Why UK Accounting Firms Outsource Bookkeeping: Recruitment, Making Tax Digital and the Rules for Sending Work to India#
Three published numbers set the scene. Making Tax Digital for Income Tax became mandatory from 6 April 2026 for people with qualifying income over £50,000. AAT student numbers in the UK and Republic of Ireland rose by more than 30% in 2024. And in an ICAEW survey of mid-tier firms in May 2024, half the firms had already offshored or outsourced at least one service line.
This article sets out those figures and the others around them, what they mean for a practice, which work can go offshore and which stays with the firm, and what rules apply when it goes to India. We are an Indian firm of Chartered Accountants that does offshore bookkeeping inside the client's QuickBooks Online file. Each figure is linked to its source, with the year, and the sources are listed at the end.
Recruitment and the pipeline#
The Financial Reporting Council's Key Facts and Trends in the Accountancy Profession 2025, the 23rd edition, was published on 15 October 2025 and covers 2024. It shows a pipeline that is flat rather than collapsing:
- Students: UK and Republic of Ireland accountancy student numbers were under 155,000 in 2024, down 0.3%. Worldwide they were under 585,000, down 0.1%.
- AAT: AAT students in the UK and Republic of Ireland rose by more than 30% in 2024, while AAT members fell by nearly 2%. AAT is the entry-level, bookkeeping-level route, so this is the part of the pipeline that grew.
- Members: UK and Republic of Ireland professional body members numbered over 408,000, up 0.8%.
- Audit firms: registered audit firms fell from 4,038 in 2023 to 3,760 in 2024, a drop of 6.9%, and 24.9% below the 5,007 registered in 2020. That is a sign of consolidation, not a staffing count.
Recruitment pressure shows up more clearly in what practices say. In the ICAEW's May 2024 survey of mid-tier firms, covered in the Audit & Beyond article on outsourcing and offshoring, 70% of managing partners ranked a talent issue as their top concern. Only 9% did not mention talent in their top three.
Smaller firms report something similar. The ACCA's Accounting Talent Index 2025, covered in Accounting Business magazine in September 2025, surveyed 169 smaller UK and Australian accounting businesses. 48% said the shortage was worse than three years earlier, down from 74% in the prior year's edition. 44% reported higher pay costs, against 80% in 2024. The pressure is still there in the survey, but it is easing on both measures. This is a small sample of smaller firms, so it is not an industry total.
The workload driver: Making Tax Digital for Income Tax#
The second pressure is volume. GOV.UK's guidance on Making Tax Digital for Income Tax sets three start dates, each tied to qualifying income in an earlier tax year:
| Mandatory from | Qualifying income over | Based on tax year |
|---|---|---|
| 6 April 2026 | £50,000 | 2024-25 |
| 6 April 2027 | £30,000 | 2025-26 |
| 6 April 2028 | £20,000 | 2026-27 |
GOV.UK defines qualifying income on a separate page, so check that definition for any individual client.
What this means at a practice is that each step brings in a new group of sole traders and landlords whose records have to be kept in a form that supports regular digital reporting. That is bookkeeping work: keeping transactions coded, bank accounts reconciled and records current through the year. It adds to a practice's workload at a time when recruitment is difficult, and it is work that can be done inside a client's accounting file. The decisions that rest on those records, and the submissions made to HMRC, remain with the firm and the client.
How UK firms respond: the ICAEW mid-tier survey#
The ICAEW's "Evolution of mid-tier accountancy firms" survey was run in May 2024 among managing partners of firms with 11 to 249 partners. It had a 40% response rate and more than 100 firms replied. As reported in the Audit & Beyond article:
- Half of the firms had already offshored or outsourced at least one service line.
- Offshored chargeable hours had risen by 86% over three years.
- Firms expected offshored chargeable hours to rise by a further 71% over the next three years.
These are mid-tier firms, not small practices, and the survey covers outsourcing and offshoring together. The figures should not be read as a share for firms of every size. Outsourcing is also one response among several to the talent pressure above, and the survey does not say how any one practice should weigh them.
What can and cannot be outsourced#
The line is about who is responsible to the client. Work that stays with the firm:
- Self-assessment and other tax returns, including their preparation and filing
- Sign-off on accounts and the firm's own review conclusions
- Advice to the client
- The client relationship
Work that can be done by an offshore team inside the client's QuickBooks Online file, and that we do:
- Monthly bookkeeping and month-end close
- Accounts payable and accounts receivable
- Bank, credit card and loan reconciliations
- Cleanup of past periods: recategorisation, duplicate entries, undeposited funds, "Ask My Accountant" balances
- Financial statements and management reports for the firm to review
- Year-end close and tax-ready workpapers for the firm to use
We do not prepare UK tax returns, VAT returns or payroll, and we work in QuickBooks Online only. For the mechanics, see our guides on backoffice support for accounting firms, sending a client file to an offshore bookkeeping team and the month-end close in QuickBooks Online. Our parallel article for the US market is Why US CPA and Accounting Firms Outsource Bookkeeping.
Why India#
The profession's size. ICAI's 77th Annual Report for 2025-26 records 452,825 members as on 1 April 2026: 123,155 Fellows and 329,670 Associates. Of these, 158,887 were in full-time practice. ICAI enrolled 29,720 new members in the year ended 31 March 2026.
The route to the qualification. Under ICAI's New Scheme, launched on 1 July 2023, the CA course has three levels: Foundation, Intermediate and Final. ICAI's FAQ on the New Scheme (October 2024) gives practical training as 2 years, with 9 to 12 months of industrial training permitted within the last part of it.
Standards. India issues Indian Accounting Standards (Ind AS) "based on IFRS Standards" with "certain carve-outs and carve-ins", according to the IFRS Foundation's jurisdictional profile. Mandatory adoption is phased from FY 2016-17. Ind AS is a related set of standards with differences, not IFRS itself.
ICAI and the ICAEW, stated precisely. ICAI's FAQ on MoUs and MRAs, updated on 20 May 2026, describes its arrangement with the ICAEW as a memorandum of understanding, not a mutual recognition agreement. It applies to members only. The FAQ states that audit and practising rights are not included, and that an ICAI member joining the ICAEW needs to pass limited exams: Corporate Reporting, Strategic Business Management, a Case Study and an Ethics programme. Our qualification therefore carries no UK audit or practising rights, and we do not claim any.
The services export figure. The Reserve Bank of India's survey of software and ITES exports for 2024-25, published on 4 November 2025, put exports of "finance and accounting auditing bookkeeping and tax consulting services" at US$ 8.2 billion (Rs 69,245 crore). That was 12.3% of ITES/BPO exports. The same row for 2023-24 was US$ 7.3 billion (Rs 60,415 crore), or 12.2%.
Time zones. India Standard Time is UTC+5:30, per the Press Information Bureau. UK clocks go forward on Sunday 29 March 2026 and back on Sunday 25 October 2026, with GMT in winter and BST in summer, per GOV.UK. By our arithmetic, India is ahead of the UK by 5 hours 30 minutes in winter and 4 hours 30 minutes in summer. The gap shifts for a few weeks each year because the UK and other countries change their clocks on different dates. A UK morning therefore falls in the Indian afternoon, which gives an overlapping working day for questions and review calls. It is not a promise about turnaround, which depends on the file.
Rules a UK firm must follow when work goes to India#
We are not UK lawyers, and your own data protection adviser should confirm how these apply to your firm.
UK GDPR international transfers. The ICO's guide to international transfers says a restricted transfer needs either adequacy regulations or an appropriate safeguard, such as the International Data Transfer Agreement (IDTA) or the Addendum. The guide describes adequacy as the most efficient way, and it uses an Indian service provider as an example of a restricted transfer.
India is not on the list of countries covered by UK adequacy regulations. The ICO's adequacy list names the EEA, Andorra, Argentina, the Faroe Islands, Gibraltar, Guernsey, the Isle of Man, Israel, Jersey, New Zealand, Switzerland, Uruguay and South Korea, with partial coverage for Canada, Japan and the US. The ACCA's guidance for small and medium practices states that India, the Philippines and South Africa "do not currently (February 2026) have UK adequacy regulations". For an offshore bookkeeping arrangement, that means relying on an appropriate safeguard such as the IDTA or the Addendum, and your adviser should confirm exactly what that requires for your firm.
Your institute's guidance and your engagement terms. Firms should check their own institute's guidance on using subcontractors and offshore providers, and check what their engagement letters say about who may handle client data. We make no statement about what any UK body requires you to tell clients.
Confidentiality on our side. ICAI's Code of Ethics treats a practising Chartered Accountant as guilty of professional misconduct if he discloses information acquired in a professional engagement to anyone other than his client without the client's consent, or otherwise than as required by law. That is Clause (1) of Part I of the Second Schedule, as quoted in ICAI-hosted ethics material.
Who does the work at our firm#
CA Alok Kumar Acharya, ACA (ICAI, India), founded the firm and has 11+ years of professional experience. His earlier work was at PwC and Grant Thornton, in accounting, taxation, audit and financial reporting. He later worked with the William J. Clinton Foundation (India), the Indian affiliate of the Clinton Health Access Initiative (CHAI). Work done in a client's file is reviewed by a Chartered Accountant before it is returned.
How to start#
- Send one client file. We review it and send an estimate within 48 hours, with a capped number of hours.
- Limited access. Access is limited to the files needed for the work. We sign an NDA first if your firm wants one.
- Work, review and handover. The work is done inside the client's QuickBooks Online file, reviewed by a Chartered Accountant and returned with a summary of adjustments.
Our guide to sending a client file to an offshore bookkeeping team lists what to prepare. More on our work for accounting firms is on the CPA firms page.
Frequently asked questions#
How many UK accounting firms outsource or offshore work? In the ICAEW's May 2024 survey of mid-tier firms (managing partners at firms with 11 to 249 partners, 40% response, more than 100 firms), half had already offshored or outsourced at least one service line. That covers mid-tier firms only.
When does Making Tax Digital for Income Tax apply? From 6 April 2026 for qualifying income over £50,000 (2024-25 tax year), from 6 April 2027 over £30,000 (2025-26) and from 6 April 2028 over £20,000 (2026-27), per GOV.UK.
Does ICAI have an agreement with the ICAEW that lets Indian Chartered Accountants practise in the UK? No. ICAI's arrangement with the ICAEW is a memorandum of understanding that applies to members only. ICAI's FAQ (updated 20 May 2026) says audit and practising rights are not included, and the route into the ICAEW needs limited exams.
What does a UK firm need before sending client data to India? India is not on the UK adequacy list, so a restricted transfer needs an appropriate safeguard such as the IDTA or the Addendum. Confirm the details with your own data protection adviser, and check your institute's guidance and your engagement terms.
Sources#
- Financial Reporting Council, Key Facts and Trends in the Accountancy Profession 2025 (23rd edition), 15 October 2025: link
- ICAEW, Audit & Beyond, "Trends in outsourcing and offshoring" (2024), citing "Evolution of mid-tier accountancy firms" (May 2024): link
- ACCA Accounting Business magazine, "Talent shortage remains a concern" (Accounting Talent Index 2025), September 2025: link
- HMRC / GOV.UK, "Find out if and when you need to use Making Tax Digital for Income Tax", read October 2026: link
- ICO, International transfers: a guide: link
- ICO, "Is the restricted transfer covered by adequacy regulations?": link
- ACCA, UK adequacy regulations (SMP guidance), February 2026: link
- ICAI, 77th Annual Report and Accounts for 2025-26 (Gazette of India notification dated 31 July 2026): link
- ICAI, FAQs on New Scheme of Education and Training, October 2024: link
- IFRS Foundation, IFRS Standards: Application around the world, Jurisdictional Profile: India: link
- ICAI, FAQs on MOUs/MRAs, updated 20 May 2026: link
- Reserve Bank of India, Survey on Computer Software and ITES Exports: 2024-25, press release, 4 November 2025: link
- Press Information Bureau, draft Legal Metrology (Indian Standard Time) Rules: link
- GOV.UK, "When do the clocks change" (2026 dates): link
- ICAI-hosted lecture material, "Overview of the Code of Ethics" (Second Schedule, Part I, Clause 1): link
