1) You’ve been named as executor in a client’s will
If you’re not a principal or held out as a principal then you wouldn’t need a practising certificate (PC) in this scenario.
Don’t forget that probate is a reserved activity requiring authorisation or a licence from an approved regulator such as ICAEW. Your firm would not need to be accredited if you are acting in a personal capacity without payment and are not discharging your duty as executor through the firm.
2) You’ve been named as executor in a friend’s will
In this situation, if you are an ICAEW member but not a principal, whether you need a PC or not would depend on whether you’re charging a fee.
You would need a PC if you are charging for your services as you will be considered to be in public practice. As mentioned above, probate is a reserved activity requiring authorisation and you would need to be accredited for probate before proceeding.
You wouldn’t require a PC or need to be accredited for probate if you are acting in a personal capacity and are not charging a fee for any of the work.
3) You’re a marketing principal in a public practice
If you’re an ICAEW member and a marketing principal in a public practice, you would require a PC even if you don’t provide accountancy services to clients.
That’s because as a principal in public practice, you must hold a PC. Your personal role is irrelevant.
4) You have the functional title of tax partner, but you’re not a director
If you work in a practice but aren’t a statutory director (or member of the LLP), whether you need a PC or not comes down to whether you’re considered to be held out as a principal.
If you are considered to be held out as a principal because there are no other professional accountants in positions of seniority or supervision over you within the organisation, or clients are otherwise led to believe that you are a principal, you would need a PC.
You do not need a PC if you are not considered to be held out as a principal and that it is clear on the firm’s website or elsewhere that you’re not a principal.
5) You’re a principal in a business providing company secretarial services
If you’re a principal in an entity that only provides company secretarial services such as company formation, providing a registered office address and completion of confirmation statements, you wouldn’t require a PC as these services are not considered to be accountancy or reserved services by ICAEW.
6) You’re a principal in a corporate finance boutique
For the most part, your role in preparing a business for sale comprises collating information from financial statements, assessing budgets and forecasts supplied by management and making comparisons based on publicly available industry data. Turnover derived from the provision of accountancy or reserved services is consistently around 5% of your total income.
Previously, if your firm’s turnover derived from the provision of accountancy or reserved services did not regularly exceed 10%, you would not have needed a PC.
However, this has now changed and the 10% de minimis limit has been removed to align it with other regulations, such as the Money Laundering Regulations, which do not contain a de minimis limit for supervision requirements. Therefore, in this situation you would now require a PC.
7) You’re a principal in a public practice based in France
ICAEW members in practice outside of the UK (for the avoidance of doubt, the UK includes England, Wales, Scotland, Northern Ireland, the Channel Islands and Isle of Man) who don’t have any clients in the UK will not require a PC under the new guidelines.
Explore all of the scenarios relating to the practising certificate changes to help decide whether it is needed or not.
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