C · Client onboarding & engagement
Professional Clearance Letter: Template and Process
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Quick answer
Professional clearance is the courtesy and ethical step of writing to a prospective client's previous accountant before accepting the appointment, asking for any reason you should not act and requesting handover information. Most professional bodies expect it; the outgoing accountant should reply within a reasonable time, typically two to three weeks.
Key takeaways
- Send a professional clearance letter before formally accepting a new client, not after.
- Clearance checks for reasons you should not act — unpaid fees are not a valid reason to withhold clearance itself, though the old firm can hold records until fees are paid.
- Request specific handover information: tax references, latest accounts, tax computations, and outstanding matters.
- A non-reply after a reasonable chase does not block you from proceeding, but document your attempts.
- Keep a copy of the clearance letter and response on the client file for AML and ethics purposes.
What is professional clearance and when is it required?
Professional clearance is a written request from a new accountant to a client's previous accountant, asking whether there are any professional reasons why the appointment should not proceed.
It is an ethical requirement built into the codes of ICAEW, ACCA, AAT, ATT and CIOT. Before you accept an appointment to act for a new client who was previously served by another accountant, you should write to that accountant seeking clearance. The purpose is not bureaucratic box-ticking: it protects the public interest by giving the outgoing accountant a chance to flag anything relevant, such as unresolved money laundering concerns, disputed fees, or evidence of dishonesty by the client that you would want to know before taking the client on.
You should seek clearance whether the client approaches you directly or is introduced through a referral. The obligation sits with you, the incoming accountant, not the client — although in practice the client usually needs to give the outgoing firm permission to respond, since client information is confidential.
When clearance is not needed
If the client has never had an accountant, or the previous adviser has closed the practice and cannot be traced after reasonable effort, clearance is not possible and you can proceed with a note on file explaining why. The same applies for genuinely informal, one-off pieces of advice rather than a full engagement, though most bodies still recommend it as good practice for any recurring compliance work.
What should a professional clearance letter include?
State that you have been asked to act, confirm you have the client's written authority to make contact, and ask two things: any professional reason you should not accept the appointment, and any information relevant to a proper handover.
- Your firm's name, AML supervision status and contact details
- Confirmation the client has authorised the request (attach the client's signed authority if the outgoing firm asks for it)
- A direct question: 'are there any professional reasons why we should not accept this appointment?'
- A request for outstanding tax references (UTR, VAT number, PAYE reference)
- A request for the latest accounts, tax computations and any open HMRC enquiries
- A reasonable response deadline, typically two to three weeks
Keep the tone professional and collegiate — you may be on the receiving end of one of these letters yourself one day.
What does a professional clearance letter template look like?
A short, factual letter or email covering the request for clearance, the specific handover documents needed, and a deadline for reply.
Below is a template you can adapt on your own letterhead. Keep the wording simple and avoid asking for anything beyond what you genuinely need for the handover.
Dear [Previous Accountant], We have been asked by [Client Name] to act as their accountants for [services, e.g. annual accounts, corporation tax and payroll] and understand you have previously acted for them. Enclosed is the client's written authority for you to respond to this letter. Please could you confirm, in accordance with your professional body's ethical guidance, whether there are any professional reasons why we should not accept this appointment. It would also assist the handover if you could provide the client's UTR/VAT/PAYE references, the last set of filed accounts and tax computations, and details of any outstanding matters with HMRC or Companies House. We would be grateful for a response within [three weeks]; if we do not hear from you by then, we intend to proceed on the basis that there is no objection. Yours sincerely, [Your Firm].
Can the previous accountant refuse clearance over unpaid fees?
No — unpaid fees alone are not grounds to refuse professional clearance, but the outgoing accountant can exercise a lien over client records and withhold documents until fees are settled.
This distinction trips up a lot of new practice owners. The previous firm cannot say 'we won't give clearance until they pay us' — clearance is about whether there is an ethical reason you should not act, and a fee dispute is a separate commercial matter. What they can do is decline to hand over documents they hold (a lien), particularly for work not yet paid for, unless local law or their engagement terms say otherwise.
If a client owes fees, be transparent with them early: you may need to recreate opening balances or obtain records directly from HMRC or Companies House rather than waiting on the old firm.
How long should you wait for a clearance response?
A reasonable period is around two to three weeks; if there is no reply after a follow-up, you can generally proceed and note the file accordingly.
| Stage | Typical timing | Action if no response |
|---|---|---|
| Initial letter sent | Day 0 | — |
| Follow-up reminder | Day 14 | Resend by email and phone |
| Decision point | Day 21–28 | Proceed and document reasonable attempts made |
| File note completed | Before first work starts | Record dates, method and outcome |
How does professional clearance relate to AML checks?
Clearance is an ethical step; it does not replace your own client due diligence and risk assessment obligations under the Money Laundering Regulations 2017.
You still need to carry out identity verification, source-of-funds checks where relevant, and a risk assessment on every new client regardless of what the previous accountant says. A clean clearance response is reassuring context, not a substitute for your own AML file. If the previous accountant flags a concern relevant to money laundering, you should factor that into your client risk assessment and, in some circumstances, consider whether a suspicious activity report is needed once you understand the facts.
What handover information should you request after clearance?
Ask for tax references, the last filed accounts and computations, working papers relevant to ongoing matters, and details of any open enquiries or deadlines.
- UTR, VAT registration number, PAYE reference and Companies House authentication code (or arrange your own ACSP verification)
- Last filed statutory accounts and corporation tax computations
- Latest self assessment return and supporting schedules
- Details of any open HMRC enquiries, payment plans or penalties
- Payroll year-to-date figures and pension scheme details if mid-year
- VAT return history and any partial exemption or scheme details
- Fixed asset register and depreciation policy
- Any signed engagement letter or letter of authority still in force
How Remindoo helps
Chasing clearance letters manually is easy to lose track of when you're juggling several new clients at once. Remindoo's client onboarding tools let you build a standard onboarding request for each new client — including a task to send the clearance letter, a follow-up reminder, and a checklist for the handover documents you need back. Because it sits on the client's timeline in Remindoo's client management record, you and any team member can see at a glance whether clearance has been requested, chased or received, rather than relying on someone's memory or an inbox search. Recurring tasks and status tracking mean nothing gets started before the file is properly ready, which matters when you're building a professional reputation with a new practice.
Frequently asked questions
Is professional clearance a legal requirement?
It is an ethical requirement under most UK accountancy body codes of conduct rather than a statutory legal obligation, but ignoring it can put your membership at risk.
Do I need the client's permission to request clearance?
Yes. Client information is confidential, so the outgoing accountant will usually want to see written authority from the client before responding to your letter.
What if the previous accountant never replies?
Chase once after roughly two weeks, then proceed if there is still no response, keeping a clear file note of the dates and method of your attempts.
Can I refuse to give clearance to another accountant?
You can raise a genuine professional concern, but you should not withhold clearance simply because you are unhappy about losing the client or because fees are outstanding.
Does clearance cover VAT and payroll agents separately?
If different firms handled different services, send clearance requests to each one relevant to the work you are taking on.
Should sole traders and small unincorporated clients still get a clearance letter?
Yes, the same ethical principle applies regardless of the client's legal structure or the size of the engagement.
What happens if clearance reveals a serious issue?
Consider it carefully as part of your risk assessment before deciding whether to accept the client, and take advice from your professional body's ethics helpline if unsure.
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Sources
Last updated 23 September 2026. General guidance, not legal or regulatory advice. Check with your professional body.
