A Letter of Authority is a written document by which one person (the grantor or principal) formally authorises another person (the agent or authorised representative) to act on their behalf in relation to a specified organisation or in a defined matter. Under English law, a Letter of Authority operates on the principles of common law agency: the grantor confers authority on the agent, and the agent may exercise that authority on behalf of the grantor with the effect that the grantor is bound by the agent's acts within the scope of the authority granted.

Letters of Authority are widely used in England and Wales for a broad range of administrative and financial matters, including: authorising a solicitor or financial adviser to manage bank accounts; permitting a family member to deal with an insurance company or utility provider; allowing an employee or business partner to represent a company in dealings with a government body; and enabling a carer or trusted friend to access medical records or manage correspondence on behalf of a person who is temporarily incapacitated.

A Letter of Authority is distinct from a Lasting Power of Attorney (LPA) or an Ordinary Power of Attorney made under the Powers of Attorney Act 1971. These formal instruments are required where the principal lacks or may lack mental capacity, or where the authority involves the execution of deeds, property transfers, or significant financial transactions. A Letter of Authority is a more informal instrument appropriate for routine administrative matters where the full formality of a deed is not required.

Our UK Letter of Authority template is drafted in accordance with the principles of common law agency applicable in England and Wales. It clearly sets out the identity of the grantor and agent, the specific scope of the authority, any relevant account or reference details, the duration of the authority, revocation terms, and identity verification requirements.

A Letter of Authority is appropriate in a wide variety of everyday situations where you need someone else to deal with a third party on your behalf. You do not need a formal Power of Attorney for most routine administrative matters, and a well-drafted Letter of Authority will be accepted by most organisations in England and Wales.

Common situations where a Letter of Authority is required include: asking a family member to manage your bank account while you are travelling abroad or in hospital; authorising your solicitor or accountant to obtain information from HMRC or Companies House on your behalf; allowing an employee to deal with a supplier, customer, or regulatory body in your company's name; instructing a financial adviser to access your pension, investment, or insurance records; permitting a carer to communicate with your utility providers or local authority; and authorising a business partner to sign routine contracts or correspondence on your behalf.

A Letter of Authority is particularly useful where the scope of the delegation is limited and time-bound. Because the letter clearly defines what the agent can and cannot do, it reduces the risk of the agent exceeding their authority and helps the third party understand exactly what actions they are permitted to take. It also creates a clear paper trail for compliance and audit purposes.

However, a Letter of Authority is not a substitute for a Lasting Power of Attorney where the principal may lack mental capacity, nor is it appropriate for the execution of deeds, the transfer of land, or other transactions requiring the formality of a deed under the Law of Property Act 1925. In those circumstances, a formal Power of Attorney under the Powers of Attorney Act 1971 or an LPA under the Mental Capacity Act 2005 should be used instead.

A well-drafted Letter of Authority for use in England and Wales should include the following key elements to be effective and to protect all parties involved.

The identification of the grantor is fundamental. The letter must clearly identify who is granting the authority, including their full legal name, address, and contact details. If the grantor is a company, the registered name and company number should be included.

The identification of the authorised person must be equally precise. The agent's full legal name, address, and relationship to the grantor should all be stated. The third party will use this information to verify the agent's identity before acting on the authority.

The third party or addressee should be clearly identified where the letter is directed to a specific organisation. Where the letter is intended to be used with multiple organisations, it should be clearly headed as a general letter of authority.

The scope of authority is the most critical element. It must state precisely what the agent is authorised to do and, equally importantly, what they are not authorised to do. Vague or overly broad language risks the agent exceeding their authority, which could expose the grantor to liability or create disputes with the third party. The scope should be specific, and any limitations on the authority should be stated explicitly.

Account or reference details help the third party to identify the grantor's account or records and to verify that the letter relates to the correct matter. Including relevant account numbers, policy numbers, or case references reduces the risk of the authority being applied to the wrong account.

The duration specifies how long the authority is valid. A time-limited authority reduces the risk of the letter being misused after the purpose for which it was granted has been fulfilled. An ongoing authority should always include a clear revocation mechanism.

The revocation clause confirms the grantor's right to withdraw the authority at any time by written notice. Third parties who act in good faith before receiving notice of revocation are protected by the common law doctrine of apparent authority, so prompt notification is essential.

The identity verification requirement protects the third party by specifying what form of identification the agent must produce before the third party acts on the authority.