Can an accountant keep my records?

We are not a legal advice service. This page summarises published guidance from ICAEW and ACCA to their members. If you are in a dispute over records, take your own legal advice.

What a lien is

A lien is a right to keep someone's property until they pay what they owe. ICAEW says case law means accountants can only use a "particular lien": the right to keep a client's property until the client pays the fees for the work done on that property.¹ It does not let an accountant keep everything until every bill is paid.

The four conditions

ICAEW and ACCA both say a particular lien exists only if all four of these apply:¹²

1. The documents belong to the client who owes the money. If you owe fees personally, the accountant cannot hold your company's documents for that debt.
2. They were received by proper means, for example handed over by you, not sent by someone else in error.
3. Work was done on them and a bill was issued. ICAEW warns members that a long gap before billing, charging for time previously written off, or a bill out of line with past years may make a lien inappropriate.
4. The unpaid fee is for that work. Unpaid tax advice fees, for example, do not justify keeping the papers used for your accounts. Fees for one year may not justify keeping earlier years' records.

What an accountant cannot keep

Under English law, ACCA's guidance says no lien can exist over:²

ACCA says this leaves a lien over records of an unincorporated client, such as a sole trader's books, or over documents prepared for a company that are not its accounting records, such as tax returns. ACCA adds that, if all accounting records fall within the law, the lien has little practical value for company clients.² ICAEW tells members that a lien over a company's or LLP's documents is rarely straightforward and that they should take legal advice.¹

A lien never blocks the handover information

• ACCA members must give the new accountant the last approved accounts and a detailed trial balance even where fees are unpaid. ACCA says a lien does not remove this duty.²³
• ICAEW members may have the right to withhold records, but ICAEW says this does not give them the right to refuse to answer the new accountant's professional enquiry.⁴

When a lien is not appropriate

ICAEW says a lien is meant to help get payment from a slow client, not to extract payment from a client who genuinely disputes the fee. It lists times when using one may be inappropriate:¹

• a court claim has been issued;
• money has been paid into court or to a third party to hold;
• an arbitrator has been appointed whose decision will bind both sides;
• an agreement has been reached and confirmed in writing;
• other people would lose out, for example if withholding payroll records meant staff would not be paid.

If a company goes into administration or liquidation, ACCA says an accountant cannot use a lien to keep its records from the administrator or liquidator.²

Scotland and Northern Ireland

ICAEW's guidance reflects the law of England and Wales and says the law of Scotland and Northern Ireland may differ. ACCA's guidance also says much of it reflects the law of England and Wales.⁵² If you are outside England and Wales, take advice on the law where you are.

If your accountant is holding your records

1. Ask in writing which documents they are keeping, and for which unpaid bill.
2. Check those documents against the four conditions and the list of records they cannot keep.
3. Say clearly whether you dispute the bill or need time to pay. ICAEW expects members to take reasonable steps to resolve a fee dispute.¹
4. ACCA's code says a member must advise a client who disputes a lien to consult their own solicitors.²

None of this stops you moving. You can choose to change accountant, subject to any notice period or other terms. See What your old accountant must hand over.