AAT licences and services

We offer two types of licence: AAT Licensed Bookkeeper and AAT Licensed Accountant.

As an AAT Licensed Bookkeeper, you can apply to provide up to five services, which are within Tier 4. You can apply to become an AAT Licensed Bookkeeper if you are an:

  • AAT bookkeeping member (AATQB)
  • AAT full member (MAAT)
  • AAT fellow member (FMAAT).

As an AAT Licensed Accountant, you can apply to provide any of the services in all tiers. There are 18 services available.

You can apply to be an AAT Licensed Accountant if you are an:

  • AAT full member (MAAT)
  • AAT fellow member (FMAAT).

Some eligibility and exemption criteria apply. Find out whether you're eligible for a licence or exempt from needing one.

Services available under each licence

ServiceAAT Licensed BookkeeperAAT Licensed Accountant
Bookkeeping
Financial accounts and accounts preparation for sole traders and partnerships
VAT
Computerised accountancy systems
Payroll
Financial accounts and accounts preparation for statutory purposes 
Budgeting and forecasting 
Management accounting 
Personal income tax 
Business income tax 
Inheritance tax 
Capital gains tax 
Corporation tax 
Limited assurance engagement 
Independent examination 
Company secretarial services 
Internal audit 
Forensic accounting 

You can only provide the specific services to clients that are covered by your individual licence. Approval of services is on an individual basis and subject to demonstration of competence as outlined in the Licensing policy.

Details of each service

Tier 4: AAT Licensed Accountants and Bookkeepers

Services included in this tier are:

  • Bookkeeping
  • Financial accounting and accounts preparation for sole traders and partnerships
  • VAT
  • Computerised accountancy systems
  • Payroll.

Tier 4 service details

Bookkeeping

The recording of actual transactions in monetary terms to trial balance only, without any adjustments. It specifically excludes the calculation of actual transactions, for example the calculations of depreciation, accruals/prepayments and work-in-progress. 

Financial accounting and accounts preparation for sole traders and partnerships 

The preparation of financial accounts for sole traders and partnerships but specifically excludes any accounts required for statutory purposes under the prevailing Companies Acts (see Tier 3).

VAT

The preparation of VAT returns; dealing with HMRC on behalf of a client, advising on the applicable rates of VAT in respect of both inputs and outputs.

A member practising in this area of work can be expected to provide their client with:

  • an explanation of the principles of VAT
  • calculations of the VAT to be paid to, or recoverable from, HMRC 
  • computerised accountancy systems.

The demonstration, installation or provision of training to clients on accountancy and accountancy related systems. 

Computerised accountancy systems

The demonstration, installation or provision of training to clients on accountancy and accountancy related systems.

Payroll

The calculation of the net pay due to a client’s employees after taking into account all deductions and reimbursement of expenses. 

This includes the preparation of returns to enable the submission (to HMRC) of all required RTI forms, after approval by a client.  Advising the client of their liability, if any, to pay PAYE and National Insurance to HMRC. 

Tier 3: AAT Licensed Accountants

Services included in this tier are:

  • Financial accounting and accounts preparation for statutory purposes
  • Budgeting and forecasting
  • Management accounting.

Tier 3 service details

Financial accounting and accounts preparation for statutory purposes

The preparation of the full and abbreviated statutory accounts that are compliant with prevailing legislation, including the Companies Act, and relevant Accounting Standards. 

Budgeting and forecasting

The preparation of financial reports before the accounting period(s) typically showing planned income, expenditure, and capital employed or cash flow.

Forecasting is the prediction of relevant future factors affecting a business and its environment and may be used as the basis for preparing budgets, for example a sales forecast or cash flow forecast.

Management accounting

The preparation of summarised accounting data reports for the owner or management team of a business, on a frequent basis (for example quarterly, monthly or weekly).

Some examples of management accounting reports are:

  • monthly/quarterly profit and loss statement
  • monthly sales analysed by product or division
  • standard costing reports.

Tier 2: AAT Licensed Accountants

Services included in this tier are:

  • Personal Income Tax
  • Business Income Tax
  • Inheritance Tax
  • Capital Gains Tax
  • Corporation Tax.

Tier 2 service details

Personal Income Tax

The calculation of an individual’s Income Tax liability taking into account their total taxable income received in a tax year including:

  • tax adjusted profits from an unincorporated business(s)
  • PAYE
  • savings and investments

and applying all prevailing legislation to complete all relevant HMRC returns.

Business Income Tax

The calculation of the profits/losses for tax purposes of an unincorporated business and applying all prevailing legislation to complete all relevant HMRC returns.

A member practising in this area of work can be expected to provide their client with:

  • an explanation of the principles of Business Income Tax
  • calculations of the trading profits (losses) of a business  as adjusted for tax purposes.
  • advice on Business Tax planning
  • advice on VAT planning.

Inheritance Tax

Inheritance Tax is the tax payable either on the advent of a person’s death, or at the time of making a chargeable lifetime transfer.

This service area includes the completion of all relevant HMRC returns.

A member practising in this area of work can expect to provide their client with:

  • an explanation of the principles of Inheritance Tax
  • calculations of the Inheritance Tax due
  • advice on Inheritance Tax planning.

Capital Gains Tax

Capital Gains Tax is concerned with quantifying the gain chargeable to tax, or loss for relief against other gains, arising from the disposal of a capital asset(s) in respect of personal, or business, assets made by a taxpayer a corporate entity.

This licence service includes the completion of all relevant HMRC returns.

A member practising in this area of work can be expected to provide their clients with:

  • an explanation of the principles of Capital Gains Tax
  • calculations of the Capital Gains Tax due
  • advice on Capital Gains Tax planning.

Corporation Tax

Corporation Tax is the tax liability arising on the taxable profits of an incorporated business, charity, club, co-operative or other unincorporated association, e.g. a community group or sports club under prevailing legislation.

This classification includes the completion of all relevant HMRC returns.

A member practising in this area of work can be expected to provide their clients with:

  • an explanation of the principles of Corporation Tax
  • the calculations of the Corporation Tax due
  • advice on Corporation Tax planning.

Tier 1: AAT Licensed Accountants

Services included in this tier are:

  • Limited assurance engagement
  • Independent examination
  • Company Secretarial Services
  • Internal audit
  • Forensic accounting.

Tier 1 service details

Limited assurance engagement

Expressing a conclusion designed to enhance the degree of confidence of intended users (other than the client) about the outcome of the evaluation or measurement of a subject matter against criteria.

Assurance engagements may be assurance based - where the evaluation or measurement of the subject matter is performed by the member or client, and the subject matter information is in the form of an assertion by the member that is made available to intended users.

Assurance engagements may be direct reporting based- where the member either directly performs the evaluation or measurement of the subject matter, or obtains a representation from the client or other preparer that has performed the evaluation or measurement that is not available to the intended users. The subject matter information is provided to intended users in the assurance report.

It is a mandatory requirement that licensed members undertaking a Limited Assurance Engagement use the following wording in the accountant’s report "... nothing has come to our attention to refute the principals’ confirmation that the financial statements give a true and fair view ...".

The member is allowed to add additional caveats as they deem necessary to further reduce the level of risk, for example by specifying which third parties can rely on the financial statements.

The licence service Limited Assurance Engagement specifically excludes Independent Examinations as this is a separate service area (even though an Independent Examination may be perceived to be a form of assurance engagement).

Independent Examination

A review of the accounting records kept by a charity and a comparison with the accounts presented, seeking out unusual items or disclosures identified, in accordance with the requirements set out in paragraph 145 of the Charities Act 2011, and conducted in compliance with the Independent Examination of Charity Accounts: Examiners’ Guide from time to time in force. 

Company Secretarial Services (trust or company services)

Under the Money Laundering Regulations a trust or company service provider is any company or sole practitioner whose business includes:

  • forming companies or other legal persons
  • arranging for another person to act as:
    • director or secretary of a company
    • partner (or in a similar position) for other legal persons
    • trustee of an express trust or similar legal arrangement
    • nominee shareholder for a person other than a company whose securities are listed on a regulated market which is subject to acceptable disclosure requirements
  • providing a registered office, business address, correspondence or administrative address or other relates services for a company, partnership or any other legal person or arrangement
  • acting, or arranging for another person to act, as:
    • a trustee of an express trust or similar legal arrangement, or
    • a nominee shareholder for a person other than a company whose securities are listed on a regulated market.

Internal audit

An organisation (business, charity, public sector organisation, etc) may want to carry out an internal audit to assess the effectiveness of management, financial controls and governance processes with a view to improvement. The person(s) who undertakes the internal audit may be:

  • an employee of the organisation (larger organisations may have an Internal Audit department)
  • a suitably qualified external accountant engaged on a consultancy basis.

The results and report from the internal audit are generally used internally by management within the organisation, unlike a statutory audit where the audit report and accompanying financial statements are intended for external users (shareholders, investors, etc).

AAT Licensed Accountants must use the whole phrase "Internal Audit" and must not drop the word "internal" in order to suggest that they are qualified to undertake "audits", as this can be construed as misrepresentation.

Forensic accounting

Forensic accounting is the area of accountancy that results from actual or anticipated disputes, litigation or legal proceedings where the forensic accountant is engaged to:

  • investigate, examine or analyse financial information and relevant non-financial information and inform the client of their findings
  • where required, give expert evidence in legal proceedings.

The services of a forensic accountant may be required in, for examples, personal injury claims, matrimonial disputes, criminal cases, commercial dispute, insurance claims, professional negligence claims and so on.

As an AAT Licensed Accountant offering forensic accounting as a service you should ensure that:

  • you make your Professional Indemnity Insurance (PII) provider aware that you are offering this service
  • your PII policy covers your work in this area.

Licence conditions

Licence conditions

All AAT licensed members are required to comply with the conditions set out in AAT’s licensing framework. This includes:

  • maintaining adequate PII
  • maintaining continuity cover
  • compliance with all data protection legislation in force
  • compliance with the CPD policy
  • compliance with money-laundering legislation
  • completing an annual renewal.

Licensed members must only undertake work that they're approved to offer. If you provide any services outside the scope of your licence, AAT may terminate your licence with immediate effect.

See all the licence conditions you'll need to comply with

Regulation on additional services

Audit

AAT licensed members are not permitted to carry out statutory audits. You are able to prepare the accounts, but in order to carry out the audit of limited companies under the Companies Act, or the audit of charities under the Charities Act, you must be registered as an auditor with one of the following five recognised professional bodies (RPBs):

  • the Association of Chartered Certified Accountants (ACCA)
  • the Institute of Chartered Accountants in England and Wales (ICAEW)
  • the Institute of Chartered Accountants of Scotland (ICAS)
  • the Institute of Chartered Accountants in Ireland (ICAI)
  • the Association of International Accountants (AIA).

Whether an audit is required depends on the company or charity’s turnover or gross income. Charities can either be audited or undertake a form of audit called an independent examination. Most limited companies that qualify as a small company in a financial year may be exempt from an audit of accounts for that year, but there are some exceptions to this. Independent financial advisors (those with permission to hold client assets),solicitors and chartered surveyors may still require an audit. You can not call yourself an auditor unless you are a registered auditor with one of the bodies above.

Pensions or investment advice

To give pensions or investment advice where you are not an appointed representative of a firm authorised to offer investment advice under the prevailing Financial Services Act(s), you will need to seek authorisation from the Personal Investment Authority (PIA) or one of the RPBs listed above.

If you act as an appointed representative, you should advise your clients that you are doing this and you must keep to our Code of Professional Ethics (PDF).

Insolvency services

To provide insolvency services, as covered by the prevailing Insolvency Act(s) and any other relevant legislation, you must be a licensed insolvency practitioner. Visit the Insolvency Practitioners Association website for further information.

Air Travel Organisers’ Licence (ATOL) reporting

If you have one or more clients that hold an Air Travel Organisers’ Licence (ATOL) and you wish to submit ATOL Reports on behalf of those clients to the Civil Aviation Authority (CAA) you will need to become an ATOL Reporting Accountant (ARA). You must meet the criteria below.

  • You must be an AAT member and an AAT Licensed Accountant who lives and works in the UK.
  • You must have successfully completed the CAA training module on the CAA website.
  • You must have successfully completed AAT’s external auditing exam, or an equivalent exam, in the last ten years. An equivalent exam is an external auditing exam with another professional accountancy body that is recognised by the CAA, and where the exam would be acceptable to that professional accountancy body for the purpose of its own ARA scheme. There is a list of CAA-approved professional accountancy bodies on the CAA website.
  • You must have Professional Indemnity Insurance that complies with the CAA’s requirements.
  • You must be independent from the ATOL holder, and therefore cannot act for a client where they are effectively your employer, or was your employer in the two years prior to engaging you as their ARA.