What’s the difference between an accountant and a chartered accountant?

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.

What is a chartered accountant?

A chartered accountant is an accountant with the specific professional accreditation of ‘chartered status.’

Chartered accountants study accounting to a high level and have gained professional experience in the industry.

In addition, chartered accountants are members of the Institute of Chartered Accountants in England and Wales (ICAEW) or the Association of Chartered Certified Accountants (ACCA) and are required to stick to a strict ethical and professional code of conduct.

With the ICAEW, 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 other businesses.

You’ll often find them in a position such as chief financial officer (CFO), where they are responsible for making the most important financial decisions.

What does a chartered accountant do?

In addition to regular accounting services, chartered accountants can provide advice on specific business and financial matters.

These include:

• Corporate finance, e.g. securing finance for mergers, acquisitions and capital restructuring.

• Financial management within a business, such as in-depth cash flow forecasting or managing funds.

• Personal financial advice (for both individuals and companies).

• Forensic accounting to support litigation into commercial fraud.

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.

What is the difference between an accountant and a chartered accountant?

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.

A chartered accountant who is working in practice (providing accountancy services to the public) 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.

The title of accountant isn’t a protected term, meaning you don’t have to obtain specific qualifications to use it. Anybody can call themselves an accountant, so it’s vital to check qualifications and expertise before engaging somebody.

An accountant may have studied accountancy at foundation level through the Association of Accounting Technicians (AAT) or have gained their knowledge through years of professional experience.

There are also other highly regarded routes to becoming a qualified accountant, including the Chartered Institute of Management Accountants (CIMA).

Accountants that work for listed companies 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.

Accountant vs Chartered Accountant: which is best for a UK small business?

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.

A chartered accountant 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 who specialises in a particular field will help you get the best result.

Sole traders, freelancers, and very simple micro-entities with low turnover usually only need a basic accountant or digital bookkeeper to log expenses and file standard Self Assessments.

When might I need to switch to a chartered accountant?

Even if you don’t need a chartered accountant for day-to-day business, there are trigger points when you might need one.

These may include switching from sole trader to a Limited Company, setting up tax-efficient Director salary/dividend splits, or navigating cross-border VAT.

How much does a chartered accountant cost in the UK?

Chartered accountants in the UK typically charge £150 to £300+ per month for full-service Limited Company management.

The fee charged by a chartered accountant will be determined by a number of factors, including:

• Your company’s annual turnover.

• How many employees you have.

• How regularly you need to use their services.

• How complex the matter is.

Regardless of your requirements, chartered accountants are more expensive than accountants.

Basic digital bookkeeping and VAT filings typically cost £60 to £120 per month, while full-service Limited Company management (payroll, corporation tax, annual accounts) by a Chartered Accountant generally ranges from £150 to £300+ per month.

You can find a more detailed breakdown of how much accountants generally charge in our previous article.

Where can I find a good accountant?

It can be tricky to find an experienced and knowledgeable accountant or chartered accountant without a personal recommendation.

Unbiased’s matching tool can help connect you to the right professional for your needs, whether you’re looking for personal advice or help managing your company’s finances.

Alternatively, you can use the Unbiased directory to find a local accountant near you.

How can I choose which type of accountant is right for me?

The table below can help you to choose whether you need a chartered accountant or a cheaper bookkeeper or general accountant.

What questions should I ask my chartered accountant during a consultation?

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:

What is your fee structure?

It’s important to establish upfront how much your chosen chartered accountant charges before going ahead with any further discussions; otherwise, you’re wasting both parties’ time if they’re out of your budget.

What are your professional qualifications?

All chartered accountants should hold a practising certificate from the ICAEW. If they’re not able to show you proof of this, they may not be a legitimate chartered accountant.

Do you have experience in my sector?

Finding out if they have worked in your sector, or carried out related work in a similar area, can tell you if a chartered accountant has the knowledge to help you.

Can I see examples of your previous work?

This is a particularly important question if you have a niche issue you need help with.

Understanding more about how your chartered accountant has helped other clients with financial restructuring, for example, will help you decide if they are suitable for you.

Do you like to take a proactive role?

You may be searching for someone who can actively suggest ways to handle your finances, or you might prefer a chartered accountant who sits back until you call on them. Getting a better sense of their attitude towards client relationships is a good idea.

How can you help me handle Making Tax Digital?

The government is transforming how small businesses and sole traders report to the taxman under Making Tax Digital.

Not all limited companies and smaller sole traders are caught by this yet, but it is best to be prepared even if you are not.

Ask a prospective accountant which MTD-compliant software they support, and will they set it up, whether they will manage your quarterly submissions, how they will help with the transition if you currently use spreadsheets or paper and whether MTD compliance is included in the monthly fee.

Get expert accounting advice

While a general accountant can provide valuable support with everyday tasks such as bookkeeping, tax returns and VAT, a chartered accountant brings a higher level of expertise, accreditation and specialist knowledge.

A chartered accountant's professional training, experience and adherence to strict ethical standards mean they can guide you through more complex financial challenges, from corporate acquisitions to detailed tax planning.

Whether you’re running a business or managing personal wealth, working with a qualified accountant ensures you receive reliable advice and peace of mind that your finances are in safe hands.

Did you find this article helpful? Then you might also find our article on the differences between financial advisers and accountants or reasons to switch your accountant informative, too!