Becoming a freelancer?

davidfox

I'm considering starting one of the AAT courses soon and am wondering how plausible it would be to have a career as a freelancer (either bookkeeper or accountant) with just this qualification and no experience?

I'm not particularly interested in working for someone else, but a lot of the info I have read seem to suggest that it is necessary to do so to become a chartered accountant and that there are a lot of other complications when it comes to working under your own name as an accountant.

David Ballantyne

Hi David,

By freelancing, do you mean working in temporary roles through an employment agency or being self employed?

Do you currently have any accounting experience?

What do want to achieve with your accounting career? You may not need a chartered level accounting qualification.

What "complications" do you mean?

Kind regards,

David.

davidfox

Hi David,

By freelancing I mean I'm interested in having and working for my own clients from home at my own leisure rather than through an agency or in rigid office conditions.

I have no accounting experience at all, and from an accounting career I'm looking for control over my time/schedule and something which will pay better than my current call centre job.

By complications I've heard talk of insurance etc. being thrown around when it comes to self employment in this industry.

David Ballantyne

Hi David,

Yes, it is possible to work as a self employed bookkeeper or accountant from home.

I need to state at this point that I have never worked as a self employed bookkeeper or accountant myself.

When you achieve AAT Level 3, you can be an Associate member of the AAT and have the designation AAT Qualified Bookkeeper or AATQB. The AAT will allow you to carry out a limited range of work as an AATQB, click here for info. The AAT will allow you to do this without any experience, i.e. they will issue you with a practising certificate.

You next goal would be to complete Level 4 and achieve full membership of the AAT. This means completing the Level 4 exams and satisfying the experience requirements, click here for info. I believe someone would have to verify your experience. I don't know if AAT would allow clients to sign off your experience. You may need to find an accountant to review your work who would then be prepared to sign of your experience.

When you achieve Full Membership you could then look to provide the additional services allowed for an AAT Accountant. Initially, you would have to provide these services free to clients because the AAT will only issue a practising certificate in these areas after you have gained adequate experience. You would be breaking AAT rules if you practice in areas in which they have not authorised. You would have to keep the AAT informed of the development of your experience.

To be self employed you would need to do the following:
Apply for a practising certificate from the AAT, this incurs a fee.
Pay a fee for the AAT to be your supervising body under the Money Laundering Regulations.
The AAT would require you to have professional indemnity insurance before issuing a practising certificate. It may also be wise to have public liability insurance.
You would have to inform HMRC of your intention to be self employed.
For any tax work you intend to do you would have to register with HMRC as an agent.
You would have to work out how to find clients. It's a competitive business.
You would need to have a continuing program of professional development to stay on top of changes in financial accounting regulations and tax.

Read the AAT Salary Survey here for an idea of potential earnings.

Continue to ask questions on this forum, the Bookkeepers Network forum and the Bookkeepers Alliance (search Google).

Hope that helps.

David.

davidfox

I guess the AATQB route seems most attractive to me as it has the lowest barrier to entry, but subsequently may also prove to be the most competitive, and I guess I wouldn't be too sure where to start finding clients. I suppose Facebook ads to local businesses could work?

I think providing further accounting services, it is almost mandatory to work for someone else, based on what you're saying, which is what has been putting me off a little so far!

CeeJaySix

David,

AAT alone is a far cry from what you need to be able to provide a decent service to clients, other than basic bookkeeping perhaps. You don't need to be chartered, however you do need work experience, whether that be in a self-employed capacity with a 'mentor' to review your work, or in practice for a couple of years before going it alone. The key line in your question is 'with no experience' - with that caveat, the answer is completely implausible I'm afraid. David's post above explains some of the complications with getting started, and that's before you've even considered your ability to provide clients with correct, meaningful advice and end-product.

Vanessa_Essential

I've come across this post whilst look for the money laundering rules set by HMRC, but I just need someone to spell out for me what I need to do!

Having worked in accounts for 30 years and doing small business bookkeeping for the last 3, I decided to go self-employed in March. I was given a VAT and PAYE agent number, and after I had completed three basic self-assessments for clients in their first year of trading, I decided to apply for a SA agent number. I filled in the form and paid for student membership of AAT, thinking this was sufficient for the Laundering rules, but no, HMRC wrote to me saying student membership is not considered as supervised. (I have started AAT level 2 as a refresher course from my old GCSE in Bookkeeping).

So, having seen that I will have to pay around £315 to HMRC for the pleasure, can anyone advise me on a cheaper way round my problem please?

David Ballantyne

Hi Vanessa,

I am assuming that you are qualified by experience and not a member of any bookkeeping or accountancy professional body. If this is the case then your only option would be to register for MLR with HMRC.

I believe that AAT rules require that you do not mention your AAT student membership to clients.

If you decided to stay with AAT, you should be aware that if/when you complete Level 3 studies then you will be obliged to take out Associate Membership with the AAT and become a licensed AAT Qualified Bookkeeper. I believe that the AAT does not allow AATQBs to prepare self assessment returns. See here https://www.aat.org.uk/membership/becoming-a-licensed-member.

You should also be aware that AAT members in practice regulations require that you are registered with the Information Commissioners Office in line with the Data Protection Act. It is also highly advisable that you take out professional indemnity insurance; again AAT MIP regulations require that you do.

Other ways forward:

You could take a look at the Institute of Certified Bookkeepers. They may accept you for full membership based on your experience. I believe they do allow their members to complete self assessment returns. See here http://www.bookkeepers.org.uk/Membership/Become-a-Member/Become-a-Member-by-Exemption .

You could also take a look at the International Association of Bookkeepers. They also may accept you for full membership based on your experience. I believe they also allow their members to complete self assessment returns. See here http://www.iab.org.uk/exemption-routes-to-membership .

ICB and IAB are approved supervisory bodies for MLR purposes. Both bodies are respectable professional bodies, although their qualifications are much less well known in the general employment market than the AAT qualification. If you only intend to be self employed, this may not be a problem.

You may also find it useful to put your query on the Bookkeepers Network forum here http://forum.bookkeepers.network/ .

Hope that helps.

Kind regards,

David.

Vanessa_Essential

Thank you David for your kind and prompt response. I already have the professional indemnity insurance, and will definitely take heed of your advice and check the other bodies out. I shall let you know how I get on

Vanessa_Essential

I've decided to go for HMRC @ £215, and not £315 as this included the Fit and Proper Person application which I don't need as I'm a ASP. The others were similar prices but of course they have recurring annual fees.

Can I make sure as well of payroll? I don't have qualifications in payroll and only use the HMRC PAYE Basic Tools. I'd like to think I am okay as I am especially when they issue agent codes straight away for this.

Thanks again for your very helpful advice!

Vanessa_Essential

My mistake, HMRC do charge a renewal fee but it suits me to do this at this moment in time.

RosieNC

I have just come across this thread, which already answers some of my questions! Thank you David Ballantyne for your useful summary above of what you need to be self-employed.

I've realised I need to register for MLR, because I'm currently working as a self employed bookkeeper. I've "fallen" into this role, moving from more admin type duties that I've been doing for a friend's small business. I had already registered as a sole trader - but hadn't realised about the MLR obligation. I think I need to do this? (I am basically inputting the sales & purchases info into Quickbooks, churning out numbers for the VAT return and passing it on to the accountant to deal with the rest)

I'm currently an AAT student member (completed Level 2, working towards Level 3) - so I expect my next move would be to get AATQB and apply to be an AAT Licenced Bookkeeper (is this just a case of paying the fee, or do I need to prove my abilities etc beyond completing the Level 3 qualification?) Then the MLR would be covered by AAT, but in the meantime i need to register with HMRC for their MLR supervision?

Regarding the HMRC MLR - for the premises register do I need to include the address of my client, as I work at his office? Or just my registered business address (ie my home)? I also am doing a few hours for a bookkeeping company, also on a self-emplyed basis as a subcontractor (so doing work on their clients bookkeeping, but overseen by them) - would I need to include them as well as an additional premises? Presumably they are already covered by their own MLR supervision - would that include me even though I'm subcontractor rather than employee?

What is the fit and proper test? Would I need to do that as well?

It's all adding up to be rather expensive to enable me to work a few hours a week!

Thanks for the help. I feel in some ways daft having to ask these questions, as if I'm going to move towards accountancy I should be able to work it all out for myself!

RosieNC

Ok I've done a bit more research (googling!) and think I have answered my own questions. Could be useful to others coming across this (& please someone correct me if I've got it wrong!)

As a self employed bookkeeper for my client, I need to register for MLR and register my home (business address) as my 1 premises (so pay hmrc £215). Is it simply a case of regustering, or some sort of test / screening involved that means there's a possibility I wouldn't get it?

I won't need to do the Fit and Proper test as a bookkeeper - that's for people who actually handle money and I will just be recording transactions carried out by others?

it would also be a good idea (but not compulsory) to have PII insurance...can anyone recommend where to get this from?

Thanks!