Chartered Certified Accountants Engagement Terms

A C Eggleton & Co. Engagement Terms

What we have agreed to do:-

Prepare Accounts and Tax Returns from records maintained by you and to act as your agent for Income Tax and Capital Gains Tax purposes. We will certify those accounts as being in accordance with the accounting records made available and from information and explanations supplied, except where statute or other authority demands otherwise, or an audit is specifically requested, in which case the terms of that audit and the opinion to be given will be agreed between us and evidenced in writing. Your Tax Return may be submitted electronically.
Calculate Income Tax, Capital Gains and Class 4 National Insurance liabilities due and advise you of them and make any submissions required under the self-assessment regulations. We shall have errors corrected and respond directly to any enquiries which may be raised by the Revenue, except where in our opinion further information is required from you.
Advise you as to the tax and other implications of any proposed or actual transactions which you may bring to our attention and comment upon any aspects of your results, circumstances or record-keeping where we believe our advices may be helpful.

Where taxation advice is sought at short notice eg. requiring an immediate response by telephone, any advice given must be treated as provisional and subject to confirmation. The complexity and frequency of change of tax law requires that on occasion many issues must be carefully considered before a firm opinion can be given, with the result that in such circumstances we cannot be held responsible should such advice prove inadequate.
Undertake such other work as you may request from us such as the preparation of VAT returns, projections, cash flows, PAYE compliance and grant or loan applications etc.

Where we provide PAYE and Payroll services our monthly fees are inclusive of all routine payroll preparation, payslips, Inland Revenue PAYE payslips, P45s, P60s and P35s, but exclude other Employers Annual Returns such as P11Ds, P11D(b)s etc which are returns of Benefits in Kind, Class 1A NI contributions and so on.
Continue to act for you with regard to all those matters to which we have routinely attended until such time as we are instructed otherwise. Your affairs may be dealt with by any member(s) of staff to whom they may be delegated but remain subject to the supervision of the Practice Principal.
Our primary aim is to ensure that you pay only the minimum tax and NI which you are legally obliged to pay according to your circumstances. We do not routinely act for you with regard to Social Security entitlements such as Tax Credits, which, despite their name, have no impact upon your tax liability. It is recognised however that in certain circumstances, elections made or income tax purposes can, as a result of increasing or decreasing your taxable income, impact upon your entitlement to certain benefits such as tax credits. If you wish therefore, subject to you providing us with the details of your entitlements and the basis of your claims, we can take those matters into account in determining any elections for tax purposes should you request us to do so at the appropriate time.
Receive refunds of tax and NI on your behalf which will be held in a clients' account pending checking and onward transmission, subject only to set off against any fees rendered. This term enables us to settle fees by deduction without the need to obtain your further consent.
Ensure that your work is carried out to a proper professional standard and to maintain strict confidentiality as to your affairs.
Process your work as soon as possible after receipt, having regard to sequencing, the demands of all clients and the necessity to deal fairly with each. Because of this and much compliance work being routine, it may be several weeks, or at busy times even months, before your work is attended to but please be assured that you will not have been overlooked and no deadlines will be missed. If a matter is urgent we will always do all we can to accommodate it.
Where we act as your Independent Financial Adviser and undertake Financial Services work our remuneration will be at your choice from our menu on our "Key facts about the cost of our services".
Where we are asked to act as your Financial Adviser, or have given Financial Services advice which has resulted in the placing of investments or other products which yield fund based or renewal commission, you consent to such commissions being retained by us in exchange for which we undertake to carry out all necessary servicing and administration, and for investment portfolios, we will also carry out a regular review - usually annually.

Where the advice given, or the investments or other products placed, give rise to no such commissions then we will not carry out any reviews, but will be happy to do so upon request in which case your chosen remuneration terms will apply.

We will undertake work either on a fees only or a combination of fees and commission. In the latter case so long as the commissions received and retained are sufficient to cover our remuneration no fees will arise.

Certain ISA's, Mortgages, Unit & Investment Trusts & Stakeholder Pension products give rise to either no or very little commission and fees can therefore normally be expected to arise. In the case of National Savings products fees will always be in point. In all other circumstances, typically where we undertake work at your instruction from which no commissions can arise, then our remuneration will be by way of fee to you.

What we require you to do:-

Maintain adequate records of all transactions relative to your business affairs and of your personal affairs insofar as they are relevant to the proper completion of your Tax Return. The business records must contain details of all goods or services supplied by you and to you with a written record of how each supplier has been paid, whether by cash, cheque or other means. Likewise records of all sums introduced from other sources or withdrawn for private purposes must be maintained and where VAT is in operation adequate records of the inputs and outputs leading to a make-up of the VAT return. In all cases the underlying documentation, invoices, receipts, vouchers, finance agreements etc. must be kept.

Off-setting sums owed by you against sums owed to you (and vice-versa) causes particular problems in your accounting and should be avoided if at all possible. If you must do so be very sure to set out clearly in your written records the details of each off-set.

For this purpose your accounts when drafted should result in a balanced cash account, customer account or similar, meaning that your records of work done, sums received, takings, assets sold, and sums introduced are in balance with your records of how the sums received were paid away i.e. to bank lodgements, sums drawn or withheld for wages, private drawings, cash expenses and so on.

We will treat all expenditures recorded in your business books and records as being expenditures for the purposes of the trade unless clearly indicated to the contrary. But you should in any case minimise the number of private expenditures made through the business since the need to identify and exclude them will inevitably increase the costs of preparing your accounts, ideally private expenditures should be met from private sources eg. a private bank account funded by transfers from your business bank account. Where private expenditures are made through the business and are not clearly marked, while we will treat them appropriately where they are identified as part of our testing routines, we cannot undertake that any or all such items will be identified and excluded from your trading accounts.

There is fundamental distinction in the UK tax code between capital expenditure, meaning expenditure on assets which are used for the purposes of carrying on the trade, and revenue expenditure which is broadly expenditure incurred for the purposes of earning immediate profits e.g. trading stock, contract costs, overhead etc. While some capital expenditure may qualify for tax relief under the capital (or investment allowance) codes, none of it will normally qualify by way of deduction from trading profits. On occasion it will not be clear whether expenditures are one or the other. Please be sure therefore to indicate in your books and records those expenditures on capital assets (or which are incurred in connection with their acquisition) in order that we may give them their correct tax treatment. A particular area of difficulty is in the construction, extension or improvement of buildings and property generally, as opposed to their mere repair. A little narrative alongside the entry can be very helpful. If in doubt contact us.
Provide as at each accounting date, details of stocks and work in progress, and amounts owed by you and to you for goods and services received or supplied before that date.
Let us have promptly on demand all of the accounting records necessary for completion of the annual accounts.
Make available to us all the records which we may reasonably require for explanation and verification of the transactions and information relating to your affairs, and respond promptly and fully to enquiries in connection with the accounts and Tax Return preparation.
Where we are instructed to prepare any accounts, VAT returns and other submissions, or carry out any audit, you will ensure that reasonable time is given to us for the purpose. In the case of VAT returns, not less than 10 working days before the due date. For the preparation of VAT Returns you will ensure that you send us only the supplier’s invoices relevant to the business and that any private expenditures are excluded.
Be sure to check for correctness your completed Tax Return. Tell us of any sums received, property or other transactions, or new sources of income arising which may require to be entered on it including those which arise from your business but which are not of a routine trading nature eg. sale of a business asset with a capital gain or an interest earning deposit containing funds from your business. Such items must also be notified to us when information is requested for your Tax Return - you will appreciate that where information is given to us for say accounts preparation or other purposes it may be dealt with by a staff member not involved in preparing your Tax Return.
During the engagement, books, records and other documents belonging to you will be provided to us. You are responsible for uplifting those documents from time to time. Once the engagement is terminated you are responsible for promptly uplifting any records belonging to you and after a reasonable time we shall give you notice of our intention to destroy any remaining records, and will do so in the event that they are not then uplifted.
Advise us in good time of any proposed transactions which have a tax implication and request advice. Bear in mind that because tax rules change frequently you must ask us to review any advice already given if a transaction is delayed, or if an apparently similar transaction is to be undertaken.
You are responsible for advising us of any arrangements which you may make or have made at any time in the past which may give rise to a charge under the Pre-Owned Assets Tax regime, which, broadly, seeks to bring into charge any residual benefits retained by you following a gift or a transfer at undervalue of an asset owned by you or in which you had an interest. Typically such arrangements are entered into for the avoidance or reduction of inheritance tax. It may for example include arrangements involving the family home but it is not restricted to property, any assets may give rise to a charge where the annual value of the benefit retained exceeds £5,000.

Tax Disputes

Much tax and VAT law is uncertain in its impact. Differing views of the tax implications of the same transaction may tenably be held. For example, for deductions from trading profit the qualifying hurdle is that the ‘expenditure be wholly and exclusively incurred for the purposes of the trade’, and for a deduction from employment income it is typically ‘incurred in the performance of the duties of the employment’. Those two definitions inevitably give rise to differing opinions as to deductibility which come down to a matter of professional judgement. Where we have made a claim for relief, or reached any other conclusion or made any decision or given any advice in the course of acting as your agent for tax purposes, and that claim, decision or advice was reasonably made or given having regard to the circumstances and information available at the time and the then prevailing treatment generally understood to be acceptable, we shall not be held liable for any additional tax, interest or penalties or other costs howsoever arising, which become payable as a result of an Inland Revenue enquiry or investigation or any other circumstance where the Revenue or any other party’s view is found to prevail or is conceded.

Employee Protection

It is an express term of this engagement that no liability to you is inferred or admitted by employees of the practice in respect of the duties carried out in the course of their employment and that you will not make or pursue any claim against any employee of the practice, acknowledging that all rights and remedies for any wrongs lie against A C Eggleton & Co Ltd and not against any Director or employee.

Professional Indemnity Cover and Limitation of Liability

We confirm that we hold Professional Indemnity cover in accordance with the requirements of the Chartered Association of Certified Accountants and the Financial Services Authority, designed to ensure compensation is available to you in the event that you suffer loss or damage as a result of any negligent error by ourselves. However our liability for any such claim for compensation is limited to the level of our Professional Indemnity cover from time to time in force. Details of the current level of cover are available to you at any time upon request.

NI Contributions and Entitlement to State Retirement Pension

This is not a check that forms part of our routine service to you, nor are we normally in a position to know your entire contributions history, and so if you are concerned that you will not qualify for the full entitlement and you wish us to look into the matter for you then please contact us.

Fees

We operate wherever possible a policy of fixed fees advised to you in advance for the routine matters of Accounts and Tax Return preparation and our Payroll and VAT services are likewise fixed price. It is a condition of our fixed price quote that you will maintain the proper books and records, respond promptly to our enquiries and attend to the other matters required of you by these terms and in the event that you do not do so and we are put to significant extra work as a result then we reserve the right to raise additional fees.

We do not quote charge-out rates. We price our work having regard to its value, including the time spent by us, the urgency of the work, and the levels of skill and responsibility involved. Unless otherwise agreed, fees will be billed at appropriate intervals in the course of the year for the different classes of work and will be due on presentation without any set-off, counter-claim or other deduction.

For new clients there will ordinarily be an initial set-up fee. Should you instruct us to carry out additional work or should the engagement be a "one-off" then wherever possible a quote will be provided beforehand but in certain circumstances the fees may be calculated only upon completion of the task or in the course of it as may be appropriate.

Disbursements incurred in connection with the engagement are also re-chargeable. VAT will be added where applicable to the fees and to any quotations given. We may terminate or suspend our engagement and cease acting if payment of any fees billed is unduly delayed. In the event of dispute jurisdiction will be by Dumfries Sheriff Court. We reserve the right to exercise a lien over any books and records in the event of non-payment of fees.

General

This letter supercedes any previous engagement letter and remains effective until replaced. Your acceptance of, and consent to, these Engagement Terms is deemed by your instructions to us to act on your behalf unless you advise us to the contrary.

All demands, services and notices required by any regulation or Act of Parliament must be made in writing to the Company at 5 Bruce Street, Annan, Dumfriesshire, DG12 5AB. Service of such notices by e-mail will not be a valid service under the Arbitration Act 1996.

A C Eggleton & Co is a trading name of A C Eggleton & Co Ltd Registered in Scotland Company No SC234875
Registered Office: 5 Bruce Street, Annan, DG12 5AB