Julia Penny, ICAEW Council member and former President, and Director of JS Penny Consulting, works in practice – despite not doing any of the work that you would typically consider accountancy work. 

She provides training for organisations, which does not require a practising certificate (PC), but she also writes technical material, help sheets and books for a range of organisations, such as accountancy firms or networks, software companies and publishers. When she is offering consultancy, she might get involved with writing policies and procedures, doing file reviews and answering technical queries. While much of this does not need a PC, some, such as answering technical queries or doing file reviews, comes under the definition of ‘working in practice’. 

“It doesn't feel like public practice, in the sense that they’re not normal clients as you’d think of them from a typical accountancy practice,” she says. “For me, it was quite complicated to work out what did and didn’t require a practising certificate.”

Penny consulted the ICAEW Statement on engaging in public practice to determine whether she needed a PC or not. The statement was last updated in 2017, but has now been revised to better reflect European members’ status since the UK left the European Economic Area, make it easier to apply the guidance and make it clearer for members to determine when they would need a PC. 

The changes come into effect from 1 January 2024, but members can view the new guidance now on the Practising Certificate hub to make sure they are prepared.

The changes include:

• References to the EEA have been removed following the UK’s exit from Europe.
• The definition of ‘UK’ has been clarified.
• The 10% de minimise limit has been removed from the guidance to align with money laundering regulations.
• The £100 de minimise limit has been removed with regards to a minimum earnings level per assignment.
• Bookkeeping services have been retained as accountancy services and Annex 1 on guidance on accountancy and reserved services has been updated.
• Improved guidance for members providing services to charities. 
• Annex 2 on guidance on public practice scenarios has been updated.

Penny points out that consultancy can easily end up coming under the umbrella of engaging in practice, even if in the first instance you take on something outside of the requirements for a PC. “You normally don’t want to say no to additional work, but if you have no practising certificate, you can’t stray beyond certain lines, so it can be quite restrictive. So, while it has an upfront cost, it’s certainly beneficial.”

The worst thing members can do is assume that they don’t need a PC because they aren’t running a traditional practice. If they provide services that require a PC without checking they need one and applying for one, it could end with disciplinary action.

“Don’t assume that if you check the statement for five minutes, you will be able to tell if you need a PC or not,” says Penny. “If you’re lucky, it might be obvious straightaway one way or the other, but there will be lots of people in the margins. You will probably need to take time to go through the statement and the guidance and to really carefully think and exercise your judgement. 

“You must ask yourself a question: do you restrict your business and avoid stepping into any territory that requires a PC, or do you get a PC and ensure that you’re covered no matter what work you take on? 

“If you’re a small practice or a sole practitioner, it’s not very expensive. So, you’re better to err on the side of safety. There’s also a certain rigour with a practising certificate. There are rules and standards that you should adhere to, which ultimately are just good practice.”

To find out more about the changes to the Statement on engaging in public practice and to read scenarios to help you work out whether you need a PC, visit the Practising Certificate hub.