Once you've been awarded an AAT licence you'll need to comply with the conditions set out in AAT’s Licensing Regulations (PDF). This includes meeting the following requirements on a continuing basis, in addition to all other standards and requirements for AAT members.
If you fail to renew or pay your fees by your renewal date, your licence will expire and you will no longer be permitted to provide services to clients. We’ll contact you when your renewal is due and explain the steps you need to follow.
As an AAT licensed member, you must follow our CPD policy and record your CPD activities in practice management, anti-money laundering and all your approved services. You may be asked to submit your CPD record if you're selected for CPD monitoring or a practice assurance review, or if we receive a complaint.
AAT affiliates and professional members can find out about planning, reviewing, carrying out and recording CPD in their MyAAT account.
All AAT licensed members must work in accordance with our Practice Assurance Standards (PDF), including:
- compliance with laws and regulations
- client acceptance and disengagement
- quality control.
Complying with these standards will protect your clients as far as possible from potential harm caused during the provision of your services.
Ethical behaviour is key to maintaining public confidence in the accountancy profession, and all AAT members are bound by AAT’s Code of Professional Ethics (PDF). It’s based on five key principles:
- professional competence and due care
- professional behaviour.
All AAT licensed members are subject to a practice assurance review to ensure they comply with these and other key regulations.
All AAT licensed members must be monitored by a supervisory authority such as AAT. There’s lots of useful anti-money laundering (AML) guidance in AAT Knowledge Hub for AAT affiliates and professional members, and you can contact us if you have any questions regarding your supervision or wish to discuss the AML controls you need in place.
Key features of our Client Care policy (PDF) include:
- undertaking appropriate steps to check whether you should accept a new client
- providing letters of engagement (and disengagement) to all clients – our sample documents and checklists can help you with this, once you’re approved
- having a complaints policy and procedure in place to try and resolve complaints internally
- holding adequate Professional Indemnity Insurance (PII) at all times
- informing clients of relevant PII details as required under the Provision of Services Regulations 2009.
Key requirements under our Clients’ Money policy (PDF) include:
- only using a client account or receiving or making payments that relate to accountancy and/or bookkeeping services the firm is performing, has performed or has been engaged to perform for the client
- taking steps to obtain and hold sufficient information to ensure that the client bank account is being used for a lawful and legitimate purpose and for authenticated transactions
- holding clients’ money in a client bank account, and notifying the bank that the money within is held as clients’ money and should be described in banking records as such
- having acknowledgement from the bank that they accept this is the case
- ensuring clients’ money is never put into the firm’s business account under any circumstances
- opening an individual designated client account for any client where there is an expectation that more than £10,000 will be held for more than 30 days
- complying with the requirements on paying interest as set out in the policy
- only withdrawing from the account in the specified circumstances
- keeping clients’ money records, and reconciling total balances at least once every five weeks.
AAT licensed members need to pay a data protection fee to the Information Commissioner’s Office (ICO) under AAT’s Licensing Regulations. If you haven't paid your fee you must do so immediately.
You will not be exempt from paying the fee if you're providing accountancy or bookkeeping services to clients, because this will involve you having responsibility for deciding how information is processed, rather than your client. For example, processing data as part of your professional obligations under the Money Laundering Regulations. Please visit the AAT Knowledge Hub to find out more.
Paying the data protection fee is simple and takes around 15 minutes. The cost of your data protection fee will depend on your size and turnover but for most businesses will cost £40. The ICO will contact you directly at least six weeks before your fee is due to expire. Please ensure you pay your renewal fee.
Visit the ICO website for the current data protection requirements, and guidance to help you understand the legal framework and what you need to do to comply in practice. You can contact them with any questions.
Professional Indemnity Insurance (PII) is a mandatory requirement for all AAT licensed members. This is for your own protection and for the protection of your clients, as outlined in the Client Care policy (PDF). Key features include:
- ensuring PII cover is in place at all times
- ensuring the PII policy covers all the self-employed accounting services being provided
- ensuring the PII policy is on "any one claim", fully retroactive and including full civil liability cover
- maintaining a minimum level of cover that is adequate in accordance with the amounts specified in the policy
- ensuring the self-insured excess is set at an amount that the licence holder is able to meet at all times
- if carrying out limited assurance engagements, ensuring that the PII covers limited assurance engagements and potential third-party claims
- informing clients of relevant PII details as required under the Provision of Services Act
- maintaining an adequate period of run-off cover after ceasing to practice.
Although we specify minimum cover requirements in the policy, you are strongly advised to do a risk assessment to determine a level of PII which is adequate for your practice. This should take into account the type of clients you have and the type of work you undertake.
If you stop working as an AAT licensed member it is strongly recommended that you maintain your PII for a minimum period of six years after you have ceased your business. This is because PII policies are usually provided on a claims-made basis. You may not be covered where a claim is made against you after your PII has expired, for work carried out before your PII lapsed.
AAT members are eligible for exclusive rates on PII if arranged through AAT’s partner provider.* Read more about these rates and get a quote.
*AAT is an introducer appointed representative of Parliament Hill who are authorised and regulated by the Financial Conduct Authority for non-investment insurance mediation only under registration number 308448. You can check this out at http://register.fca.org.uk. AAT is not in the same group as the provider.
Key requirements under our Continuity of Practice policy (PDF) include:
- providing AAT with the name and contact details of another practising accountant or firm of accountants located in the UK or Channel Islands to provide continuity cover for their practice in the event of their long-term absence
- ensuring that this accountant or firm has similar procedures and compatible practices, and that the services provided are of a comparable nature
- ensuring that the arrangement is agreed in writing and signed by both parties
- making clients aware of the data sharing requirements within the continuity of practice arrangement.
It is not mandatory for licence holders with six or fewer clients to have continuity cover, provided that:
- clients are made aware of and agree to this
- the matter is documented within the letter of engagement.
Licence holders must inform AAT promptly of any changes to their continuity of practice arrangements.