Referral fees for bookkeepers: what the rules actually say

Bookkeeping is not a protected title, so the rulebook depends on affiliation. Members of the Institute of Certified Bookkeepers or the International Association of Bookkeepers are bound by codes of professional conduct that address objectivity and conflicts of interest — referral fees are generally permitted, with disclosure to the client as the operative condition. Unaffiliated bookkeepers face no professional-body rule at all, though contract law, the FCA perimeter and plain commercial reputation still apply in full.

One universal obligation: every bookkeeper in practice must have anti-money laundering supervision, either through a professional body or HMRC directly. Trading without it is an offence. It has nothing to do with referral fees as such, but an adviser firm doing due diligence on a would-be introducer will check it, and its absence ends the conversation.

The practical standard, whatever the affiliation: disclose the fee, in writing, and keep the client's acknowledgement.

The serious rule comes from the Financial Services and Markets Act 2000. Advising on investments, pensions or most insurance is a regulated activity; doing it without FCA authorisation is a criminal offence carrying up to two years' imprisonment. No professional body membership changes this, and no disclaimer cures it.

Bookkeepers are well placed to spot triggers — they see the numbers monthly, often before the accountant does. A client suddenly holding £80,000 of surplus cash, a director with no pension contributions going through the books, a new baby on the payroll paperwork. Spotting is fine. Flagging is fine. The line:

• Fine: "That's a lot of cash sitting idle — would you like an introduction to a regulated financial adviser?"
• Not fine: "You'd be better off putting that into an ISA before April."

The first is an introduction. The second is advice, and the fact that it happens to be sensible does not make it legal.

The mechanics take an afternoon to establish and years to benefit from:

• Check the adviser on the FCA Register — authorisation, permissions, and no warnings; recheck annually
• Sign a written introducer agreement covering the fee basis (fixed amount or percentage), payment timing and what each side does
• Disclose to the client in writing before the introduction, stating that a fee is received and how much
• Record each referral — date, client, firm, disclosure sent — so the file speaks for itself
• Stay inside the introducer role, every time, including in casual conversation

Referral income also belongs in the accounts and the tax return like any other revenue — a point bookkeepers, of all people, will not need repeating. The whole setup is boring by design. Boring is the goal. For those who want the tracking and paperwork handled systematically, SmartPeer generates disclosure letters and logs each referral as part of the process.