in full permits this if no fee is charged, the recipient is aware no fee is charged and the services are not provided by way of a business.

Gametime wrote: »

...
My query as a qualified chartered accountant am I allowed by ICAI/CAI to provide these services?

...

ACCA regualtions don't apply to a member of Chartered Accountants Ireland.

backtothebooks

Gametime wrote: »

Hi all,

Have a quick query. I've been asked by a few friends who work as Sole Traders in mainly farming and asked if I can help them with their bookkeeping and tax returns.

My query as a qualified chartered accountant am I allowed by ICAI/CAI to provide these services? I presume through carrying out such services I shall not be required to sign anything as I am not preparing the accounts.

Just seems like a good opportunity but obviously do not want to jepordise my qualification with the Institute.

Thanks in advance for any help!

P.S. Anyone on here have any experience of carrying out such services in their spare time?

It's probably just best to contact the CAI (01-6377200) and speak to someone in Members Services.