How to Switch Auditors Mid-Year in the UK

Written by the Experlu Editorial Team Reviewed by Rajesh M., ACA (ICAEW) – Audit Support Specialist, ex KPMG & Deloitte, 20+ years’ experience in UK statutory audit, advisory and financial reporting. Last updated: May 2026

TL;DR – Key Takeaways

• You can change auditors mid-year – there’s no legal requirement to wait until year-end
• The legal process requires special notice (28 days), an ordinary resolution at a general meeting, and filing form AA03 at Companies House within 14 days
• Your outgoing auditor must provide a s.519 statement of circumstances – either confirming there are none, or explaining any issues they consider significant
• The earlier in the financial year you switch, the smoother the transition – Q3 or earlier is ideal, Q4 is workable but adds complexity
• The incoming auditor must contact the outgoing auditor for professional clearance before accepting – this is a mandatory ethical requirement
• Unpaid or disputed fees make handovers harder – resolve fee disputes before starting the removal process if possible

Most businesses change their auditor at year-end. It is the natural moment when the engagement is complete, the accounts are filed, and there is a clean break before the next cycle begins.

But some situations do not wait for year-end. A relationship breaks down. Fees escalate without warning. A business grows into territory the incumbent firm does not have the experience to handle. A merger or acquisition changes the picture entirely.

When that happens, business owners and finance directors often assume that switching auditors mid-year is complicated, risky, or simply not possible without causing disruption to their accounts. In most cases, that assumption is wrong.

This article sets out exactly how auditor changes work in the UK, what the legal process involves, what your outgoing auditor is required to do, and how to manage the transition without it becoming a distraction from running your business.

Is It Actually Possible to Change Auditors Mid-Year?

Yes. There is no legal requirement in the UK to retain the same auditor for an entire financial year. The Companies Act 2006 sets out the process for removing an auditor before their term expires, and it is a process that businesses exercise regularly – more often than most people realise.

The decision to change auditors mid-year is, at its core, a commercial one. The legal mechanics exist to make it orderly and to protect the interests of shareholders, not to make it difficult.

That said, timing does matter. Changing auditors in the final weeks before a year-end filing deadline, or during active fieldwork, creates practical complications that an earlier change would not. The earlier in the financial year you make the decision to switch, the smoother the transition tends to be.

The Most Common Reasons Businesses Switch Mid-Year

Understanding why businesses switch helps you assess whether your own situation justifies a change and whether the issues you are experiencing are likely to be resolved by a new firm or whether they reflect something in your own processes that needs addressing first.

1. Fee disputes and scope creep. 

The most common reason by some distance. A business agrees a fee at the start of the engagement, and by the time fieldwork is complete the invoice is significantly higher.

In many cases this reflects poor records or additional work the auditor legitimately had to perform. In others it reflects an auditor who underquoted to win the business and then recovered the margin through additional charges.

If you cannot get a clear explanation for why fees exceeded the agreed scope, that is a legitimate reason to look elsewhere.

2. Changes in the business. 

A firm that was the right fit when your business had £2 million in turnover may not be equipped to handle the audit when turnover reaches £12 million, particularly if the business has added subsidiaries, international operations, or complex financial instruments along the way. Audit complexity scales with business complexity, and not every firm scales with it.

3. Poor communication and responsiveness. 

Audit is not a once-a-year interaction. Queries come up throughout the year, deadlines need managing, and issues sometimes require a rapid response.

If your auditor is consistently slow to respond, difficult to reach, or rotates staff so frequently that no one on their team understands your business, the relationship is not working – regardless of whether the audit opinion itself is technically sound.

4. Partner rotation and relationship breakdown. 

Many businesses build a strong working relationship with a specific audit partner, and that relationship is disrupted when the firm rotates their team.

Under the FRC’s Ethical Standard, audit engagement partners at listed companies must rotate at least every five years. For unlisted companies the rules are less prescriptive, but rotation still happens.

If a change at the firm level has changed the quality or character of your audit experience, switching is a reasonable response.

5. Conflict of interest concerns. 

If your auditor is also providing significant non-audit services such as tax advisory, corporate finance, or IT consulting there is a potential independence question that both you and your auditor should be taking seriously.

The FRC’s Revised Ethical Standard 2024 tightened the restrictions on non-audit services that auditors can provide to their audit clients. If you have concerns about whether your auditor’s independence is genuinely intact, they are worth raising directly and if the response is unsatisfactory, they are a legitimate reason to change.

6. Merger or acquisition activity. 

If your business is being acquired, the acquirer’s audit firm will often conduct the due diligence and may then take over as auditor going forward. Similarly, if you are acquiring another business, consolidating to a single audit firm across the group is often more efficient than maintaining separate relationships.

The Legal Process for Removing an Auditor

Under sections 510 to 513 of the Companies Act 2006, a company can remove an auditor before the expiry of their term by passing an ordinary resolution at a general meeting of shareholders.

The process involves specific notice requirements designed to give the outgoing auditor an opportunity to respond. Here is how it works in practice.

• Step 1 – Special notice to the company. Any shareholder wishing to propose a resolution to remove the auditor must give the company at least 28 days’ notice before the general meeting at which the resolution will be put to a vote. This is called special notice and it is a legal requirement a resolution passed without it is invalid.
• Step 2 – The company notifies the outgoing auditor. On receiving special notice, the company must immediately send a copy to the outgoing auditor. The auditor then has the right to make written representations to the company and to request that those representations be circulated to all shareholders before the meeting.
• Step 3 – Shareholders receive the representations. If the auditor submits written representations of reasonable length, the company must include them with the notice of meeting sent to shareholders unless the court determines on application that the auditor is abusing the process to secure needless publicity for defamatory material. In practice, auditor representations at this stage are relatively rare for SMEs and owner-managed businesses.
• Step 4 – The resolution is passed. At the general meeting, shareholders vote on the ordinary resolution to remove the auditor. A simple majority is sufficient. The removal takes effect immediately on the resolution being passed.
• Step 5 – Notification to Companies House. Within 14 days of the resolution being passed, the company must file a notice with Companies House using form AA03. Companies House will record the change on the public register.
• Step 6 – The outgoing auditor’s statement of circumstances. This is the step that many businesses do not know about, and it matters. When an auditor ceases to hold office – whether through removal, resignation, or non-reappointment they are required under s.519 of the Companies Act 2006 to deposit a statement at the company’s registered office.

The statement must set out either the circumstances connected with their ceasing to hold office that the auditor considers should be brought to the attention of members or creditors, or a statement that there are no such circumstances.

If the auditor identifies circumstances they consider significant, the company must send a copy of that statement to every person entitled to receive a copy of the accounts – including all shareholders. The auditor can also file the statement directly with Companies House if the company does not act within 21 days.

For most straightforward changes, the outgoing auditor’s statement will confirm that there are no circumstances to bring to members’ attention. But if the relationship has broken down acrimoniously, or if there are unresolved disputes about the accounts, the statement is a mechanism through which the auditor can put their position on public record. This is worth bearing in mind when managing the communication with your outgoing firm.

What About Auditor Resignation?

Not all mid-year changes are initiated by the company. Auditors can and do resign from engagements most commonly where they have concerns about management integrity, where they cannot obtain sufficient evidence to form an opinion, or where the client relationship has become unworkable.

When an auditor resigns, they must deposit a notice of resignation at the company’s registered office, accompanied by the same statement of circumstances described above. If the auditor considers there are circumstances to bring to shareholders’ attention, they can requisition the company to call a general meeting so they can explain those circumstances in person.

If you receive notice that your auditor is resigning, the statement of circumstances is the first document to read carefully. If it contains anything beyond a standard statement that there are no significant circumstances, you need to understand what the auditor is saying and why because the content of that statement is a matter of public record.

Appointing the Incoming Auditor

Once the outgoing auditor is removed or has resigned, the board of directors can appoint a new auditor to fill the casual vacancy. This appointment holds until the next Annual General Meeting, at which point shareholders formally ratify or replace the appointment.

Before the incoming auditor can formally accept the appointment, they are required under ethical standards to contact the outgoing auditor directly. This is not optional it is a professional obligation under ICAEW and ACCA ethical guidance. The purpose is to establish whether there are any professional reasons why the incoming firm should not accept the appointment.

The outgoing auditor is required to respond promptly. If they have concerns about unpaid fees, about matters they have identified during the audit, or about any other professional issue they should communicate these to the incoming firm. The incoming firm then makes its own judgement about whether to proceed.

In practice, for most routine mid-year changes, this professional clearance process is straightforward. The outgoing firm confirms there are no professional reasons to decline, the incoming firm accepts, and the transition begins.

Managing the Handover

The quality of the transition from one auditor to another depends almost entirely on how well the handover is managed and specifically on how complete and organised the audit documentation is.

The incoming auditor needs to understand your business, your accounting policies, your prior year audit findings, and any areas of judgement or estimation that carry through from one year to the next. The more thoroughly this is documented, the faster the incoming firm can get up to speed and the less disruption there is to your finance team during the transition.

What to prepare for the incoming auditor:

• Prior year audited financial statements and audit report
• Prior year management accounts and working papers, to the extent these are available to you
• A summary of your accounting policies and any significant areas of judgement or estimation
• Details of any prior year audit adjustments or management letter points
• Your current year management accounts and any interim financial information
• Details of any significant transactions or events since the prior year-end
• Contact details for your accountant, solicitors, bankers, and any other advisers

The incoming auditor will also liaise directly with your outgoing firm to obtain professional clearance and to discuss any matters relevant to the transition. You do not need to manage this communication it happens between the two firms but it is worth making clear to your outgoing auditor that you expect them to cooperate fully and promptly.

Timing – When Does a Mid-Year Change Make Sense?

There is no perfect moment to change auditors mid-year, but some moments are considerably better than others.

The best time is within the first few months of a financial year, before the incoming auditor needs to plan for the year-end. This gives the new firm time to conduct their client onboarding procedures, review prior year working papers, and plan their approach to the current year audit without time pressure.

A workable time is mid-year around the six-month point. The incoming auditor will need to perform additional procedures to satisfy themselves about the opening position and the first half of the year, which may add some cost. But for most businesses this is manageable.

A difficult time is the final quarter of the financial year, particularly if the outgoing auditor is already engaged in planning or has started fieldwork. In this situation, the incoming auditor is inheriting a partially-started job with limited visibility of what has already been done. It is not impossible, but it adds complexity and cost, and the filing deadline may create pressure that compromises the quality of the transition.

The worst time is during active fieldwork or in the weeks immediately before the filing deadline. If you are in this position, it is worth asking whether the issues driving the change are serious enough to justify the disruption of switching now, or whether you would be better served completing the current year with the existing firm and managing an orderly transition to a new firm for the following year.

How to Find the Right Incoming Auditor

The process of finding a replacement auditor mid-year is exactly the same as finding one at any other point with the added consideration of timeline. You need a firm that has current capacity, the right sector experience, and the ability to onboard a new client and plan for a year-end within your specific timeframe.

This is where the traditional approach of asking for recommendations and making individual approaches to firms becomes particularly time-consuming. 

Auditors with genuine capacity and sector experience do not always advertise it openly, and the process of approaching multiple firms, waiting for responses, and comparing proposals can easily take three to four weeks, which you may not have.

Experlu matches businesses with vetted, ICAEW and ACCA-registered auditors across the UK, including firms with capacity for mid-year appointments. You share your requirements – including your financial year-end, your sector, your approximate size, and the reason for the change and receive three tailored proposals within 48 hours. The service is free to use.

When you are speaking to incoming auditors, the questions to ask are the same whether you are switching mid-year or at year-end:

• Do you have capacity for a client with our year-end date?
• Have you audited businesses in our sector before, and at what size?
• Who will actually be doing the fieldwork, and what is your partner-to-staff ratio on engagements of this size?
• What is your process for managing the transition from the outgoing auditor?
• What circumstances would cause your fee to exceed the quoted figure?

The answers will quickly tell you whether you are speaking to a firm that understands your situation or one that is treating you as a generic new-business enquiry.

What to Tell Your Outgoing Auditor

This is the conversation most business owners dread, and it is usually less difficult than they expect.

Your outgoing auditor is a professional firm. They will have experienced client changes before. The conversation does not require a detailed explanation of every grievance – in fact, a long list of complaints rarely serves anyone well and can make the handover more difficult.

A straightforward approach: inform your outgoing auditor in writing that the company has decided to make a change for the following financial year, thank them for their work, and confirm that the company will be following the appropriate legal process. Keep the tone professional and factual.

If there are outstanding fees, clarify the position before the formal removal process begins. An outgoing auditor with a disputed or unpaid fee is under no obligation to ensure a smooth handover, and while professional standards require them to cooperate with the incoming firm, an unresolved fee dispute adds friction to a process that benefits from being as frictionless as possible.

Case Study: When a Mid-Year Switch Makes Sense

Background: A London-based (Owned by an Eastern European group) SaaS company with £18 million turnover and 65 employees had used the same regional audit firm for four years. In month 9 of their financial year (June 2025), they encountered three problems simultaneously: their audit partner left the firm and was replaced without consultation, their interim audit fee came in 40% above the quoted figure with no clear explanation, and the new partner requested documentation that the previous partner had never asked for – suggesting the firm had lost institutional knowledge of the business.

The decision: The finance director approached three firms through Experlu in early July, explained the situation, and received proposals within 48 hours. They selected a firm with SaaS sector experience, removed the incumbent auditor by shareholder resolution in late July, and the new firm completed its onboarding and planning by mid-August – three months before the March 2026 year-end.

The outcome: The incoming auditor identified two control weaknesses the previous firm had missed, completed the year-end audit two weeks faster than the prior year, and charged a fee 35% lower than the incumbent’s revised quote. The s519 statement from the outgoing auditor confirmed “no circumstances to bring to members’ attention” – a clean handover. The FD later noted that the hardest part was making the decision to switch; the process itself was straightforward once they committed to it.

Key lesson: Switching mid-year worked because they acted early enough (Q3) to give the incoming firm proper planning time. Waiting until Q4 would have created unnecessary pressure.

Frequently Asked Questions

Can I change auditors at any point in the financial year? 

Yes. There is no legal requirement to wait until year-end. The Companies Act 2006 allows shareholders to remove an auditor at any time by ordinary resolution, subject to the special notice requirements set out in s.511.

What is special notice, and how does it work? 

Special notice is a legal requirement under s.511 of the Companies Act 2006. A shareholder must give the company at least 28 days’ notice before the general meeting at which the resolution to remove the auditor will be voted on. 

The company must immediately send a copy of this notice to the outgoing auditor, who then has the right to make written representations to shareholders.

What is the s.519 statement of circumstances? 

When an auditor ceases to hold office for any reason – removal, resignation, or non-reappointment – they must deposit a statement at the company’s registered office under s.519 of the Companies Act 2006. 

The statement must either confirm that there are no circumstances connected with their ceasing to hold office that need to be brought to shareholders’ attention, or set out what those circumstances are. If the auditor identifies significant circumstances, the company must circulate the statement to all shareholders.

Do I need to tell Companies House when I change auditors? 

Yes. Within 14 days of passing the resolution to remove an auditor, the company must file form AA03 with Companies House. This is a legal requirement under s.512 of the Companies Act 2006.

What happens if my outgoing auditor refuses to cooperate with the incoming firm? 

Professional standards under ICAEW and ACCA ethical guidance require the outgoing auditor to respond promptly to the incoming auditor’s request for professional clearance. 

If they fail to cooperate, the incoming firm may decline the appointment, or they may accept it but note the lack of cooperation in their engagement risk assessment. 

Unresolved fee disputes are the most common reason for difficult handovers – resolving these before starting the removal process makes the transition significantly smoother.

Can the incoming auditor start work before the outgoing auditor is formally removed?

No. The incoming auditor cannot formally accept the appointment until the outgoing auditor has been removed by shareholder resolution or has resigned. 

However, the incoming firm can conduct preliminary discussions, review the prior year accounts, and prepare for the engagement during the notice period, so that they are ready to begin work as soon as the appointment is confirmed.

Will changing auditors mid-year delay my year-end accounts? 

Not if the change is managed early enough in the financial year. If you switch in Q1 or Q2, the incoming auditor has ample time to plan and prepare. A Q3 switch is workable but requires the incoming firm to move quickly. 

A Q4 switch – particularly if the outgoing auditor has already started fieldwork – may create timeline pressure and could delay the filing if not carefully managed.

What should I do if my auditor resigns unexpectedly? 

Read the s.519 statement of circumstances carefully. If it contains anything beyond a standard “no circumstances” statement, you need to understand what the auditor is flagging and why. 

Speak to your accountant and, if necessary, take legal advice. Then find a replacement auditor as quickly as possible – Experlu can match you with three vetted firms within 48 hours. The board of directors can appoint a replacement to fill the casual vacancy, and shareholders will formally ratify the appointment at the next AGM.

Summary

Switching auditors mid-year is a legitimate and relatively common occurrence. The legal process is straightforward for businesses that follow it correctly special notice, shareholder resolution, Companies House filing, and the outgoing auditor’s statement of circumstances. The practical challenge is managing the timing and the handover well enough that the incoming firm can do its job without significant disruption to your finance team or your filing deadline.

If you are considering a mid-year change and need to find the right incoming firm quickly, Experlu can match you with three vetted audit professionals within 48 hours at no cost to your business. You describe your situation, sector, and timeline, and we handle the matching.

The second post in this series covers what to look for when comparing audit proposals – including the questions most businesses forget to ask before signing an engagement letter.

This article has been reviewed by Rajesh M., ACA (ICAEW), Audit Support Specialist, ex KPMG & Deloitte, with 20+ years of experience in UK statutory audit, advisory and financial reporting. Last updated May 2026. Legal process references sourced from the Companies Act 2006 (sections 510–513, 519) and ICAEW ethical guidance on professional clearance.