Updated 03 December 2020
A chartered accountant can offer specialist accountancy services and business advice in a range of important areas. The key difference between an accountant and a chartered accountant is that the latter is typically more highly qualified and experienced, and will be a member of a professional body. If you’re seeking straightforward accounting services, you may not need to pay the extra cost of hiring a chartered accountant – but if your needs are more complex or specialised, they may be well worth the higher fee.
A chartered accountant is an accountant with the specific professionally accreditation of ‘chartered status’. They have studied accounting to a high level and have gained professional experience in the industry. In addition, chartered accountants are members of a respected professional body, such as CIMA (Chartered Institute of Management Accountants) and are required to stick to a strict ethical and professional code of conduct.
With regard to the ICAEW (Institute of Chartered Accountants in England and Wales), 30% of its chartered accountants work within an accountancy firm. The rest either operate as a sole trader, within a multinational accountancy firm or oversee the finances in another businesses. You’ll often find them in a position like CFO (Chief Financial Officer), where they are responsible for making the most important financial decisions.
In addition to regular accounting services, chartered accountants can provide advice on specific business and financial matters. These include:
Due to their in-depth expertise, many chartered accountants can advise on things that regular accountants can’t. They often have specialised experience in a certain field, such as working with High Net Worth Individuals with more complicated personal finances or estates or testifying as accountancy experts in criminal cases.
The title of accountant isn’t a protected term, meaning you don’t have to obtain specific qualifications in order to use it. An accountant may have studied accountancy at foundation level through AAT (Association of Accounting Technicians) or have gained their knowledge through years of professional experience. They will also still need to adhere to the Financial Reporting Council’s (FRC) Corporate Governance and Stewardship Codes. Here you can find out more about what an accountant does.
However, to use the title chartered accountant, an accountant must pass a series of exams and complete three to five years of work experience to gain professional accreditation. Once qualified, a chartered accountant can become a member of either the ICAEW or ACCA (Association of Chartered Certified Accountants).
A chartered accountant who is part of a reputable professional body like ICAEW will also be required to hold professional indemnity insurance. This protects both you and the chartered accountant if unintentional errors occur. Chartered accountants are also be bound by their chosen professional body’s own ethical codes and can have their membership terminated if they do not stick to the guidelines.
General accountants can offer sound advice on everyday matters such as annual tax returns and invoicing. Enlisting the pricier services of a chartered accountant isn’t necessary if you’ve got a question about VAT, for example. However, it’s best to speak to a chartered accountant if you’re in a more complex financial situation and need specialist advice.
For example, if you run a business and you’re looking to acquire a smaller company, a chartered accountant will help you make a detailed financial plan ahead of the acquisition. They will guide you through the whole process, including how to secure any necessary funding and offer advice on proceeding in a tax efficient way.
Depending on their previous experience, chartered accountants can have in-depth knowledge of a wide range of financial matters, from tax planning to cash flow forecasting. Though all are trained to a high standard, finding a chartered accountant that specialises in a particular field will help you get the best result.
The fee charged by a chartered accountant will be determined by a number of factors, including:
Regardless of your requirements, chartered accountants are more expensive than accountants. While an accountant will usually charge between £25 to £35 per hour for basic accounting services, specialist tax planning or business planning advice from a chartered accountant could cost up to £150 per hour. You can find a more detailed breakdown of how much accountants generally charge in our previous article.
It can be tricky to find an experienced, knowledgeable accountant or chartered accountant without a personal recommendation. Unbiased’s matching tool can help you find the right professional for you, whether you’re looking for personal advice or help managing your business’ affairs. You can find a local accountant to consult for some one-off advice or enlist help on a more regular basis.
There are a number of questions you need to ask any chartered accountant during your first meeting. Here are some suggestions to get you started:
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