This helpsheet has been issued by ICAEW’s Technical Advisory Service to help ICAEW members consider the practical and ethical implications of ceasing to practice; be it retiring from practice or closing your practice.

Members may also wish to refer to the following related guidance:

• ICAEW Code of Ethics
• Professional Indemnity Insurance
• ICAEW statement on engaging in public practice
• Document retention
• Closing your practice
• Changes in the composition of a firm

When a member retires from a practice that will be continuing, they will need to consider run off cover and their own plans for the future.

PII Regulation 2.7 requires members to use their best endeavours to ensure they are covered by arrangements which comply with ICAEW's PII Regulations for at least two years from the date they ceased in practice. Paragraph 6.28 states run off cover may be provided under the policy of the continuing practice, or a member may need to take out an individual policy.

If a member's former practice has undertaken to include run-off cover for them within its current cover, members must remember to check that it continues to cover them for at least two years. At the end of that time, members should consider whether they need continued cover, the recommendations is six years in total.

It is common for retiring principals to continue in their former practice as a consultant. Members wishing to continue as a consultant but rescind their practising certificate (PC) need to be careful that they are not being held out as principal.

Section 12 of the ICAEW statement on engaging in public practice states:

You would be considered to be held out as a principal if you are employed in an entity that fulfils the definition of a public practitioner and either:

1. there are no other professional accountants in positions of seniority or supervision over you within the organisation; or
2. the clients of the entity are otherwise led to believe that you are a principal.

The second scenario is most likely in the case of a retiring member staying on as a consultant. Communication with clients is key in ensuring a member is not held out as a principal. Members would not be considered to be a principal provided that it is clear on the firm's website, formal letters or emails to clients or even in the way the member is introduced to clients on engagements. The retiring principle should also be removed from the ‘Partners’ section (or equivalent) of the firm’s website.

If you are held out as principal or the firm is not taking responsibility for your work, whether you’re self-employed or acting through a firm, you would require a PC.

Members also need to consider whether a PC is required if they decide to take on other roles once they have retired. For example, members may wish to do provide accountancy services to friends and family or carry out an independent examination of a small charity. Members may also be named as executors in a client’s will or act as Power of Attorney for a client. Each role would need to be assessed individually as to whether as PC is required.

Members may qualify for a reduced rate subscription dependent on their income. Alternatively, you may be eligible as a retired member or be a life member. In both cases all remunerated business and professional activities must have ceased and your PC must be surrendered.

More information can be found on our Fees and subscriptions page.

Where there are changes to an ICAEW member firms structure and/or principals, then ICAEW will need to be informed.

More guidance can be found on our maintaining your firm's record page.

ICAEW members, affiliates, ICAEW students and staff in eligible firms with member firm access can discuss their specific situation with the Technical Advisory Service on +44 (0)1908 248 250 or via webchat.