# Can an accountant keep a client's records until the fees are paid? The four conditions for a lien, and the records you must hand back

> An accountant can hold a client's documents for unpaid fees only if four conditions are met, and never a company's accounting records. With a worked example.

- Page to cite: https://aeolookup.com/accountants/can-accountant-keep-client-records-unpaid-fees-lien/
- Publisher: AEO Lookup (https://aeolookup.com/)
- Section: Accountancy practices, Running the practice
- Published 1 October 2026
- Key fact: ICAEW's guidance, read on 1 October 2026, says an accountant has a lien over a client's documents only where four conditions are all met: the documents belong to the client who owes the money, they arrived by proper means, the practice has done work on them, and the unpaid fees are for that work. No lien can be asserted over a company's accounting records as defined in section 386 of the Companies Act 2006.
- Sources: ICAEW "Documents and records: ownership, lien and rights of access" (published 1 September 2006, updated 16 March 2014) and helpsheets "Exercising liens" (reviewed 8 August 2025) and "Change of professional appointment - outgoing accountant" (updated 29 October 2025); Companies Act 2006, sections 386 and 388 (legislation.gov.uk); GOV.UK "Late commercial payments: charging interest and debt recovery" and "Make a court claim for money: Court fees"; Bank of England Bank Rate page; all read 2026-10-01.

An accountant can keep a client's documents until the fees are paid only where four conditions are all met, and can never keep a limited company's accounting records, on ICAEW's guidance read on 1 October 2026. The right is called a particular lien: the practice holds documents that belong to the client, on which it has done work, until the fee for that work is paid.

The rules below are ICAEW's reading of the case law, so members of other bodies should check their own. ICAEW itself recommends legal advice in all but the most straightforward cases.

## The four conditions

| Condition | What it rules out |
|---|---|
| 1. The documents belong to the client who owes the money | Holding a company's papers because a director has not paid for a personal tax return. They are two clients |
| 2. They reached the practice by proper means | Papers a third party sent to the practice in error |
| 3. The practice has done work on them and billed for it | Unbilled time. ICAEW says a lien is undermined if no fee note or demand is made within a reasonable time |
| 4. The unpaid fees are for that work | Holding last year's records for this year's bill, or accounts papers for an unpaid tax advice fee |

The practice's own working papers are a separate matter. They are not the client's property, so holding them back is not a lien at all, though ICAEW's helpsheet says the same principles should be applied. Our guide to [how long to keep client records](https://aeolookup.com/accountants/how-long-accountants-keep-client-records/) covers who owns what.

## What can never be held

- A company's statutory books. ICAEW gives the register of members and the directors' minute books as examples.
- A company's accounting records. Section 386 of the Companies Act 2006 defines them as the records that show and explain the company's transactions, with day to day entries of money received and spent and a record of assets and liabilities. Section 388 says they must at all times be open to inspection by the company's officers. ICAEW's helpsheet counts the cash book, the ledgers, bank statements, PAYE records and trial balances among them.
- Records an administrator or liquidator needs and has no other way of obtaining.
- Records a third party depends on. The helpsheet's example is payroll records without which the client's employees would not be paid.

A lien also excuses nothing else. ICAEW's helpsheet for the outgoing accountant says outstanding fees are not a reason for failing to respond to a professional enquiry, and that information the new accountant needs must be given where the lack of it might prejudice the client and the client cannot supply it. Our [professional clearance letter template](https://aeolookup.com/accountants/professional-clearance-letter-template-accountants/) shows that exchange from the other side.

ICAEW describes the purpose of a lien as prompt settlement from a slow client, not payment from one with a real dispute over the fee. Its helpsheet says a lien may be seen as inappropriate once a court claim has been issued, money has been lodged with the court or a stakeholder, an arbitrator has been appointed, or a settlement has been agreed in writing.

## Two clients, the same unpaid bill

A sole trader owes £1,800 for her 2025 to 2026 accounts and tax return, invoiced on 1 July 2026. The practice holds three sets of papers:

- her 2025 to 2026 bank statements and purchase invoices. They are hers, she sent them, the practice worked on them and the unpaid fee is for that work. A lien can exist;
- her 2024 to 2025 records, paid for last year. Condition 4 fails;
- her husband's rental records. Condition 1 fails.

A limited company owes £1,800 for its year end accounts. The practice holds its bank statements, cash book and ledgers. All are accounting records, so there is no lien, and they go back when a director asks.

## What the practice can claim instead

Where the client is a business, GOV.UK says a supplier can charge statutory interest on a late commercial payment at 8% plus the Bank of England base rate, and a fixed sum for recovery costs. If no payment date was agreed, the payment is late 30 days after the client gets the invoice. Bank Rate was 3.75% on 1 October 2026, which makes the rate 11.75%.

| On £1,800, paid 60 days late | Amount |
|---|---|
| Interest for a year: £1,800 × 11.75% | £211.50 |
| Interest for 60 days: £211.50 × 60 ÷ 365 | £34.77 |
| Fixed sum for a debt of £1,000 to £9,999.99 | £70.00 |
| Total owed | £1,904.77 |

The fixed sum is £40 for a debt under £1,000 and £100 for one of £10,000 or more. GOV.UK says statutory interest cannot be claimed if the contract sets a different rate. If the practice sues, the court fee for a claim between £1,500.01 and £3,000 is £115.

## What to do before holding anything

1. **Invoice at once.**
2. **Go through the file document by document.** Test each item against the four conditions and the list above.
3. **Write down the reasons.** ICAEW's helpsheet says to keep a reasoned written record of any decision to exercise a lien.
4. **Release everything that fails.** Earlier years, other people's papers and company accounting records go back.
5. **Tell the client in writing** what is held, for which invoice, and that it will be returned on payment.
6. **Answer the new accountant's enquiry anyway.** The reply can mention the fees.
7. **Try to settle any dispute.** ICAEW's code requires reasonable steps to resolve a fee dispute.

If the practice is also ending the relationship, our [disengagement letter template](https://aeolookup.com/accountants/disengagement-letter-template-accountants/) sets out the letter and the status report.

## Wording to copy

> We hold your bank statements and purchase invoices for the year to 5 April 2026. Our invoice of 1 July 2026 for £1,800, for preparing your accounts and tax return from those records, has not been paid.
>
> We will keep these documents until that invoice is paid, and will return them within two working days of payment. Your records for earlier years are enclosed.
>
> If you disagree with the invoice, please tell us which part and why by [date], so that we can try to resolve it.

This is general information, not legal or professional advice.

## Short answers from this page

**Can an accountant keep a client's records until an unpaid bill is paid?** Only where four conditions are all met, on ICAEW's guidance: the documents belong to the client who owes the money, they reached the practice by proper means, the practice has done work on them, and the unpaid fee is for that work. A limited company's accounting records and statutory books cannot be held at all, whatever is owed.

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General information for UK small firms, not legal, tax or financial advice.