Licenced Member Application

I have been qualified (ie passed exams) for a number of years and I am in the process of applying for licenced member status. I want to provide services such as personal income tax, business income tax and corporation tax, however as all my working experience is in the public sector, I do not have any direct experience. What would I need to do to get accepted?

Thanks

Comments

  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,452
    Hi @New_Practice

    Have a look at the form you need to fill in to apply for a licence. You need a minimum of 6 months experience in each of the services you wish to add to your licence. You may have some transferable skills (e.g. processed payroll in your previous job).
    However I would encourage you to get some practical experience in a practice before you even start thinking of setting up on your own.
  • AAT_TeamAAT_Team Administrator Posts: 523
    @New_Practice you can have a chat with our Licenced team here at AAT and they'll be able to give you some good advice on what is needed etc to be approved for specific services - +44 (0)20 3735 2468 ([email protected])
  • David BallantyneDavid Ballantyne DurhamRegistered Posts: 100
    Hi,

    You have a couple of ways of dealing with this.

    AAT will grant you a licence for the services in which you already have experience. You can charge for the services you are licensed to carry out.

    AAT will allow you to offer services not covered by your licence, but you cannot charge for them. However, once you have gained enough experience in these services there is a form you can complete and send to AAT to self-certify your experience. AAT will then add this service to your licence. What is unclear is how much "enough experience" is.

    I am in the same situation as yourself. I dealt with this as follows. I joined my local branch committee of which the members are all members in practice. When I set up my own practice, I set it up as a limited company. One of the other branch committee members, who has been in practice for twenty years and whose licence covers tax kindly agreed to join my company as a non-shareholding director.

    This means that my company is the legal entity that clients contract with and the company can offer a full range of services. The arrangement I have with my colleague is a mentoring relationship in which he supervises and reviews the tax work that I do. Once I have gained enough experience I will apply to AAT to add these services to my licence.

    Other options:

    You could leave AAT and join Institute of Certified Bookkeepers who don't have experience requirements, although you would be limited to doing sole trader self-assessments.

    You could also enquire with the Institute of Financial Accountants.

    Kind regards,

    David.
    David Ballantyne
    Connect with me on LinkedIn!
    Ballantyne Accountants
  • hal978hal978 LondonMAAT, AAT Licensed Accountant Posts: 171

    Hi,

    You have a couple of ways of dealing with this.

    AAT will grant you a licence for the services in which you already have experience. You can charge for the services you are licensed to carry out.

    AAT will allow you to offer services not covered by your licence, but you cannot charge for them. However, once you have gained enough experience in these services there is a form you can complete and send to AAT to self-certify your experience. AAT will then add this service to your licence. What is unclear is how much "enough experience" is.

    I am in the same situation as yourself. I dealt with this as follows. I joined my local branch committee of which the members are all members in practice. When I set up my own practice, I set it up as a limited company. One of the other branch committee members, who has been in practice for twenty years and whose licence covers tax kindly agreed to join my company as a non-shareholding director.

    This means that my company is the legal entity that clients contract with and the company can offer a full range of services. The arrangement I have with my colleague is a mentoring relationship in which he supervises and reviews the tax work that I do. Once I have gained enough experience I will apply to AAT to add these services to my licence.

    Other options:

    You could leave AAT and join Institute of Certified Bookkeepers who don't have experience requirements, although you would be limited to doing sole trader self-assessments.

    You could also enquire with the Institute of Financial Accountants.

    Kind regards,

    David.

    Hi David,

    Are you sure you can provide non-licensed services free of charge? I couldn't find this anywhere in their policies, and I read everything. Was this something AAT told you?

    As for IFA, I considered this myself but I was told I had to do 7 exams plus they require 3 years experience.
  • David BallantyneDavid Ballantyne DurhamRegistered Posts: 100
    Hi Hal,

    I've had a quick search myself and I cannot find anything documented on the website which confirms my suggestion. However, I have had several conversations with AAT Membership Services about adding services and have been advised that I can offer services without charge and then once I have adequate experience I can add the service by completing the relevant form.

    You can find the form here: https://www.aat.org.uk/sites/default/files/assets/mip_application_add_services_2014.pdf

    I can only suggest that you contact Member Services to confirm that what I have stated is correct.

    Kind regards,

    David.
    David Ballantyne
    Connect with me on LinkedIn!
    Ballantyne Accountants
  • David BallantyneDavid Ballantyne DurhamRegistered Posts: 100
    A further update.

    I spoke to AAT today. In short:

    If you have a licence to provide services but it does not include tax, you cannot offer tax services at all, paid or unpaid. So you can't do unpaid work to get the experience.

    If you do not have a licence, you can do unpaid work to get the experience (yes, you read that right). The example I was given was "if you do it for friends and family"; whether that means you can't do it for people who aren't friends or family I don't know.

    There really needs to be a clear and unambiguous statement from the AAT that clarifies the means by which those of us who are missing experience in services in which we want to practice can satisfy the AAT that we are competent to do so.

    It would be incredibly forward looking of the AAT to introduce additional training and examinations of sufficient detail and rigour to give the AAT confidence that they can grant a practice certificate to those of us without the full set of skills that we want to practice in. If the Institute of Certified Bookkeepers can do it, why can't the AAT?

    David Ballantyne
    Connect with me on LinkedIn!
    Ballantyne Accountants
    hal978
  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,038

    A further update.

    I spoke to AAT today. In short:

    If you have a licence to provide services but it does not include tax, you cannot offer tax services at all, paid or unpaid. So you can't do unpaid work to get the experience.

    If you do not have a licence, you can do unpaid work to get the experience (yes, you read that right). The example I was given was "if you do it for friends and family"; whether that means you can't do it for people who aren't friends or family I don't know.

    There really needs to be a clear and unambiguous statement from the AAT that clarifies the means by which those of us who are missing experience in services in which we want to practice can satisfy the AAT that we are competent to do so.

    It would be incredibly forward looking of the AAT to introduce additional training and examinations of sufficient detail and rigour to give the AAT confidence that they can grant a practice certificate to those of us without the full set of skills that we want to practice in. If the Institute of Certified Bookkeepers can do it, why can't the AAT?

    I agree with the AAT in that an unlicensed AAT member shouldn't be able to engage with a member of the public on an unpaid basis and use that member of the public as a guinea pig for the AAT member to gain some training and experience. What if the AAT member made a mistake and the member of the public was penalized by HMRC 6 years down the line- who would be liable for the fines and penalties and late payment interest and unpaid tax? AAT? This would seriously tarnish the AAT's credibility.

    Regarding ICB, this organization is not really recognized by many 3rd party organizations such as mortgage lenders, Home Office, UKBA, banks, etc. Whereas AAT is beginning to be taken seriously by all the aforementioned organizations and therefore AAT (like the other recognized accountancy bodies such as ACCA, ICAEW, CIMA, IFA, and AIA) needs to be more stringent and strict. AAT shouldn't try to race to the bottom and try to compete with unrecognized organizations. The AAT can only do so much. However I do agree that the AAT should publish a comprehensive list of bullet points detailing how members can add additional services to their licence. For example, I am registered for every tax apart from Inheritance Tax and would like to know how to go about adding this to my licence. However I certainly would not offer this service for free as I am sure I would be incompetent because I don't have the experience and I am sure I would make very costly mistakes on my clients behalf.

    I don't think any of the accounting bodies (e.g. ACCA, ICAEW, CIMA, IFA, and AIA) offer any additional exams or additional training in lieu of experience, and I'm surprised you only need 6 months experience (rather than 3 years experience) to gain a licence in a particular area. In my opinion, experience trumps exams every time (or at least most times).

    For me the only professional ways for an AAT member to gain experience in areas that they do not have experience in would either be to work for a firm of qualified accountants (either unpaid or paid) for around 2 years post-qualification. Any other way of gain experience is likely to be inadequate or unprofessional, e.g. it is unprofessional for an AAT member to offer their services to the public for free just because they are unlicensed in that area. For example, a cardiologist can't pretend to be a brain surgeon just because he is offering his services for free. Ultimately the AAT is trying to protect its members from themselves, and trying to protect innocent members of the public.

    The other route for an AAT member would be to resign from the AAT and work unregulated. However unregulated accountants, as well as having problems certifying documents and gaining clients and AML supervision, may also have problems in the future with HMRC: https://www.accountingweb.co.uk/practice/general-practice/professional-bodies-complain-about-unfair-unregulated-agents
    MarieNoelle
  • David BallantyneDavid Ballantyne DurhamRegistered Posts: 100
    Hi Reader,

    In general I accept your views. My only counter argument is that I bet the vast majority of sole trader, partnership and small limited company accounts and tax returns are relatively routine and straightforward. Otherwise why would so many accountancy firms pay AAT part and fully qualified staff to do this kind of work for less than £25k per year? SJD Accountancy springs to mind.

    Considering that the vast majority of this work is probably straightforward, further detailed study and examination in the practical procedures necessary to do the work, if effectively implemented, would, I'm sure, make up for a lack of experience. Bearing in mind that most people starting a small practice will start gradually with one or two clients, will take it slowly and therefore gradually develop their experience client by client. Tuition and examination in practice management and detailed operation manuals would further mitigate risk arising from lack of experience.

    The fact that none of the professional accountancy bodies offer this kind of training does not mean that it is not a good idea, not possible and not effective.
    David Ballantyne
    Connect with me on LinkedIn!
    Ballantyne Accountants
  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,038

    Hi Reader,

    In general I accept your views. My only counter argument is that I bet the vast majority of sole trader, partnership and small limited company accounts and tax returns are relatively routine and straightforward. Otherwise why would so many accountancy firms pay AAT part and fully qualified staff to do this kind of work for less than £25k per year? SJD Accountancy springs to mind.

    Considering that the vast majority of this work is probably straightforward, further detailed study and examination in the practical procedures necessary to do the work, if effectively implemented, would, I'm sure, make up for a lack of experience. Bearing in mind that most people starting a small practice will start gradually with one or two clients, will take it slowly and therefore gradually develop their experience client by client. Tuition and examination in practice management and detailed operation manuals would further mitigate risk arising from lack of experience.

    The fact that none of the professional accountancy bodies offer this kind of training does not mean that it is not a good idea, not possible and not effective.

    Hi David,

    I believe you are mistaken. The work that SJD does is actually very complex. They have to determine/assess risk with regards to whether or not the client is inside or outside the IR35/intermediary legislation by referring to the client's contract and working practice, let the clients know the extent of the tax that they may or may not be underpaying by, discuss the use of a non-working spouse for shareholding purposes, discuss the use of additional directors for salary purposes, calculate use of home as office rental charges and create non-exclusive rental agreements, deal with enquiries from HMRC into VAT or personal tax returns, make suspicious activity reports (SAR's) where appropriate, dealing with clients who have clients who are overseas and the associated VAT implications, dealing with clients who are non resident/non-domicile, writing references to Home Office, UKBA, mortgage lenders, dealing with liquidators (MVL and CVL where tax cannot be paid), advising of the use of umbrella companies and avoidance of contractor loan schemes, advising on strike offs versus liquidations and any associated last minute planning to avoid costly liquidations, advising on tax changes such as flat rate scheme or off payroll rules or TAAR changes re: entrepreneur's relief, advising on FRS102 vs FRS105, auto-enrolment, use of B shares and amended articles of association, updating clients with regards to recent tax tribunal cases, director's loan account and P11D/accounting implications, use of subcontractors and additional onshore reporting, advising on penalties and penalty appeals, etc. The work SJD does is far from straightforward and in fact this work is very easy to mess up and result in very costly tax issues, especially as their clients generally earn around £150k/year.

    If SJD are using MAAT's to do all of the above then the MAAT should be able to pick up a practising certificate from the AAT very easily as they would clearly be very competent, and have all the practice experience.

    I guess the big worry for AAT is for non-practising MAAT's not being aware of all of the above as they don't work in practice and not knowing what they don't know and therefore thinking that their work is simple and routine when really it isn't. When an AAT member gets a practising certificate they become the principal/senior partner of their own firm, and there isn't anyone to go to. Especially because the AAT is getting rid of many of the Croner resources.

    The fact that none of the accountancy bodies offer the type of training and exams that you mention suggest that it is not an effective idea for training accountants in all of the above that I have mentioned, and that it is highly unlikely to ever come to fruition.
    douglasstroudmskaat
  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,452
    David, I see your point but it will be extremely difficult for the AAT to devise specific training and examination in "practice management". You can do a lot of reading on it but at the end of the day it doesn't replace experience.
    I would welcome however a proper mentoring process or more branch events dedicated to new or aspiring licensed members.


  • David BallantyneDavid Ballantyne DurhamRegistered Posts: 100
    Reader,

    OK in regards to what SJD staff are doing I'll accept that I must be mistaken. I had assumed that it would be relatively straight forward because the branch local to me pay their staff less than I get for pretty straight forward management accounting work.

    I think there are scenarios which are pretty straight forward. Simple sole trader and partnership accounts and tax for example.

    The description of the work that you gave for what SJD staff do is essentially a syllabus description of what needs to be learned. A course could be devised, learned and rigorously examined using real life scenarios.
    David Ballantyne
    Connect with me on LinkedIn!
    Ballantyne Accountants
  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,038
    Hi David,

    The work is only simple if you have experience and know what you are doing with sole traders and partnerships, e.g. deciding on cash vs accruals basis for tax, claiming capital allowances on cars, creating general/special pools, assisting with tax credit applications, the itinerant travel rules, explaining to unincorporated entities the risk they are taking by not incorporating and using limited liability, comparing tax efficiency with limited company structure, claiming incorporation relief if applicable, the effects of using flat rate scheme for on the sole trader business and how this interacts with rental income, etc.

    Don't hold your breathe regarding any of the major accountancy bodies (ICAEW, ACCA, CIMA, IFA, AIA, or AAT) devising a practising certificate training course.
  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,452
    I agree with @reader

    I have yet to come across a "straightforward" set of accounts. Moreover the drive towards making tax digital and access to user friendly software has changed the role of the bookkeeper and accountant. You need to offer more than just preparing a set of accounts based on the client's records.
  • David BallantyneDavid Ballantyne DurhamRegistered Posts: 100
    Hi Reader,

    Again, everything you describe could be put into a course, learned and examined. I agree that none of the professional bodies are likely to do this, but that does beg the question of how relevant their qualifications are to business if they don't cover the practical skills necessary to do the actual work.

    Hi MarieNoelle,

    Regarding straight forward accounts. I do struggle a bit with this. There must surely be a fair bit of relatively straight forward routine work otherwise surely accountancy practices would not employ AAT level 3 staff on fairly low wages to do accounts and tax returns for sole traders, partnerships and small limited companies?
    David Ballantyne
    Connect with me on LinkedIn!
    Ballantyne Accountants
  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,452



    Regarding straight forward accounts. I do struggle a bit with this. There must surely be a fair bit of relatively straight forward routine work otherwise surely accountancy practices would not employ AAT level 3 staff on fairly low wages to do accounts and tax returns for sole traders, partnerships and small limited companies?

    I fail to see your point though. Of course, most practices will have junior staff doing accounts and preparing tax returns, but they will be supervised/reviewed by a senior accountant. The principal of the practice has ultimately the responsibility of ensuring the accounts are correct.
    This is different to having someone with no practice experience preparing and submitting accounts on behalf of the client without the work being reviewed. It is actually quite challenging to put in place proper review procedures when you are on your own, and these procedures are usually learnt from a few years in practice as an employee or subcontractor, or with the help of a mentor.

  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,038

    Hi Reader,

    Again, everything you describe could be put into a course, learned and examined. I agree that none of the professional bodies are likely to do this, but that does beg the question of how relevant their qualifications are to business if they don't cover the practical skills necessary to do the actual work.

    Hi MarieNoelle,

    Regarding straight forward accounts. I do struggle a bit with this. There must surely be a fair bit of relatively straight forward routine work otherwise surely accountancy practices would not employ AAT level 3 staff on fairly low wages to do accounts and tax returns for sole traders, partnerships and small limited companies?

    Hi David,

    A qualified accountancy practice would have a qualified accountant who has a license providing all the necessary business advice, tax planning and HMRC defence. A practice may also have junior staff, e.g. AAT students, who follow the instructions of the senior accountant and just get on with doing the tedious 'donkey work', e.g. data entry. However without the qualified accountant the junior member of staff would not know what to do and whether or not what they are doing is the most tax efficient/commercially viable/compliant strategy. The routine donkey work is worth nothing without the advice from the qualified accountant. In addition, the routine work may even have been prepared incorrectly and require correcting by the qualified accountant.

    Regarding relevancy of qualification, I assume the accountancy bodies assume that the accountants that would want to setup a practice would take the obvious step of actually working in a practice to build up and develop their knowledge and experience. For example, a consultant brain surgeon would have worked in brain surgery as a junior doctor before coming a consultant brain surgeon (rather than coming from an unrelated field of medicine such as cardiology). In addition, it is worth noting that accountancy is a huge subject area and therefore it is impossible for any of the accountancy bodies to cater for absolutely every type of accountant in full and complete depth, e.g. financial reporting accountant, tax adviser, management accountant, FD/CFO, charity/NFP accountant, auditor, financial analyst, bookkeeper, VAT consultants, employment tax adviser, probate/wills, etc. In other words, on the job training in the particular specialism is essential (especially to keep up with changes).

    The more I think about a training course for practising certificate purposes the more unlikely/unrealistic I believe it to be.
  • David BallantyneDavid Ballantyne DurhamRegistered Posts: 100
    edited June 15
    OK I give in.

    From my perspective this essentially means that accountancy and tax is a closed shop and that the professional exams don't actually prepare you for the work place.

    This is particularly irritating when you consider that all of the accountancy bodies happily tell you what a wonderful career you are going to have but neglect to tell you in their marketing that you have do more that just pass the exams to be qualified and start a business.

    The AAT in particular uses the promise of being able to start your own business in marketing its qualification. The AAT should qualify this in its advertisements by stating all of the additional hoops you have to jump through before you can get to the point of starting a business.

    Having had a quick search online there does appear to be a training business in London that offers short work placements to gain experience. Also, although I can't find the evidence online now, there was a CIMA qualified accountant offering training courses in practical tax for CIMA qualifieds who want to start their own practice.

    So to summarise, for someone who has passed AAT exams and wishes to gain experience for full qualification and to start a tax business the following options are or may be available:

    Get employment in an accountancy practice. The AAT definitely approves of this route.

    Set up some form of joint venture with an experienced accountant and gain experience under his/her supervision. I would have thought that the AAT would be OK with this but don't know for certain.

    Try to get an unpaid internship. I would have thought the AAT would approve of this.

    Another possible option may to buy a franchise business where they can provide support and training.
    David Ballantyne
    Connect with me on LinkedIn!
    Ballantyne Accountants
  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,038

    OK I give in.

    From my perspective this essentially means that accountancy and tax is a closed shop and that the professional exams don't actually prepare you for the work place.

    This is particularly irritating when you consider that all of the accountancy bodies happily tell you what a wonderful career you are going to have but neglect to tell you in their marketing that you have do more that just pass the exams to be qualified and start a business.

    The AAT in particular uses the promise of being able to start your own business in marketing its qualification. The AAT should qualify this in its advertisements by stating all of the additional hoops you have to jump through before you can get to the point of starting a business.

    Having had a quick search online there does appear to be a training business in London that offers short work placements to gain experience. Also, although I can't find the evidence online now, there was a CIMA qualified accountant offering training courses in practical tax for CIMA qualifieds who want to start their own practice.

    So to summarise, for someone who has passed AAT exams and wishes to gain experience for full qualification and to start a tax business the following options are or may be available:

    Get employment in an accountancy practice. The AAT definitely approves of this route.

    Set up some form of joint venture with an experienced accountant and gain experience under his/her supervision. I would have thought that the AAT would be OK with this but don't know for certain.

    Try to get an unpaid internship. I would have thought the AAT would approve of this.

    Another possible option may to buy a franchise business where they can provide support and training.

    I think all the professional associations (be it medicine, engineering, surveying, teaching, etc) require their members to pass exams AND gain real life practical experience. Consequently I don't think it is unreasonable for any accountancy body to require its qualified and licensed members to jump through the same hoops. It is what any reasonable member of the public would expect from a qualified accountant, i.e. have real world experience.

    I think your comment about accountancy being a closed shop is a bit dramatic. The major accountancy bodies are pumping out hundreds or even thousands of qualified accountants every year. It is probably one of the most accessible professions in the UK in that anyone can begin studying AAT/ACCA today in their spare time and start applying for jobs in practice. I don't think the same can be said for many of the other professions.

    Your first 3 options sound OK. However I believe some franchises may want you to have an AAT licence beforehand.
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