How to Change Accountants in Australia (Without the Hassle)

The switch itself takes about an hour. What keeps it on the to-do list for a year or more is the version people picture: an awkward phone call, records held hostage, and something going wrong at the ATO halfway through.

Changing accountants in Australia is duller than that. Your old accountant does not get a vote, there is no date you have to wait for, and the paperwork moves between the two firms rather than through you.

There is one real trap. If you are a company, trust or partnership, you nominate your new agent through the ATO and they have 28 days to accept before the nomination expires. Let it lapse and you start again, which is how a routine switch turns into a late lodgement.

What follows is the order things actually happen in, who has to do the ATO nomination, and exactly what your old accountant can hold on to.

How changing accountants in Australia actually works

Three things have to move before you have a new accountant:

• The engagement with the new firm, which you control. You pick them, agree a fee and sign an engagement letter.
• The ATO authorisation, which you handle only if you are a company, trust, partnership or another ABN holder that is not a sole trader.
• The records and the ethical clearance letter, which move between the two firms without you.

Two permissions people assume they need do not exist. You do not need your old accountant’s consent, and you do not need to wait for the end of the financial year.

Most people making this move are doing it over fees. If that is you, it is worth knowing what a business tax return actually costs before you start shopping, because the gap between a suburban firm and a fixed-fee online practice on identical work is usually several hundred dollars a year.

The six steps, in the order they happen

1. Line up the new agent firstConfirm they are a registered tax agent on the TPB public register before you commit to anything. Registration is public and takes a minute to check.
2. Agree the fee and sign the engagement letterThis is where you find out what is included and what triggers an extra charge. It is also the last point at which walking away costs you nothing.
3. Nominate them with the ATOCompanies, trusts and partnerships only. Sole traders and individuals skip this step entirely.
4. Your new agent sends the ethical clearance letterAccountant to accountant. You are not copied in and you do not write it.
5. Records transfer between the two firmsPrior returns, financial statements, depreciation schedules and software access.
6. Tell your old accountant and settle the invoiceA short written note is enough. If money is owing, pay it, because an unpaid bill is the one thing that reliably stalls a handover.

Notice where telling your old accountant sits. It is step six, not step one. Most guides put that conversation at the top, which is what makes the whole thing feel like a confrontation you have to win before anything else can happen. You do not have to have it until the new arrangement is already in place, and by then it is administrative.

Worth asking any firm you are considering: which of these six do you handle, and which are mine? A firm with a defined onboarding process answers that without hesitating, which is why how it works tends to be the most informative page on an accountant’s site.

The ATO agent nomination, and who has to do it

Start with the exemption, because it covers most people reading this. Individuals and sole traders are exempt from client-to-agent linking. If you trade under your own ABN as a sole trader, you do nothing at all. Your new agent adds you to their client list and that is the end of it.

Everyone else with an ABN nominates. Companies, trusts, partnerships and other entities have to authorise the new agent through the Agent nomination feature in ATO Online services for business before that agent can act for them. The ATO brought this in so that no agent can be added to a business account without the client knowingly authorising it.

To do it you need myID (the Digital ID app the ATO used to call myGovID) and access to the business through Relationship Authorisation Manager, plus your new agent’s registered agent number. The nomination itself takes a few minutes, and if your new agent needs longer than the window allows, you can extend it before it expires for another 28 days.

Then the part that catches people out.

If that window passes without your agent accepting, the nomination lapses and you make it again from scratch. The ATO’s agent nomination guidance sets out both the process and the expiry. In practice the fix is simple: tell your new accountant the moment you have submitted the nomination, rather than assuming they can see it.

The nomination is not a request to your current accountant. They are not asked to approve it, and they cannot block it.

What your old accountant can and cannot do

The line that matters runs between documents you supplied and documents your accountant produced. Bank statements, invoices, receipts and the records you handed over are generally yours to have back. The depreciation schedule, the workpapers and the file notes built from them belong to the firm, and a firm that is owed money will often sit on both until the invoice is settled.

So the practical read is short. If there is an unpaid bill, pay it. Arguing over a few hundred dollars while a lodgement due date approaches costs more than the bill does.

The ethical clearance letter, and the records you get

You are not asked to write it, sign it or chase it. That is the whole reason changing accountants involves less work than people expect: the handover is a conversation between two firms, and your part in it is answering one email if something is missing.

What comes across in that handover:

• Prior year tax returns and financial statements
• The depreciation schedule and asset register
• The franking account balance, for a company
• The trust deed and distribution minutes, where relevant
• Carried-forward tax losses and any capital loss schedule
• Access to the Xero, MYOB or QuickBooks file

Software access is the one item that can quietly disappear, usually because the subscription sits in the old accountant’s name and lapses at the end of a billing cycle. Get your own copy first.

• Your last three years of lodged returns and financial statements
• The general ledger and trial balance for the current financial year
• Payroll reports and STP finalisations for any year you had employees
• A backup or export of your accounting file if the subscription is in your accountant's name

When to change

Any time. There is no window, no lock-in period and no rule tying the change to the end of the financial year. Waiting for 1 July is the most common unnecessary delay in this entire process.

If you want the tidiest version of it, move once your most recent lodgement is finalised and before the next one falls due. Nothing is half-finished, the records that come across are complete, and your new accountant starts from a clean position instead of picking up someone else’s work in progress.

Mid-year is fine as well, and it is routine. A partly prepared return is not a reason to stay put. Ask the outgoing firm for the work in progress, and expect to pay for the work they have genuinely done.

Being behind on your lodgements is not a reason to wait either. It is often the reason people are unhappy with their accountant in the first place, and catching up on years of overdue returns is a specific piece of work in its own right, usually better handled by a firm that has not already let them slide.

Choosing the replacement

Check the register yourself. The TPB public register is searchable by name or agent number, and it tells you whether someone is currently a registered tax agent and whether their registration carries conditions or recorded sanctions. Anyone charging you a fee to prepare or lodge your return has to be on it.

Then four questions worth asking before you sign anything:

• How do you bill, fixed fee or hourly? This is the single biggest difference in what you can predict, and it is worth understanding the trade-off between fixed fee and hourly billing before you agree to either.
• What is included in the fee, and what triggers an extra charge?
• Who actually does the work, and are they a registered tax agent?
• What do you need from me, and by when?

Ask for the number, too. It is a fair question, and a firm that cannot answer it in one sentence is telling you something useful. ReturnTax publishes a fixed fee for every service: $440 for a simple sole trader return, $440 for a simple company return, $330 for a dormant company, and $660 where there are BAS obligations and up to two employees. All GST inclusive, all agreed before the work starts. Whatever quote you get, check what an accountant should cost against the market before you commit, because the range on identical work is wider than most people expect.

What it actually costs you to move

About an hour of your own time, spread across a couple of weeks of other people’s. The nomination is a five-minute job if it applies to you at all, the clearance letter is not your job, and the only step that reliably goes wrong is leaving an invoice unpaid on the way out.

If you have been putting this off since last year, the switch is smaller than the thing you have been avoiding.