Schedules to the member in practice regulations

Schedule 1

Services

1. The services referred to in the regulations are listed below:

Accountancy

Bookkeeping (BK)
Financial Accounting and Accounts Preparation (FA and AP)
Budgeting and Forecasting (B and F)
Management Accounting (MA)
Payroll (P)
Independent Examination (IE)
Limited Assurance Engagement (LAE)
Forensic Accounting (FoA)

Taxation

Value Added Tax (VAT)
Personal Tax (PT)
Business Tax (BT)
Corporation Tax (CT)
Capital Gains Tax (CGT)
Inheritance Tax (IHT)

Consultancy

Business Plans (BP)
Computerised Accountancy Systems (CAS)
Company Secretarial Services (CSS)

Explanations of the above services can be found in the guidance to regulation 1.

2. A licensed member or a member registered on the scheme must only provide services in other areas of work if the member:

1. only undertakes the additional services within their competence
2. complies with any relevant statutes
3. does not advertise the additional services in a manner likely to imply that they are licensed or registered to provide that service by AAT.

The additional services will not be regulated or monitored by AAT and will not be endorsed on the member’s practising licence or confirmation of registration letter.

Download schedule 1 (PDF).

Schedule 2

Professional Indemnity Insurance (PII)

1. The member must be able to meet all claims.

2. In this schedule 'the firm' means:

1. the member themselves (if a sole trader)
2. a partnership (including LLP) to which the member belongs or a limited company through which the member is trading.

3.    In this schedule gross fee income is based on the accounting year immediately preceding the start of the policy.

4.    To satisfy these regulations the firm must be covered, whether as policyholder or otherwise, by a policy of insurance providing full civil liability cover for claims arising from the provision of services. The policy must be ‘any one claim’, include unlimited legal defence costs and be fully retroactive.The minimum level of cover a firm must have must be the greatest of:

1. For sole traders:
   1. 2.5 times the firm’s gross fee income
   2. £50,000.
2. For partnerships:
   1. 2.5 times the firm’s gross fee income
   2. £100,000.
3. For limited companies:
   1. 2.5 times the firm’s gross fee income
   2. £100,000.
4. If the gross fee income of the firm is greater than £400,000, the maximum level of PII cover required by these regulations is £1,000,000. However, firms should always consider whether this is sufficient for their situation.

5.    Any self-insured excess must not exceed, in annual aggregate:

1. in the case of a sole trader, £10,000
2. in the case of a partnership, £10,000 per partner
3. in the case of a limited company, £10,000 per director.

6.    Members registered or licensed to carry out Limited Assurance Engagements must ensure that their PII covers Limited Assurance Engagements and potential third party claims.

Download schedule 2 (PDF).

Schedule 3

Gross Fee Income (GFI)

1.    For the purpose of the scheme, annual gross fee income is the following:

1. the income which comes from providing accountancy, taxation, or related consultancy services (as detailed in schedule 1) as a sole trader, with a partner (including as a partner in a limited liability partnership), as a director of a limited company or principal of a corporate entity
2. does not include income which comes from services you provide that are not covered by the scheme for members in practice
3. does not include income that is gained from undertaking work on a subcontract basis for which you are indemnified by the person you are subcontracting to
4. is calculated on an accruals basis and excludes VAT
5. excludes the recovery of disbursements and expenses which do not form part of the chargeable fee for the services rendered and value added tax.

2. Partnerships (including limited liability partnerships)

If you are a partner in a partnership, your gross fee income is the amount of gross partnership income generated by you from providing accountancy, taxation, or related consultancy services (as detailed in schedule 1).

3. Limited companies

If you offer your services as a director of a limited company, your gross fee income is the amount of company income generated by you from providing accountancy, taxation, or related consultancy services (as detailed in schedule 1).

4. Other corporate entities

If you offer your services as a principal of a corporate entity your gross fee income is the amount of company income generated by you from providing accountancy, taxation, or related consultancy services (as detailed in schedule 1 to the regulations).

5. New businesses

If you have been in practice for less than 12 months you will need to complete the application form using estimates for your annual gross fee income and pay the introductory fee based on that estimate. For further details of the member in practice introductory fee visit aat.org.uk/fees

6. Changes to your income

You may experience significant changes in the level of your gross fee income each year. In such cases we will accept a 12 months average of your preceding 24 month gross fees, for the purpose of deciding whether you need to pay the full or reduced member in practice fees.

Download schedule 3 (PDF).