SCHEDULE 1
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
PREPARATION OF STATUTORY FINANCIAL STATEMENTS IN COMPLIANCE WITH THE COMPANIES ACT 2006
1.0 Your responsibilities as directors
1.1 As directors of the company, you are responsible for ensuring the financial statements give a true and fair view and have been prepared in accordance with the Companies Act 2006 (the Act). As directors you must not approve the financial statements unless you are satisfied that they give a true and fair view of the assets, liabilities, financial position and profit or loss.
1.2 In preparing the financial statements, you are required to:
1.5 You are also responsible for deciding whether, in each financial year, the company meets the conditions for exemption from an audit, as set out in section 477 or 480 of the Companies Act 2006, and for deciding whether the exemption cannot be claimed that year.
1.6 You are responsible for ensuring that the company complies with laws and regulations that apply to its activities, and for preventing non-compliance and detecting any that occurs.
1.7 You have undertaken to make available to us, as and when required, all the company’s accounting records and related financial information, including minutes of management, shareholders’ and directors’ meetings, that we need to do our work.
1.8 If financial information is published, which includes a report by us or is otherwise connected to us, on the company’s website or by other electronic means, you must inform us of the electronic publication and get our consent before it occurs and ensure that it presents the financial information properly. We have the right to withhold consent to the electronic publication of the financial statements if they are to be published in an inappropriate manner.
2.0 Our responsibilities as accountants
2.1 You have asked us to help you prepare the financial statements in accordance with the requirements of the Companies Act 2006, to enable profits to be calculated to meet the requirements of current tax legislation and that provide sufficient and relevant information to complete a tax return. We will compile the financial statements for your approval based on the accounting records that we prepare based on the information and explanations that you give us.
2.2 We will make enquiries of management and undertake any procedures that we judge appropriate but are under no obligation to perform procedures that may be required for assurance engagements such as audits or reviews.
2.3 Our work will not be an audit of the financial statements in accordance with International Standards of Auditing (UK and Ireland). So we will not be able to provide any assurance that the accounting records or the financial statements are free from material misstatement, whether caused by fraud, other irregularities or error nor to identify weaknesses in internal controls.
2.4 We require you to either prepare your records in Xero or Freeagent and will advise you on whether your records are adequate for preparation of the financial statements and recommend improvements.
2.5 We have a professional duty to compile financial statements that conform with generally accepted accounting principles from the accounting records and information and explanations given to us. The accounting policies on which the financial statements have been compiled will be disclosed in an accounting policy. We will not compile financial statements where the accounting principles, or the accounting policies selected by management are inappropriate.
2.6 We also have a professional responsibility not to allow our name to be associated with financial statements which we believe may be misleading. Therefore, although we are not required to search for such matters, should we become aware, for any reason, that the financial statements may be misleading, we will discuss the matter with you with a view to agreeing appropriate adjustments and/or disclosures in the financial statements. In circumstances where adjustments and/or disclosures that we consider appropriate are not made or where we are not provided with appropriate information, and as a result we consider that the financial statements is misleading, we will withdraw from the engagement.
2.7 As part of our normal procedures we may ask you to confirm in writing any information or explanations given to us orally during our work.
SCHEDULE 2
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
CORPORATION TAX
1.0 Companies - recurring compliance work
1.1 We will use appropriate software to apply iXBRL tags to items in the accounts as we consider appropriate for the purposes of submission of the accounts to HMRC.
1.2 We will, to the extent we consider necessary, manually amend or apply tags where the software has not applied automatic tagging or where we consider any automatic tagging to have been inappropriate.
1.3 We will provide you with information regarding the tagging applied if required.
1.4 We will prepare the company’s corporate tax self assessment (CTSA) return. After obtaining the approval and signature of an authorised nominated director, we will submit it to HM Revenue & Customs (HMRC).
1.5 We will prepare the corporation tax computation and supporting schedules required for preparation of the company tax return from records, information and explanations provided to us by you.
1.6 We will tell you how much tax the company should pay and when. If appropriate, we will initiate repayment claims when tax has been overpaid. We will advise on the interest and penalty implications if corporation tax is paid late.
2.0 Ad hoc and advisory work
2.1 Where you have instructed us to do so, we will also provide such other taxation advisory and ad hoc services as may be agreed between from time to time. These may be the subject of a separate engagement letter, at our option. Where appropriate we will discuss and agree an additional fee for such work when it is commissioned by you. Examples of such work include:
Advising you when corporation tax is due on loans by the company to directors or shareholders or their associates, and calculating the payments due or the amount repayable when the loans are repaid; and
Dealing with any enquiry opened into the company’s tax return by HMRC;
Preparing any amended returns which may be required and corresponding with HMRC as necessary.
2.2 Where specialist advice is required on occasions we may need to seek this from or refer you to appropriate specialists.
3.0 Changes in the law
3.1 We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law or your circumstances.
3.2 We will accept no liability for losses arising from changes in the law or the interpretation thereof that are first published after the date on which the advice is given
4.0 Your responsibilities
4.1 The Directors, on behalf of the company, are legally responsible for:
(a) Ensuring that the CTSA return (including tagging) is correct and complete;
(b) Filing any returns by the due date; and
(c) Making payment of tax on time.
Failure to do this may lead to automatic penalties, surcharges and/or interest.
The signatory to the return cannot delegate this legal responsibility to others. The signatory agrees to check that returns we have prepared for the company are complete before he/she approves and signs them.
4.2 To enable us to carry out our work the Directors agree:
(a) To provide us with the records for the company.
(b) That all returns are to be made on the basis of full disclosure of all
sources of income, charges, allowances and capital transactions;
(c) To provide full information necessary for dealing with the company’s affairs: we will rely on the information and documents being true, correct and complete and will not audit the information or those documents;
(d) To authorise us to approach such third parties as may be appropriate for information that we consider necessary to deal with the company’s affairs;
(e) To provide us with information in sufficient time for the company’s CTSA return to be completed and submitted by the due date of 12 months following the end of the accounting period of the company.
(f) To provide us with information on advances or loans made to directors, shareholders or their associates during an accounting period and any repayments made or write offs authorised at the latest within three months of the end of the relevant accounting period.
4.3 The Directors will keep us informed of material changes in circumstances that could affect the tax liabilities of the company. If the Directors are unsure whether the change is material or not please let us know so that we can assess its significance.
4.4 You will forward to us HMRC statements of account, copies of notices of assessment, letters and other communications received from HMRC in time to enable us to deal with them as may be necessary within the statutory time limits. Although HMRC have the authority to communicate with us when form 64-8 has been signed and submitted it is essential that you let us have copies of any correspondence received because HMRC are not obliged to send us copies of all communications issued to you.
4.5 Our services as set out above are subject to the limitations on our liability set out in the engagement letter and in our standard terms and conditions. These are important provisions which you should read and consider carefully.
SCHEDULE 3
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
PERSONAL TAX
1.0 Recurring compliance work
1.1 We will prepare your self assessment tax returns together with any supplementary pages required from the information and explanations that you provide to us. After obtaining your approval and signature, we will submit your returns to HM Revenue & Customs (HMRC).
We will calculate your income tax, national insurance contributions (NIC) and any capital gains tax liabilities and tell you how much you should pay and when. We will advise on the interest, penalty and surcharge implications if tax or NIC is paid late. We will also check HMRC’s calculation of your tax and NIC liabilities and initiate repayment claims if tax or NIC has been overpaid. Other than as regards tax credits we will advise you as to possible tax return related claims and elections arising from information supplied by you. Where instructed by you, we will make such claims and elections in the form and manner required by HMRC.
We will review PAYE notices of coding provided to us and advise accordingly.
2.1 Where you have instructed us to do so, we will also provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These may be the subject of a separate engagement letter at our option. Where appropriate we will discuss and agree an additional fee for such work when it is commissioned by you. Examples of such work include:
Advising on ad hoc transactions, preparing additional supplementary pages to your tax return and calculating any related liabilities;
Dealing with any enquiry opened into your tax return by HMRC;
Preparing any amended returns which may be required and corresponding with HMRC as necessary; and
2.2. Where specialist advice is required on occasions we may need to seek this from or refer you to appropriate specialists.
3.0 Changes in the law
3.1 We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law or your circumstances.
3.2 We will accept no liability for losses arising from changes in the law or the interpretation thereof that are first published after the date on which the advice is given.
4.0 Your responsibilities
4.1 You are legally responsible for:
(a) Ensuring that your self assessment tax returns are correct and complete;
(b) Filing any returns by the due date; and
Making payment of tax on time.
Failure to do this may lead to automatic penalties, surcharges and/or interest.
Taxpayers who sign their returns cannot delegate this legal responsibility to others. You agree to check that returns that we have prepared for you are complete before you approve and sign them.
4.2 To enable us to carry out our work you agree:
(a) That all returns are to be made on the basis of full disclosure of all
sources of income, charges, allowances and capital transactions;
(b) To provide full information necessary for dealing with your affairs: we
will rely on the information and documents being true, correct and
complete and will not audit the information or those documents;
(c) To authorise us to approach such third parties as may be appropriate
for information that we consider necessary to deal with your affairs; and
(d) To provide us with information in sufficient time for your tax return to be completed and submitted by the due date, 31 January following the tax year. In order that we can do this, we need to receive all relevant information 3 months before the deadline. Where feasible we may agree to complete your return within a shorter period but may charge an additional fee of £60 for so doing.
4.2 You will keep us informed of material changes in your circumstances that could affect your tax liability. If you are unsure whether the change is material or not please let us know so that we can assess its significance.
4.3 You will forward to us HMRC statements of account, copies of notices of assessment, letters and other communications received from HMRC in time to enable us to deal with them as may be necessary within the statutory time limits. Although HMRC have the authority to communicate with us when form 64-8 has been signed and submitted it is essential that you let us have copies of any correspondence received because HMRC are not obliged to send us copies of all communications issued to you.
4.4 Our services as set out above are subject to the limitations on our liability set out in the engagement letter and in our standard terms and conditions of Business. These are important provisions which you should read and consider carefully.
SCHEDULE 4
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
CORPORATE SERVICES
1.0 Company secretarial
1.1 We have agreed to act as your agent, and to:
SCHEDULE 5
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
PAYROLL SERVICES
1.0 Recurring compliance work
1.1 We will prepare your UK payroll for each payroll period to meet UK employment tax requirements, specifically:
Calculating the pay as you earn (PAYE) deductions;
Calculating the employees’ National Insurance Contributions (NIC) deductions;
Calculating the employer’s NIC liabilities;
Calculating statutory payments, for example, Statutory Sick Pay and/or Statutory Maternity Pay; and
Calculating other statutory and non statutory deductions
1.2. We will prepare and send to you the following documents for each payroll period at or before the time of payment:
Payroll summary report showing the reconciliation from gross to net for each employee and all relevant payroll totals;
A payslip for each employee unless not required;
A report showing your PAYE and NIC liability and due date for payment.
2.0 Ad hoc and advisory work
2.1 Where you have instructed us to do so, we will also provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These may be the subject of a separate engagement letter, at our option. Where appropriate we will discuss and agree an additional fee for such work when it is commissioned by you. Examples of such work include:
Dealing with any enquiry by HMRC into the payroll returns; and
Preparing any amended returns which may be required and corresponding with HMRC as necessary.
2.2 Where specialist advice is required on occasions we may need to seek this from or refer you to appropriate specialists.
3.0 Changes in the law
3.1 We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law or your circumstances.
3.2 We will accept no liability for losses arising from changes in the law or the interpretation thereof that are first published after the date on which the advice is given
4.0 Your responsibilities
4.1 You are legally responsible for:
a) Ensuring that your payroll returns are correct and complete and for sending us the monthly payroll on or before the salary payment dates to avoid late filing penalties;
b) Filing any returns by the due date; and
c) Making payment of tax and NIC on time.
Failure to do this may lead to automatic penalties, surcharges and/or interest.
4.2 To enable us to carry out our work you agree:
(a) That all returns are to be made on the basis of full disclosure;
(b) To provide full information necessary for dealing with your payroll affairs: we will rely on the information and documents being true, correct and complete and will not audit the information or those documents;
(c) To agree with us the names of the persons authorised by you to
notify us of changes in employees and in rates of pay. We will
process the changes only if notified by that/those individuals;
(d) To advise us in writing of changes of payroll pay dates;
(e) To notify us at least 5 working days prior to the payroll date of all transactions or events which may need to be reflected in the payroll for the period, including details of:
all new employees and details of their remuneration packages;
all leavers and details of termination arrangements;
all changes to remuneration packages;
all pension scheme changes; and
any changes to the employees’ bank accounts;
(f) You will keep us informed of changes in circumstances that could affect the payroll. If you are unsure whether the change is material or not please let us know so that we can assess its significance. and
(g) To authorise us to approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs.
4.3 If the information required to complete the payroll services set out above is received less than 5 days before the payroll date we will still endeavour to process the payroll to meet the agreed payroll date but we will not be liable for any costs or other losses arising if the payroll is late in these circumstances. We may charge an additional fee for work carried out in a shorter time period.
4.4 Our services as set out above are subject to the limitations on our liability set out in the engagement letter and in our standard terms and conditions. These are important provisions which you should read and consider carefully.
SCHEDULE 6
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
BENEFITS IN KIND
Benefits-in-kind returns (forms P11D and P9D and declaration P11D(b)) and Class 1A National Insurance Contributions
1.0 Recurring compliance work
1.1 We will prepare forms P11D and P9D as may be required for each employee including directors based on the accounts, information and explanations provided to us on your behalf.
1.2 We will submit the forms P11D and P9D with the form P11D(b) after the form P11D(b) has been signed by you.
1.3 We will prepare and send to you the P11D information for you to forward to your employees and directors by the statutory due date.
1.4. We will calculate your Class 1A NIC liability on the benefits returned in forms P11D that you are obliged to pay HMRC by the due date and send payment instructions to you.
2.0 Ad hoc and advisory work
2.1 Where you have instructed us to do so, we will also provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These may be the subject of a separate engagement letter, at our option.
2.2 Where specialist advice is required we may need to seek this from or refer you to appropriate specialists.
3.0 Changes in the law
3.1 We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law or your circumstances.
3.2 We will accept no liability for losses arising from changes in the law or the interpretation thereof that are first published after the date on which the advice is given
4.0 Your responsibilities
4.1 You are legally responsible for:
a) Ensuring that your declaration on form P11D(b) is true to the best of your knowledge and belief and therefore that the entries on the related forms P11D and P9D are correct and complete;
b) Filing any returns by the due date after the end of the tax year; and
c) Making payment of Class 1A NIC on time.
Failure to do this may lead to automatic interest, penalties and/or surcharges.
4.2 The signatory to the return cannot delegate this legal responsibility to others. The signatory agrees to check that the forms that we have prepared for you are complete before he/she approves and signs them.
4.3 To enable us to carry out our work you agree:
(a) That all returns are to be made on the basis of full disclosure;
(b) To provide full information necessary for dealing with your benefits-in-kind returns: we will rely on the information and documents being true, correct and complete and will not audit the information or those documents;
(c) To notify us of all transactions or events which may need to be reflected in the forms P11D and P9D for the period, including details of all employees during the year and details of their remuneration packages; and
(d) To authorise us to approach such third parties as may be appropriate that we consider necessary to deal with completing the benefits-in-kind returns.
4.4 If the information required to complete the benefits-in-kind returns set out above is received late we will still endeavour to process the information onto the benefits-in-kind returns to meet the submission date but we will not be liable for any costs or other losses arising if submission is late in these circumstances. We may charge an additional fee in such circumstances.
4.5 Our services as set out above are subject to the limitations on our liability set out in the engagement letter and in our standard terms and conditions. These are important provisions which you should read and consider carefully.
SCHEDULE 7
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
VAT
1.1 Recurring compliance work
We will prepare your quarterly VAT returns on the basis of the information and explanations supplied by you.
Based on the information that you provide to us we will tell you how much you should pay and when. If appropriate we will initiate repayment claims where tax has been overpaid. We will advise on the interest and penalty implications if VAT is paid late.
Where appropriate we will calculate the partial exemption annual adjustment.
Where appropriate we will calculate the annual Capital Goods Scheme adjustment.
We will forward to you the completed return calculations for you to review, before you approve the VAT return for onward transmission by us to HMRC.
2.0 Ad hoc and advisory services
2.1 Where you have instructed us to do so, we will also provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These may be the subject of a separate engagement letter, at our option. Where appropriate we will discuss and agree an additional fee for this work when it is commissioned by you. Examples of such work include:
Dealing with all communications relating to your VAT returns addressed to us by HMRC or passed to us by you;
Making recommendations to you about the use of cash accounting, annual accounting, flat rate and other suitable methods of accounting for VAT; and
Providing you with advice on VAT as and when requested. Where the advice is provided in writing, the information provided and the query raised will be set out with our response to you
2.2 Where specialist advice is required in certain areas we may need to seek this from or refer you to appropriate specialists
3.0 Changes in the law
3.1 We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law or your circumstances.
3.2 We will accept no liability for losses arising from changes in the law or the interpretation thereof that are first published on or after the date on which the advice is given.
4.0 Your responsibilities
4.1 You are legally responsible for:
(a) Ensuring that your returns are correct and complete;
(b) Filing any returns by the due date; and
(c) Making payment of tax on time.
Failure to do this may lead to automatic penalties, surcharges and/or interest.
The signatory to the return cannot delegate this legal responsibility to others. The signatory agrees to check that returns we have prepared for you are complete before he/she approves and signs them.
4.2 To enable us to carry out our work you agree:
(a) That all returns are to be made on the basis of full disclosure;
(b) That you are responsible for ensuring that the information provided is, to the best of your knowledge, accurate and complete. The VAT returns are prepared solely on the basis of the information provided by you and we accept no responsibility for any VAT liabilities arising due to inaccuracies or omissions in the information you provide which may lead to a misdeclaration on which penalties and interest may arise;
(c) That we can approach such third parties as may be appropriate for information we consider necessary to deal with the VAT returns; and
(d) To provide us with all the records relevant to the preparation of your quarterly VAT returns as soon as possible after the return period ends. We would ordinarily need the information 5 working days after the end of each quarter to complete our work. If the records are provided later or are incomplete or unclear thereby delaying the preparation and submission of the VAT return, we accept no responsibility for any “default surcharge” penalty that may arise. Where feasible we may agree to complete your return within a shorter period but may charge an additional fee of £60 per hour for so doing.
4.3 You will keep us informed of material changes in circumstances that could affect your VAT obligations. If you are unsure whether the change is material or not please let us know so that we can assess its significance.
4.4 You will forward to us HMRC statements of account, copies of notices of assessment, letters and other communications received from HMRC in time to enable us to deal with them as may be necessary within the statutory time limits. Although HMRC have the authority to communicate with us when form 64-8 has been signed and submitted it is essential that you let us have copies of any correspondence received because HMRC are not obliged to send us copies of all communications issued to you.
4.5 You are responsible for bringing to our attention any errors, omissions or inaccuracies in your VAT returns which you become aware of after the returns have been submitted in order that we may assist you to make a voluntary disclosure.
4.7 Our services as set out above are subject to the limitations on our liability set out in the engagement letter and in our standard terms and conditions. These are important provisions which you should read and consider carefully.
SCHEDULE 8
This schedule should be read in conjunction with the engagement letter and the standard terms and conditions.
PERSONAL TAX – SOLE TRADERS AND PROPERTY INCOME
MAKING TAX DIGITAL FOR INCOME TAX (MTD for income tax)
1.0 Initial sign up
1.1 You are responsible for signing up for Making Tax Digital for income tax (MTD for income Tax). If you wish us to assist you in signing up with HMRC, we will be pleased to assist you in the MTD for income tax signing up process. You should notify us of your instruction to assist you in your MTD for income tax sign up in good time before the first quarterly return is due. We will not be responsible if you fail to notify us in time and you incur a penalty as a result. By signing up, you are agreeing to HMRC’s terms of participation, which include deadlines and associated penalties.
2.0 Recurring compliance work – accounts
2.1 We will prepare the annual business accounts in accordance with generally accepted accounting standards from the books, accounting records and other information and explanations provided to us by you and/or by others on your behalf.
2.2 Where receipts for your property business are less than £150,000 for the tax year, we will prepare property accounts on the default cash basis unless we agree with you that it is appropriate to elect to use the accruals basis and the accounts are to be prepared on that basis. We will then deal with the election on completion of your tax return.
2.3 You are responsible for the bookkeeping. We will make adjustments to your bookkeeping records insofar as they are incomplete when preparing the annual accounts. These will be from the accounting information and records you supply.
2.4 We will not be carrying out any audit work as part of this assignment and accordingly will not verify the assets and liabilities of the business, nor the items of expenditure and income. To carry out an audit would entail additional work to comply with International Standards on Auditing, so that we could report on the truth and fairness of the financial statements. Accordingly, we shall not seek any independent evidence to support the entries in the accounting records, or to prove the existence, ownership or valuation of assets or completeness of income, liabilities or disclosure in the accounts. Nor shall we assess the reasonableness of any estimates or judgements made in the preparation of the accounts. Consequently, our work will not provide any assurance that the accounting records are free from material misstatement, irregularities or error. We would also like to emphasise that we cannot undertake to discover any shortcomings in your systems or irregularities on the part of your employees.
2.5 We have a professional duty to compile accounts that conform with generally accepted accounting principles. Where we identify that the accounts do not conform with generally accepted accounting principles or standards, we will inform you and suggest amendments be put through the accounts before being finalised. We have a professional responsibility not to allow our name to be associated with accounts that may be misleading. In extreme cases, where this matter cannot be resolved, we will withdraw from the engagement and notify you in writing of the reasons. Should you instruct us to carry out any alternative report it will be necessary for us to issue a separate letter of engagement. To ensure that anyone reading the accounts is aware that we have not carried out an audit, we will attach to the accounts a report stating this fact.
2.6 You are the intended user of the report and the report will be addressed to you.
2.7 Once we have issued our report, we have no further responsibility in relation to the accounts for that financial year.
2.8 There are no third parties that we have agreed should be entitled to rely on the work done pursuant to this engagement letter.
3.0 Recurring compliance work – tax
3.1 You will keep records to meet the digital record-keeping requirements of MTD for income tax. When you provide you records to use we will take this as confirmation that the data provided to us is complete and accurate.
3.2 We will require your records no later than 14 days after the quarter end.
3.3 We will submit your MTD for income tax quarterly updates on a quarterly basis.
3.4 We will prepare your year-end tax returns from the submitted quarterly updates and information and explanations that you, or a third party, provide to us. After obtaining your approval, we will submit your tax returns to HMRC.
3.5 We will calculate your income tax, high-income child benefit charge, national insurance contributions (NIC) and any capital gains tax liabilities as included on your tax return, and tell you how much you should pay and when. Where instructed by you, we will advise on the interest and penalty implications if tax or NIC is paid late. We will also check HMRC’s calculation of your tax and NIC liabilities, and initiate repayment claims if tax or NIC has been overpaid.
3.5 Other than Universal Credit (see below), we will advise you as to possible tax return-related claims and elections arising from information supplied by you. Where instructed by you, we will make such claims and elections in the form and manner required by HMRC.
3.6 We are not responsible for considering or applying for any of the exemptions from MTD for income tax. However, if you feel that you are eligible for exemption, please let us know. We are happy to discuss this and may correspond with HMRC on your behalf if needed, or we can guide you on whom you should contact for this.
3.7 We will advise you of any relaxations applicable in relation to the digital records. Where the requirements are impossible, impractical or unduly onerous we will seek to reach agreement with HMRC on a specific relaxation, but this may be subject to an additional fee.
3.8 We will review PAYE notices of coding provided to us by you and advise accordingly. Note that HMRC no longer sends copies of notices of coding to agents.
3.9 Ad hoc queries by way of telephone and email enquiries are not routine compliance and may result in additional fees. As indicated below, where appropriate we will aim to discuss and agree additional fees, but it may not always be possible to agree these in advance and we reserve the right to charge you an additional fee for these queries.
4.0 Ad hoc and advisory work
4.1 Where you have instructed us to do so, we will provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These services will be subject to the terms of this engagement letter and standard terms and conditions of business unless we decide to issue a separate engagement letter. An additional fee may be charged for these services. Examples of such work include:
• advising on the in-year Capital Gains Tax (CGT) reporting requirements on disposals of property, and preparing the in-year return and calculating the CGT due where required [note that this work will always result in additional fees]. We will require you to provide information as early as possible in advance of exchange of contracts in order to provide advice on the tax implications, reporting requirements and to quantify the tax bill;
• advising on ad hoc transactions (for example, pre-sale advice on the sale of assets) and queries (including telephone conversations), preparing and submitting information in the relevant format to HMRC, and calculating any related tax liabilities;
• advising on double tax relief if appropriate;
• dealing with any compliance check or enquiry opened into your tax return or tax affairs by HMRC;
• preparing any amended returns that may be required and corresponding with HMRC as necessary; and
• advising on the rules relating to and assisting with VAT registration and deregistration [or equivalent non-UK taxes].
4.2 Where specialist advice is required, on occasion we may need to seek this from or refer you to appropriate specialists. We will only do this when instructed by you.
5.0 Universal Credit
5.1 If we agree to advise you on Universal Credit, we will issue a separate letter or schedule to cover this area. Universal Credit is, in effect, a social security benefit. Your entitlement or otherwise will depend not only on your own circumstances but also those of your household, and we would require all relevant information to advise in this regard.
6.0 Changes in the law or practice or in public policy
6.1 We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law, in practice, in public policy, or in your circumstances.
6.2 We will accept no liability for losses arising from changes in the law, in practice, or in public policy that are first published after the date on which the advice is given.
7.0 Your responsibilities
7.1 You are required to prepare accounts (financial statements) for each financial year, which give a true and fair view of the state of affairs of the business and of its profit or loss for that period. In preparing those accounts you should:
(a) select suitable accounting policies and then apply them consistently
(b) make judgements and estimates that are reasonable and prudent.
7.2 It is your responsibility to keep proper accounting records that disclose with reasonable accuracy at any particular time the financial position of the business. It is also your responsibility to safeguard the assets and to take reasonable steps for the prevention of and detection of fraud and other irregularities with an appropriate system of internal controls.
7.3 You are also responsible for making available to us, as and when required, all accounting records and all other relevant records and related information.
7.4 You will also be responsible for:
(a) maintaining records of all receipts and payments of cash;
(b) maintaining records of invoices issued and received;
(c) reconciling balances [monthly/quarterly] with the bank statements;
(d) preparing a record of business mileage undertaken in the year;
(e) preparing a record of hours per month worked at home if you wish to claim for business use of your home;
(f) preparing details of any loan interest paid;
(g) preparing a record of capital introduced; and
(h) preparing details of the following at the year-end: stocks and work in progress, fixed assets, amounts owing to creditors, amounts owing by customers, and accruals and prepayments.]
7.5 You are responsible for retaining the following information:
(a) sales invoices
(b) purchase invoices
(c) bank statements
(d) details of bank and cash payments
(e) details of bank and cash receipts
(f) work-in-progress details
(g) access to your accounting records.
We have also agreed that you will provide the following:
(a) a record of the amounts owed to the business
(b) a record of amounts owed by the business
(c) a list of accruals
(d) a list of prepayments
(e) private-use adjustments.
7.6 You will be responsible for keeping records in a format that meets the digital record-keeping requirements of MTD for income tax. You must ensure that the data provided to us is complete and accurate.
7.7 You must provide us with confirmation that your digital records meet HMRC’s digital record-keeping requirements.
7.8 You are legally responsible for:
(a) ensuring that your year-end tax returns are correct and complete and in an appropriate digital format, and capture the appropriate level of data;
(b) ensuring that your record-keeping system is compliant with the new requirements for the digital recording and transfer of data;
(c) filing any quarterly updates and year-end tax returns by the due date; and
(d) paying tax on time.
Failure to do this may lead to penalties and/or interest.
7.9 Taxpayers who approve their quarterly updates and year-end tax returns cannot delegate this legal responsibility to others. You agree to check that returns that we have prepared for you are complete before you approve them.
7.10 To enable us to carry out our work, you agree:
(a) that all quarterly updates are to be made on the basis of full disclosure of all sources of income and charges, and that all year-end tax returns are to be made on the basis of full disclosure of all sources of income, charges, allowances and capital transactions;
and that all year-end tax returns are to be made on the basis of full disclosure of all sources of income, charges, allowances and capital transactions;
(b) to provide all information necessary for dealing with your affairs, including the accounts information outlined above; we will rely on the information and documents being true, correct and complete, and will not audit the information or those documents;
(c) to provide full details of all UK residential property disposals, including associated costs/valuations prior to disposal. Where you consider that you will be non-UK resident in the tax year of disposal, full details of all UK property disposals (residential and non-residential) and disposals of shares in UK property-rich companies or UK property-rich collective-investment vehicles, or such other entities, must be advised prior to exchange of contracts or agreement to transfer shares or units. If information is received after this, we cannot guarantee that we can provide advice on the amount of capital gains tax due or submit an in-year return within 60 days after the completion date of the disposal;
(d) to authorise us to approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs;
(e) to provide us with all the records relevant to the preparation of your quarterly updates as soon as possible after the period ends. We would ordinarily need a minimum of 14 days before submission to complete our work. If the records are provided later or are incomplete or unclear, thereby delaying the preparation and submission of the filing, we accept no responsibility for any penalty that may arise;
(f) where a quarterly or annual submission obligation is missed, this may incur a penalty point according to HMRC’s points-based system for late filing. Once the points threshold has been reached, a financial penalty may apply. Should you wish us to assist in reviewing and appealing the penalty point or financial penalty, you should notify us of your instruction and confirm the grounds for the appeal a minimum of 14 days before the appeal deadline. Where instructed by you, we will make an appeal in the form and manner required by HMRC;
(g) to provide us with information in sufficient time for your tax return to be completed and submitted by the 31 January following the end of the tax year. In order that we can do this, we need to receive all relevant information by 1 December. Where feasible, we may agree to complete your return within a shorter period but may charge an additional fee of £100+VAT for so doing.
7.11 You will keep us informed of material changes in your circumstances that could affect your tax liability. If you are unsure whether the change is material or not, please let us know so that we can assess its significance.
7.12 Where you wish us to deal with HMRC communications, you will forward to us all communications received from HMRC such as HMRC statements of account, copies of notices of assessment, tax codes and letters. These must be provided in time to enable us to deal with them as may be necessary within the statutory time limits. It is essential that you let us have copies of any correspondence received because HMRC is not obliged to send us copies of all communications issued to you.
7.13 Our services as detailed above are subject to the limitations on our liability set out in the engagement letter and our standard terms and conditions of business. These are important provisions that you should read and consider carefully.
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
PREPARATION OF STATUTORY FINANCIAL STATEMENTS IN COMPLIANCE WITH THE COMPANIES ACT 2006
1.0 Your responsibilities as directors
1.1 As directors of the company, you are responsible for ensuring the financial statements give a true and fair view and have been prepared in accordance with the Companies Act 2006 (the Act). As directors you must not approve the financial statements unless you are satisfied that they give a true and fair view of the assets, liabilities, financial position and profit or loss.
1.2 In preparing the financial statements, you are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
- You are responsible for keeping adequate accounting records that set out with reasonable accuracy at any time the company’s financial position, and for ensuring that the financial statements comply with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice (UKGAAP)) and with the Companies Act 2006 and give a true and fair view. You will reconcile the bank using a suitable bookkeeping package or excel.
- You are also responsible for safeguarding the assets of the company and hence for taking reasonable steps to prevent and detect fraud and other irregularities.
1.5 You are also responsible for deciding whether, in each financial year, the company meets the conditions for exemption from an audit, as set out in section 477 or 480 of the Companies Act 2006, and for deciding whether the exemption cannot be claimed that year.
1.6 You are responsible for ensuring that the company complies with laws and regulations that apply to its activities, and for preventing non-compliance and detecting any that occurs.
1.7 You have undertaken to make available to us, as and when required, all the company’s accounting records and related financial information, including minutes of management, shareholders’ and directors’ meetings, that we need to do our work.
1.8 If financial information is published, which includes a report by us or is otherwise connected to us, on the company’s website or by other electronic means, you must inform us of the electronic publication and get our consent before it occurs and ensure that it presents the financial information properly. We have the right to withhold consent to the electronic publication of the financial statements if they are to be published in an inappropriate manner.
2.0 Our responsibilities as accountants
2.1 You have asked us to help you prepare the financial statements in accordance with the requirements of the Companies Act 2006, to enable profits to be calculated to meet the requirements of current tax legislation and that provide sufficient and relevant information to complete a tax return. We will compile the financial statements for your approval based on the accounting records that we prepare based on the information and explanations that you give us.
2.2 We will make enquiries of management and undertake any procedures that we judge appropriate but are under no obligation to perform procedures that may be required for assurance engagements such as audits or reviews.
2.3 Our work will not be an audit of the financial statements in accordance with International Standards of Auditing (UK and Ireland). So we will not be able to provide any assurance that the accounting records or the financial statements are free from material misstatement, whether caused by fraud, other irregularities or error nor to identify weaknesses in internal controls.
2.4 We require you to either prepare your records in Xero or Freeagent and will advise you on whether your records are adequate for preparation of the financial statements and recommend improvements.
2.5 We have a professional duty to compile financial statements that conform with generally accepted accounting principles from the accounting records and information and explanations given to us. The accounting policies on which the financial statements have been compiled will be disclosed in an accounting policy. We will not compile financial statements where the accounting principles, or the accounting policies selected by management are inappropriate.
2.6 We also have a professional responsibility not to allow our name to be associated with financial statements which we believe may be misleading. Therefore, although we are not required to search for such matters, should we become aware, for any reason, that the financial statements may be misleading, we will discuss the matter with you with a view to agreeing appropriate adjustments and/or disclosures in the financial statements. In circumstances where adjustments and/or disclosures that we consider appropriate are not made or where we are not provided with appropriate information, and as a result we consider that the financial statements is misleading, we will withdraw from the engagement.
2.7 As part of our normal procedures we may ask you to confirm in writing any information or explanations given to us orally during our work.
SCHEDULE 2
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
CORPORATION TAX
1.0 Companies - recurring compliance work
1.1 We will use appropriate software to apply iXBRL tags to items in the accounts as we consider appropriate for the purposes of submission of the accounts to HMRC.
1.2 We will, to the extent we consider necessary, manually amend or apply tags where the software has not applied automatic tagging or where we consider any automatic tagging to have been inappropriate.
1.3 We will provide you with information regarding the tagging applied if required.
1.4 We will prepare the company’s corporate tax self assessment (CTSA) return. After obtaining the approval and signature of an authorised nominated director, we will submit it to HM Revenue & Customs (HMRC).
1.5 We will prepare the corporation tax computation and supporting schedules required for preparation of the company tax return from records, information and explanations provided to us by you.
1.6 We will tell you how much tax the company should pay and when. If appropriate, we will initiate repayment claims when tax has been overpaid. We will advise on the interest and penalty implications if corporation tax is paid late.
2.0 Ad hoc and advisory work
2.1 Where you have instructed us to do so, we will also provide such other taxation advisory and ad hoc services as may be agreed between from time to time. These may be the subject of a separate engagement letter, at our option. Where appropriate we will discuss and agree an additional fee for such work when it is commissioned by you. Examples of such work include:
Advising you when corporation tax is due on loans by the company to directors or shareholders or their associates, and calculating the payments due or the amount repayable when the loans are repaid; and
Dealing with any enquiry opened into the company’s tax return by HMRC;
Preparing any amended returns which may be required and corresponding with HMRC as necessary.
2.2 Where specialist advice is required on occasions we may need to seek this from or refer you to appropriate specialists.
3.0 Changes in the law
3.1 We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law or your circumstances.
3.2 We will accept no liability for losses arising from changes in the law or the interpretation thereof that are first published after the date on which the advice is given
4.0 Your responsibilities
4.1 The Directors, on behalf of the company, are legally responsible for:
(a) Ensuring that the CTSA return (including tagging) is correct and complete;
(b) Filing any returns by the due date; and
(c) Making payment of tax on time.
Failure to do this may lead to automatic penalties, surcharges and/or interest.
The signatory to the return cannot delegate this legal responsibility to others. The signatory agrees to check that returns we have prepared for the company are complete before he/she approves and signs them.
4.2 To enable us to carry out our work the Directors agree:
(a) To provide us with the records for the company.
(b) That all returns are to be made on the basis of full disclosure of all
sources of income, charges, allowances and capital transactions;
(c) To provide full information necessary for dealing with the company’s affairs: we will rely on the information and documents being true, correct and complete and will not audit the information or those documents;
(d) To authorise us to approach such third parties as may be appropriate for information that we consider necessary to deal with the company’s affairs;
(e) To provide us with information in sufficient time for the company’s CTSA return to be completed and submitted by the due date of 12 months following the end of the accounting period of the company.
(f) To provide us with information on advances or loans made to directors, shareholders or their associates during an accounting period and any repayments made or write offs authorised at the latest within three months of the end of the relevant accounting period.
4.3 The Directors will keep us informed of material changes in circumstances that could affect the tax liabilities of the company. If the Directors are unsure whether the change is material or not please let us know so that we can assess its significance.
4.4 You will forward to us HMRC statements of account, copies of notices of assessment, letters and other communications received from HMRC in time to enable us to deal with them as may be necessary within the statutory time limits. Although HMRC have the authority to communicate with us when form 64-8 has been signed and submitted it is essential that you let us have copies of any correspondence received because HMRC are not obliged to send us copies of all communications issued to you.
4.5 Our services as set out above are subject to the limitations on our liability set out in the engagement letter and in our standard terms and conditions. These are important provisions which you should read and consider carefully.
SCHEDULE 3
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
PERSONAL TAX
1.0 Recurring compliance work
1.1 We will prepare your self assessment tax returns together with any supplementary pages required from the information and explanations that you provide to us. After obtaining your approval and signature, we will submit your returns to HM Revenue & Customs (HMRC).
We will calculate your income tax, national insurance contributions (NIC) and any capital gains tax liabilities and tell you how much you should pay and when. We will advise on the interest, penalty and surcharge implications if tax or NIC is paid late. We will also check HMRC’s calculation of your tax and NIC liabilities and initiate repayment claims if tax or NIC has been overpaid. Other than as regards tax credits we will advise you as to possible tax return related claims and elections arising from information supplied by you. Where instructed by you, we will make such claims and elections in the form and manner required by HMRC.
We will review PAYE notices of coding provided to us and advise accordingly.
- Ad hoc and advisory work
2.1 Where you have instructed us to do so, we will also provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These may be the subject of a separate engagement letter at our option. Where appropriate we will discuss and agree an additional fee for such work when it is commissioned by you. Examples of such work include:
Advising on ad hoc transactions, preparing additional supplementary pages to your tax return and calculating any related liabilities;
Dealing with any enquiry opened into your tax return by HMRC;
Preparing any amended returns which may be required and corresponding with HMRC as necessary; and
2.2. Where specialist advice is required on occasions we may need to seek this from or refer you to appropriate specialists.
3.0 Changes in the law
3.1 We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law or your circumstances.
3.2 We will accept no liability for losses arising from changes in the law or the interpretation thereof that are first published after the date on which the advice is given.
4.0 Your responsibilities
4.1 You are legally responsible for:
(a) Ensuring that your self assessment tax returns are correct and complete;
(b) Filing any returns by the due date; and
Making payment of tax on time.
Failure to do this may lead to automatic penalties, surcharges and/or interest.
Taxpayers who sign their returns cannot delegate this legal responsibility to others. You agree to check that returns that we have prepared for you are complete before you approve and sign them.
4.2 To enable us to carry out our work you agree:
(a) That all returns are to be made on the basis of full disclosure of all
sources of income, charges, allowances and capital transactions;
(b) To provide full information necessary for dealing with your affairs: we
will rely on the information and documents being true, correct and
complete and will not audit the information or those documents;
(c) To authorise us to approach such third parties as may be appropriate
for information that we consider necessary to deal with your affairs; and
(d) To provide us with information in sufficient time for your tax return to be completed and submitted by the due date, 31 January following the tax year. In order that we can do this, we need to receive all relevant information 3 months before the deadline. Where feasible we may agree to complete your return within a shorter period but may charge an additional fee of £60 for so doing.
4.2 You will keep us informed of material changes in your circumstances that could affect your tax liability. If you are unsure whether the change is material or not please let us know so that we can assess its significance.
4.3 You will forward to us HMRC statements of account, copies of notices of assessment, letters and other communications received from HMRC in time to enable us to deal with them as may be necessary within the statutory time limits. Although HMRC have the authority to communicate with us when form 64-8 has been signed and submitted it is essential that you let us have copies of any correspondence received because HMRC are not obliged to send us copies of all communications issued to you.
4.4 Our services as set out above are subject to the limitations on our liability set out in the engagement letter and in our standard terms and conditions of Business. These are important provisions which you should read and consider carefully.
SCHEDULE 4
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
CORPORATE SERVICES
1.0 Company secretarial
1.1 We have agreed to act as your agent, and to:
- submit the financial statements to the Registrar of Companies;
- complete and submit the company’s annual confirmation statement;
- Additional company secretarial services such as a change in Director or accounting period, issuing new shares, dividend documentation, board minutes and Companies House filings will be charged at hourly rates.
SCHEDULE 5
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
PAYROLL SERVICES
1.0 Recurring compliance work
1.1 We will prepare your UK payroll for each payroll period to meet UK employment tax requirements, specifically:
Calculating the pay as you earn (PAYE) deductions;
Calculating the employees’ National Insurance Contributions (NIC) deductions;
Calculating the employer’s NIC liabilities;
Calculating statutory payments, for example, Statutory Sick Pay and/or Statutory Maternity Pay; and
Calculating other statutory and non statutory deductions
1.2. We will prepare and send to you the following documents for each payroll period at or before the time of payment:
Payroll summary report showing the reconciliation from gross to net for each employee and all relevant payroll totals;
A payslip for each employee unless not required;
A report showing your PAYE and NIC liability and due date for payment.
2.0 Ad hoc and advisory work
2.1 Where you have instructed us to do so, we will also provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These may be the subject of a separate engagement letter, at our option. Where appropriate we will discuss and agree an additional fee for such work when it is commissioned by you. Examples of such work include:
Dealing with any enquiry by HMRC into the payroll returns; and
Preparing any amended returns which may be required and corresponding with HMRC as necessary.
2.2 Where specialist advice is required on occasions we may need to seek this from or refer you to appropriate specialists.
3.0 Changes in the law
3.1 We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law or your circumstances.
3.2 We will accept no liability for losses arising from changes in the law or the interpretation thereof that are first published after the date on which the advice is given
4.0 Your responsibilities
4.1 You are legally responsible for:
a) Ensuring that your payroll returns are correct and complete and for sending us the monthly payroll on or before the salary payment dates to avoid late filing penalties;
b) Filing any returns by the due date; and
c) Making payment of tax and NIC on time.
Failure to do this may lead to automatic penalties, surcharges and/or interest.
4.2 To enable us to carry out our work you agree:
(a) That all returns are to be made on the basis of full disclosure;
(b) To provide full information necessary for dealing with your payroll affairs: we will rely on the information and documents being true, correct and complete and will not audit the information or those documents;
(c) To agree with us the names of the persons authorised by you to
notify us of changes in employees and in rates of pay. We will
process the changes only if notified by that/those individuals;
(d) To advise us in writing of changes of payroll pay dates;
(e) To notify us at least 5 working days prior to the payroll date of all transactions or events which may need to be reflected in the payroll for the period, including details of:
all new employees and details of their remuneration packages;
all leavers and details of termination arrangements;
all changes to remuneration packages;
all pension scheme changes; and
any changes to the employees’ bank accounts;
(f) You will keep us informed of changes in circumstances that could affect the payroll. If you are unsure whether the change is material or not please let us know so that we can assess its significance. and
(g) To authorise us to approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs.
4.3 If the information required to complete the payroll services set out above is received less than 5 days before the payroll date we will still endeavour to process the payroll to meet the agreed payroll date but we will not be liable for any costs or other losses arising if the payroll is late in these circumstances. We may charge an additional fee for work carried out in a shorter time period.
4.4 Our services as set out above are subject to the limitations on our liability set out in the engagement letter and in our standard terms and conditions. These are important provisions which you should read and consider carefully.
SCHEDULE 6
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
BENEFITS IN KIND
Benefits-in-kind returns (forms P11D and P9D and declaration P11D(b)) and Class 1A National Insurance Contributions
1.0 Recurring compliance work
1.1 We will prepare forms P11D and P9D as may be required for each employee including directors based on the accounts, information and explanations provided to us on your behalf.
1.2 We will submit the forms P11D and P9D with the form P11D(b) after the form P11D(b) has been signed by you.
1.3 We will prepare and send to you the P11D information for you to forward to your employees and directors by the statutory due date.
1.4. We will calculate your Class 1A NIC liability on the benefits returned in forms P11D that you are obliged to pay HMRC by the due date and send payment instructions to you.
2.0 Ad hoc and advisory work
2.1 Where you have instructed us to do so, we will also provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These may be the subject of a separate engagement letter, at our option.
2.2 Where specialist advice is required we may need to seek this from or refer you to appropriate specialists.
3.0 Changes in the law
3.1 We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law or your circumstances.
3.2 We will accept no liability for losses arising from changes in the law or the interpretation thereof that are first published after the date on which the advice is given
4.0 Your responsibilities
4.1 You are legally responsible for:
a) Ensuring that your declaration on form P11D(b) is true to the best of your knowledge and belief and therefore that the entries on the related forms P11D and P9D are correct and complete;
b) Filing any returns by the due date after the end of the tax year; and
c) Making payment of Class 1A NIC on time.
Failure to do this may lead to automatic interest, penalties and/or surcharges.
4.2 The signatory to the return cannot delegate this legal responsibility to others. The signatory agrees to check that the forms that we have prepared for you are complete before he/she approves and signs them.
4.3 To enable us to carry out our work you agree:
(a) That all returns are to be made on the basis of full disclosure;
(b) To provide full information necessary for dealing with your benefits-in-kind returns: we will rely on the information and documents being true, correct and complete and will not audit the information or those documents;
(c) To notify us of all transactions or events which may need to be reflected in the forms P11D and P9D for the period, including details of all employees during the year and details of their remuneration packages; and
(d) To authorise us to approach such third parties as may be appropriate that we consider necessary to deal with completing the benefits-in-kind returns.
4.4 If the information required to complete the benefits-in-kind returns set out above is received late we will still endeavour to process the information onto the benefits-in-kind returns to meet the submission date but we will not be liable for any costs or other losses arising if submission is late in these circumstances. We may charge an additional fee in such circumstances.
4.5 Our services as set out above are subject to the limitations on our liability set out in the engagement letter and in our standard terms and conditions. These are important provisions which you should read and consider carefully.
SCHEDULE 7
This schedule should be read in conjunction with the engagement letter and the terms and conditions of business.
VAT
1.1 Recurring compliance work
We will prepare your quarterly VAT returns on the basis of the information and explanations supplied by you.
Based on the information that you provide to us we will tell you how much you should pay and when. If appropriate we will initiate repayment claims where tax has been overpaid. We will advise on the interest and penalty implications if VAT is paid late.
Where appropriate we will calculate the partial exemption annual adjustment.
Where appropriate we will calculate the annual Capital Goods Scheme adjustment.
We will forward to you the completed return calculations for you to review, before you approve the VAT return for onward transmission by us to HMRC.
2.0 Ad hoc and advisory services
2.1 Where you have instructed us to do so, we will also provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These may be the subject of a separate engagement letter, at our option. Where appropriate we will discuss and agree an additional fee for this work when it is commissioned by you. Examples of such work include:
Dealing with all communications relating to your VAT returns addressed to us by HMRC or passed to us by you;
Making recommendations to you about the use of cash accounting, annual accounting, flat rate and other suitable methods of accounting for VAT; and
Providing you with advice on VAT as and when requested. Where the advice is provided in writing, the information provided and the query raised will be set out with our response to you
2.2 Where specialist advice is required in certain areas we may need to seek this from or refer you to appropriate specialists
3.0 Changes in the law
3.1 We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law or your circumstances.
3.2 We will accept no liability for losses arising from changes in the law or the interpretation thereof that are first published on or after the date on which the advice is given.
4.0 Your responsibilities
4.1 You are legally responsible for:
(a) Ensuring that your returns are correct and complete;
(b) Filing any returns by the due date; and
(c) Making payment of tax on time.
Failure to do this may lead to automatic penalties, surcharges and/or interest.
The signatory to the return cannot delegate this legal responsibility to others. The signatory agrees to check that returns we have prepared for you are complete before he/she approves and signs them.
4.2 To enable us to carry out our work you agree:
(a) That all returns are to be made on the basis of full disclosure;
(b) That you are responsible for ensuring that the information provided is, to the best of your knowledge, accurate and complete. The VAT returns are prepared solely on the basis of the information provided by you and we accept no responsibility for any VAT liabilities arising due to inaccuracies or omissions in the information you provide which may lead to a misdeclaration on which penalties and interest may arise;
(c) That we can approach such third parties as may be appropriate for information we consider necessary to deal with the VAT returns; and
(d) To provide us with all the records relevant to the preparation of your quarterly VAT returns as soon as possible after the return period ends. We would ordinarily need the information 5 working days after the end of each quarter to complete our work. If the records are provided later or are incomplete or unclear thereby delaying the preparation and submission of the VAT return, we accept no responsibility for any “default surcharge” penalty that may arise. Where feasible we may agree to complete your return within a shorter period but may charge an additional fee of £60 per hour for so doing.
4.3 You will keep us informed of material changes in circumstances that could affect your VAT obligations. If you are unsure whether the change is material or not please let us know so that we can assess its significance.
4.4 You will forward to us HMRC statements of account, copies of notices of assessment, letters and other communications received from HMRC in time to enable us to deal with them as may be necessary within the statutory time limits. Although HMRC have the authority to communicate with us when form 64-8 has been signed and submitted it is essential that you let us have copies of any correspondence received because HMRC are not obliged to send us copies of all communications issued to you.
4.5 You are responsible for bringing to our attention any errors, omissions or inaccuracies in your VAT returns which you become aware of after the returns have been submitted in order that we may assist you to make a voluntary disclosure.
4.7 Our services as set out above are subject to the limitations on our liability set out in the engagement letter and in our standard terms and conditions. These are important provisions which you should read and consider carefully.
SCHEDULE 8
This schedule should be read in conjunction with the engagement letter and the standard terms and conditions.
PERSONAL TAX – SOLE TRADERS AND PROPERTY INCOME
MAKING TAX DIGITAL FOR INCOME TAX (MTD for income tax)
1.0 Initial sign up
1.1 You are responsible for signing up for Making Tax Digital for income tax (MTD for income Tax). If you wish us to assist you in signing up with HMRC, we will be pleased to assist you in the MTD for income tax signing up process. You should notify us of your instruction to assist you in your MTD for income tax sign up in good time before the first quarterly return is due. We will not be responsible if you fail to notify us in time and you incur a penalty as a result. By signing up, you are agreeing to HMRC’s terms of participation, which include deadlines and associated penalties.
2.0 Recurring compliance work – accounts
2.1 We will prepare the annual business accounts in accordance with generally accepted accounting standards from the books, accounting records and other information and explanations provided to us by you and/or by others on your behalf.
2.2 Where receipts for your property business are less than £150,000 for the tax year, we will prepare property accounts on the default cash basis unless we agree with you that it is appropriate to elect to use the accruals basis and the accounts are to be prepared on that basis. We will then deal with the election on completion of your tax return.
2.3 You are responsible for the bookkeeping. We will make adjustments to your bookkeeping records insofar as they are incomplete when preparing the annual accounts. These will be from the accounting information and records you supply.
2.4 We will not be carrying out any audit work as part of this assignment and accordingly will not verify the assets and liabilities of the business, nor the items of expenditure and income. To carry out an audit would entail additional work to comply with International Standards on Auditing, so that we could report on the truth and fairness of the financial statements. Accordingly, we shall not seek any independent evidence to support the entries in the accounting records, or to prove the existence, ownership or valuation of assets or completeness of income, liabilities or disclosure in the accounts. Nor shall we assess the reasonableness of any estimates or judgements made in the preparation of the accounts. Consequently, our work will not provide any assurance that the accounting records are free from material misstatement, irregularities or error. We would also like to emphasise that we cannot undertake to discover any shortcomings in your systems or irregularities on the part of your employees.
2.5 We have a professional duty to compile accounts that conform with generally accepted accounting principles. Where we identify that the accounts do not conform with generally accepted accounting principles or standards, we will inform you and suggest amendments be put through the accounts before being finalised. We have a professional responsibility not to allow our name to be associated with accounts that may be misleading. In extreme cases, where this matter cannot be resolved, we will withdraw from the engagement and notify you in writing of the reasons. Should you instruct us to carry out any alternative report it will be necessary for us to issue a separate letter of engagement. To ensure that anyone reading the accounts is aware that we have not carried out an audit, we will attach to the accounts a report stating this fact.
2.6 You are the intended user of the report and the report will be addressed to you.
2.7 Once we have issued our report, we have no further responsibility in relation to the accounts for that financial year.
2.8 There are no third parties that we have agreed should be entitled to rely on the work done pursuant to this engagement letter.
3.0 Recurring compliance work – tax
3.1 You will keep records to meet the digital record-keeping requirements of MTD for income tax. When you provide you records to use we will take this as confirmation that the data provided to us is complete and accurate.
3.2 We will require your records no later than 14 days after the quarter end.
3.3 We will submit your MTD for income tax quarterly updates on a quarterly basis.
3.4 We will prepare your year-end tax returns from the submitted quarterly updates and information and explanations that you, or a third party, provide to us. After obtaining your approval, we will submit your tax returns to HMRC.
3.5 We will calculate your income tax, high-income child benefit charge, national insurance contributions (NIC) and any capital gains tax liabilities as included on your tax return, and tell you how much you should pay and when. Where instructed by you, we will advise on the interest and penalty implications if tax or NIC is paid late. We will also check HMRC’s calculation of your tax and NIC liabilities, and initiate repayment claims if tax or NIC has been overpaid.
3.5 Other than Universal Credit (see below), we will advise you as to possible tax return-related claims and elections arising from information supplied by you. Where instructed by you, we will make such claims and elections in the form and manner required by HMRC.
3.6 We are not responsible for considering or applying for any of the exemptions from MTD for income tax. However, if you feel that you are eligible for exemption, please let us know. We are happy to discuss this and may correspond with HMRC on your behalf if needed, or we can guide you on whom you should contact for this.
3.7 We will advise you of any relaxations applicable in relation to the digital records. Where the requirements are impossible, impractical or unduly onerous we will seek to reach agreement with HMRC on a specific relaxation, but this may be subject to an additional fee.
3.8 We will review PAYE notices of coding provided to us by you and advise accordingly. Note that HMRC no longer sends copies of notices of coding to agents.
3.9 Ad hoc queries by way of telephone and email enquiries are not routine compliance and may result in additional fees. As indicated below, where appropriate we will aim to discuss and agree additional fees, but it may not always be possible to agree these in advance and we reserve the right to charge you an additional fee for these queries.
4.0 Ad hoc and advisory work
4.1 Where you have instructed us to do so, we will provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These services will be subject to the terms of this engagement letter and standard terms and conditions of business unless we decide to issue a separate engagement letter. An additional fee may be charged for these services. Examples of such work include:
• advising on the in-year Capital Gains Tax (CGT) reporting requirements on disposals of property, and preparing the in-year return and calculating the CGT due where required [note that this work will always result in additional fees]. We will require you to provide information as early as possible in advance of exchange of contracts in order to provide advice on the tax implications, reporting requirements and to quantify the tax bill;
• advising on ad hoc transactions (for example, pre-sale advice on the sale of assets) and queries (including telephone conversations), preparing and submitting information in the relevant format to HMRC, and calculating any related tax liabilities;
• advising on double tax relief if appropriate;
• dealing with any compliance check or enquiry opened into your tax return or tax affairs by HMRC;
• preparing any amended returns that may be required and corresponding with HMRC as necessary; and
• advising on the rules relating to and assisting with VAT registration and deregistration [or equivalent non-UK taxes].
4.2 Where specialist advice is required, on occasion we may need to seek this from or refer you to appropriate specialists. We will only do this when instructed by you.
5.0 Universal Credit
5.1 If we agree to advise you on Universal Credit, we will issue a separate letter or schedule to cover this area. Universal Credit is, in effect, a social security benefit. Your entitlement or otherwise will depend not only on your own circumstances but also those of your household, and we would require all relevant information to advise in this regard.
6.0 Changes in the law or practice or in public policy
6.1 We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law, in practice, in public policy, or in your circumstances.
6.2 We will accept no liability for losses arising from changes in the law, in practice, or in public policy that are first published after the date on which the advice is given.
7.0 Your responsibilities
7.1 You are required to prepare accounts (financial statements) for each financial year, which give a true and fair view of the state of affairs of the business and of its profit or loss for that period. In preparing those accounts you should:
(a) select suitable accounting policies and then apply them consistently
(b) make judgements and estimates that are reasonable and prudent.
7.2 It is your responsibility to keep proper accounting records that disclose with reasonable accuracy at any particular time the financial position of the business. It is also your responsibility to safeguard the assets and to take reasonable steps for the prevention of and detection of fraud and other irregularities with an appropriate system of internal controls.
7.3 You are also responsible for making available to us, as and when required, all accounting records and all other relevant records and related information.
7.4 You will also be responsible for:
(a) maintaining records of all receipts and payments of cash;
(b) maintaining records of invoices issued and received;
(c) reconciling balances [monthly/quarterly] with the bank statements;
(d) preparing a record of business mileage undertaken in the year;
(e) preparing a record of hours per month worked at home if you wish to claim for business use of your home;
(f) preparing details of any loan interest paid;
(g) preparing a record of capital introduced; and
(h) preparing details of the following at the year-end: stocks and work in progress, fixed assets, amounts owing to creditors, amounts owing by customers, and accruals and prepayments.]
7.5 You are responsible for retaining the following information:
(a) sales invoices
(b) purchase invoices
(c) bank statements
(d) details of bank and cash payments
(e) details of bank and cash receipts
(f) work-in-progress details
(g) access to your accounting records.
We have also agreed that you will provide the following:
(a) a record of the amounts owed to the business
(b) a record of amounts owed by the business
(c) a list of accruals
(d) a list of prepayments
(e) private-use adjustments.
7.6 You will be responsible for keeping records in a format that meets the digital record-keeping requirements of MTD for income tax. You must ensure that the data provided to us is complete and accurate.
7.7 You must provide us with confirmation that your digital records meet HMRC’s digital record-keeping requirements.
7.8 You are legally responsible for:
(a) ensuring that your year-end tax returns are correct and complete and in an appropriate digital format, and capture the appropriate level of data;
(b) ensuring that your record-keeping system is compliant with the new requirements for the digital recording and transfer of data;
(c) filing any quarterly updates and year-end tax returns by the due date; and
(d) paying tax on time.
Failure to do this may lead to penalties and/or interest.
7.9 Taxpayers who approve their quarterly updates and year-end tax returns cannot delegate this legal responsibility to others. You agree to check that returns that we have prepared for you are complete before you approve them.
7.10 To enable us to carry out our work, you agree:
(a) that all quarterly updates are to be made on the basis of full disclosure of all sources of income and charges, and that all year-end tax returns are to be made on the basis of full disclosure of all sources of income, charges, allowances and capital transactions;
and that all year-end tax returns are to be made on the basis of full disclosure of all sources of income, charges, allowances and capital transactions;
(b) to provide all information necessary for dealing with your affairs, including the accounts information outlined above; we will rely on the information and documents being true, correct and complete, and will not audit the information or those documents;
(c) to provide full details of all UK residential property disposals, including associated costs/valuations prior to disposal. Where you consider that you will be non-UK resident in the tax year of disposal, full details of all UK property disposals (residential and non-residential) and disposals of shares in UK property-rich companies or UK property-rich collective-investment vehicles, or such other entities, must be advised prior to exchange of contracts or agreement to transfer shares or units. If information is received after this, we cannot guarantee that we can provide advice on the amount of capital gains tax due or submit an in-year return within 60 days after the completion date of the disposal;
(d) to authorise us to approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs;
(e) to provide us with all the records relevant to the preparation of your quarterly updates as soon as possible after the period ends. We would ordinarily need a minimum of 14 days before submission to complete our work. If the records are provided later or are incomplete or unclear, thereby delaying the preparation and submission of the filing, we accept no responsibility for any penalty that may arise;
(f) where a quarterly or annual submission obligation is missed, this may incur a penalty point according to HMRC’s points-based system for late filing. Once the points threshold has been reached, a financial penalty may apply. Should you wish us to assist in reviewing and appealing the penalty point or financial penalty, you should notify us of your instruction and confirm the grounds for the appeal a minimum of 14 days before the appeal deadline. Where instructed by you, we will make an appeal in the form and manner required by HMRC;
(g) to provide us with information in sufficient time for your tax return to be completed and submitted by the 31 January following the end of the tax year. In order that we can do this, we need to receive all relevant information by 1 December. Where feasible, we may agree to complete your return within a shorter period but may charge an additional fee of £100+VAT for so doing.
7.11 You will keep us informed of material changes in your circumstances that could affect your tax liability. If you are unsure whether the change is material or not, please let us know so that we can assess its significance.
7.12 Where you wish us to deal with HMRC communications, you will forward to us all communications received from HMRC such as HMRC statements of account, copies of notices of assessment, tax codes and letters. These must be provided in time to enable us to deal with them as may be necessary within the statutory time limits. It is essential that you let us have copies of any correspondence received because HMRC is not obliged to send us copies of all communications issued to you.
7.13 Our services as detailed above are subject to the limitations on our liability set out in the engagement letter and our standard terms and conditions of business. These are important provisions that you should read and consider carefully.