Advice re: becoming self-employed MIP

TheoVK

Hello all,

This appeared to be the most appropriate forum, but please excuse me if it is not. I wonder if I could ask for some advice. I am considering trying to become a part-time self-employed MIP with the AAT as a secondary source of income. Please forgive the long post, but before I ask any specific questions, I just wanted to give some background to add a little context to my situation.

I graduated with a BA(Hons) in Accounting back in 2000. I struggled to really get into the degree at that time, having no prior accounting experience at college or in practice, and just generally limited interest in the subject matter. Nevertheless, I got through it, and I did also spend about 12 months after graduating in temp purchase/sales/general ledger and credit control roles. I was offered a trainee accountant role, but ultimately did not pursue this, and later landed on a career in IT instead, starting as a graduate trainee and moving up through the grades to IT Consultant. I have worked in IT for 10 years.

For various reasons which I need not go into, I now need to look at additional sources of income. Given my degree, Accountancy seems a logical choice, and as far as my earlier reluctance goes, I believe I will have more interest and patience for the mechanics of it now than when I was younger (having been involved in the build and maintenance of various bespoke accounting software, I think I have had enough exposure to the sharp end, if not on a practitioner level, to be able to make this judgement). However, at this stage, and due to my primary motivations, its probably not realistic to fully retrain and go as far as trying to become a chartered accountant (ACCA/CIMA etc). So, my current plan, based on a little research, is as follows:

• Study AAT, jumping straight to level 4, through distance learning, while continuing to be employed in my current role. This is primarily to re-gain confidence (and the necessary credentials) to setup as an MIP with the AAT. I am hoping this will take me about 12 months if I work steadily (4-5 hours study per week). Realistically, I may not have time to both study and try to take on clients given that I will be keeping my current job, so I thought it best to get the studying out of the way first.
• Once I have completed level 4, I will look for clients. I may also do some voluntary work for a local Accountant's practices to gain the necessary variety of experience and fill any gaps in my basic accounting (I guess I may have to brush up on a few basic areas as I suppose AAT level 4 won't refresh everything). I expect this to take around 12 months, at which point I think I can apply for MIP (please correct me if I am wrong).
• Try to achieve FMAAT status somewhere along the way.

I hope this will serve as an additional source of income, with the additional benefit of giving me something else to fall back on in the unfortunate event of my IT skills become redundant at any point.

My questions are:

Does anyone out there have any experiences of being a part time self-employed MIP with the AAT while being full time employed in an unrelated profession? How has this worked out for you? Does what I have mentioned above seem a prudent/sensible approach? Is there a better way I can approach this? Is there anything else I need to consider? Are there any obvious pitfalls I am missing?

Also, is there anything to be gained from starting lower on the AAT ladder (eg level 3), bearing in mind I studied Accounting at degree level? I don't want to spend too much money (or time) on study in the short term before being able to practice as a MIP if I dont have to. I do feel that starting at level 3 probably isn't necessary, and level 2 would probably be way too low, but open to feedback from those with more experience. AAT is stated to be below the standard of a degree, but I do believe AAT is generally more respected and more relevant in practice, and probably quite critical to helping me get clients as a self-employed accountant/bookkeeper, would that be fair to say? Even if this were not true, I do need some way of getting back into accounting after 13 years.

Any general feedback and comments on what I have said is very greatfully received.

Thanks very much for reading,

Theo

Jo Clark

Hello Theo and welcome to the forum

TheoVK wrote: »

• Study AAT, jumping straight to level 4, through distance learning, while continuing to be employed in my current role. This is primarily to re-gain confidence (and the necessary credentials) to setup as an MIP with the AAT. I am hoping this will take me about 12 months if I work steadily (4-5 hours study per week). Realistically, I may not have time to both study and try to take on clients given that I will be keeping my current job, so I thought it best to get the studying out of the way first.

Re your point above and starting at level 4, as far as I know to be awarded the qualification you need to complete level 3 and 4. However, having an accounting degree may give you some exemptions but I don't know - your best bet is to call the AAT Membership services and seek advice from them.

Also, is there anything to be gained from starting lower on the AAT ladder (eg level 3), bearing in mind I studied Accounting at degree level?

A good foundation and greater understanding for material studied at level 4. What you studied in your degree will help however I firmly believe that you should do level 3 before level 4. If you are self studying hopefully you should not find the cost too much as there are lots of posts which have discussed this area before.

Good luck whatever you do.


JC

TheoVK

Thanks for the comment Jo. I'll contact the AAT and clarify the requirement, and will also weigh up the cost/benefit of doing level 3 as well. When I took the online skills test it did recommend starting at level 3 (even when I answered every single question correctly!) which sort of tells me that AAT agree with your recommendation, but I will see what they say. Thanks again for your input :001_smile:

JodieR

Hello,

I think that what you're suggesting could work, but I would say that the key to making it work will be developing stong relationships with local accountants as you'll probably need some support even after you have become an MIP. I woud say that one years part time experience plus AAT qualification will be sufficient to prepare VAT returns and payroll and very simple sole trader accounts/tax returns, but further than that you might struggle, so if you can get yourself set up so that you can do the basic work for clients and then pass final accounts/tricky queries onto another accountant then that should work out well for everyone.

Good Luck!

Jodie

TheoVK

Thanks Jodie, thats useful to know!

TheoVK

Hello, me again. I have sent an enquiry to the AAT and waiting for their response about exemptions/qualifications etc, but one thing I am a little confused about is how to go about gaining the right mix of experience, with respect to regulatory/legal requirements around what services I would be allowed to provide, considering that I will attempting to gain MIP status purely as a self-employed/voluntary worker. I suspect much of this will become more clear when I start engaging with local accountants and picking up bits of work, but are there any services I need to be careful about offering (whether paid or voluntary) while I am in the process of trying to achieve the status of registered/licensed MIP? I noticed another post on this site around being an MIP and the legal requirements for various services, and the Money Laundering Act was also mentioned, which is why I ask.

Jonno1

Hi,
I'm pretty much in the same boat, I do not work full-time in accountancy, but I have achieved AAT level 4 2 years ago (but have not registered for MIP), and would like to take on some book keeping/accountancy work in my spare time to keep my skills up to date and to earn some money in my spare time. I was interested in your comment on contacts with local accountancy practices - how do you intend to do this? Do some practices outsource their excess work to local book keepers, or do they outsource self assessment tax return completions for clients? I would like to pick up on these areas of work.
Jonno1

TheoVK

Hi Jonno,
To be honest, I am not sure what practices generally do in this regard. However, my plan is to offer to work pro bono to begin with (my services for free in exchange for a little mentorship, support, a good mix of the right sort of work and, more crucially, acting as a professional reference for AAT, when I have completed enough experience to apply for MIP). They may be willing to start paying me after a while, I don't know, but my hope is that most practices would be keen on this arrangement (Id appreciate any other viewpoints).

deanshepherd

I'm struggling to see what you are really trying to achieve here.

If you are looking for a way to supplement your IT consultancy income surely there are easier ways than revisiting something you studied 13 years ago and had little interest in back then.

Even if you fast-track your way to AAT membership they will not allow you to sully their reputation by authorising you to conduct work in any areas that you are not fully competent in. Right now, you are not competent in any area of accountancy practice having never yet worked in that environment. At best, even after 1 year of study you are probably only going to be allowed to do bookkeeping and even then your knowledge of VAT would probably be insufficient to be able to provide anything but the most basic service.

I am not trying to knock your efforts but to reverse the situation, I run an accountancy firm but graduated with an IT degree. If I wanted to supplement my income the least effective way for me to do so would be to do a few refresher courses and set up a software development company. In fact, it would be a tragic waste of time and money.

If, however, you are doing this as a career change and it's something you really want to do then go for it. But even with your degree you are right at the bottom and have a long journey ahead of you.

TheoVK

Hi Dean,
Thanks for your comments. These are all valid points - actually I was wondering when someone would ask the obvious and fair question: why don't I just try to get a better paid IT job, or try to work towards a payrise etc. The answer to this is that I am actually very happy with my current employer, and in particular with the location and working environment. I also love IT.

Initially my motivation to action was to find an additional source of income without having to leave my current role. However, there are a number of other reasons I am looking towards accountancy (as opposed to just trying to further my IT career with my current employer). I have found that, whilst IT can be a very dynamic and exciting career, you are always at high risk of your skills becoming redundant very suddenly, especially in technical roles, which is not true to nearly the same extent in other professions such as Accountancy. I deliberately make the distinction between "skills" and "role" here, when referring to being made redundant, because I do appreciate that accountants are just as much at risk of loosing their jobs (maybe even more so in my particular organisation) but although I have not personally experienced my IT skills becoming redundant just yet, I find the prospect of this much more upsetting and discouraging than just being made "redundant", which I view as just being a fact of life. My point is that, in my view, a qualified accountant who is made redundant can go into the job market with a great deal more confidence than a computer programmer with expertise in a very specific technology whose skills are no longer needed. I suppose I am trying to be prudent as I get towards middle age (I am 35), and want to try to move into a profession which offers a little more security, and stability. Given my degree, Accountancy seems a logical choice, and as far as my earlier reluctance goes, I believe I will have more interest and patience for the mechanics of it now than when I was younger (having been involved in the build and maintenance of various bespoke accounting software, I have had a little exposure to the sharp end, if not on a practitioner level, to be able to make this judgement).

So, to answer your other question, yes, long term, I expect this to be at best a career move into a profession which I perceive to have more stability, and at worst, a way of earning a little extra money. Perhaps it is a little optimistic of me to think that practising Accountants would be willing to take on pro bono work in exchange for the appropriate mentoring and, as you rightly point out, taking the risk of affecting their professional indemnity. But everyone has to start somewhere, this is just the best course of action I can think of. I am open to other suggestions about how to move forwards.

Thanks again for your comments, they are valuable, and I will take them into consideration.

deanshepherd

I see, that makes sense.

Actually, my Uncle learned to be a driving instructor for very similar reasons. Something he could do for a bit of part-time cash, something he already has some knowledge of, and as a back-up career. His reasoning was slightly different in that he wanted to eventually slow down to part-time work which would never be an option in his industry.

TheoVK

Actually your uncles reasoning is not that far away from mine. My employer has an early retirement scheme which I will be eligible for when I'm over 50, if I am made redundant. If I am still in IT by that point, but am made redundant and/or have to take early retirement, I would like something that I can fall straight into where I can choose my hours and be self employed. It may be a long journey to MAAT/MIP status for me, but hopefully not 15 years!