The purpose of this schedule to our engagement letter is to set out the basis on which we are to provide taxation services as your agents on the basis that you will make full disclosure to us of all relevant information.
1. TAXATION SERVICES
1.1We shall prepare, in respect of each accounting period, a computation of profits adjusted in accordance with the Taxes Acts. Once they have been approved by you we shall complete the appropriate self assessment schedule.
1.2 We shall prepare on your behalf the necessary self assessment returns including a calculation of your tax liabilities from the information supplied by you. With your agreement we shall obtain some information direct from your bank, building societies etc.
1.3We shall forward your return (together with copies of all supporting material we propose to submit to HM Revenue & Customs (HMRC) with your return) to you for approval and signature. You are legally responsible for making a correct return in respect of your annual tax liability, and it is essential that we as your agent are supplied with all relevant information. At this stage we shall advise you as to your outstanding tax liabilities and the appropriate payment dates.
1.4It is important to note that HMRC will charge interest on any tax paid late, and in some cases can increase any outstanding liability by imposing surcharges.
1.5 Furthermore, to avoid automatic late filing penalties, which start at £100, the return must normally be submitted to the Inspector by 31 January following the tax year to which the return relates. This date may be extended if there is an HMRC delay in issuing the return to you.
1.6It is therefore essential that you respond on a timely basis to any requests for further information to enable us to complete your return and submit it to HMRC on time.
1.7 It is your responsibility to ensure that your tax is paid on time and that your return is filed on time.
2.1We shall respond to any enquiries from HMRC arising from your tax return. However, we shall consult you if it becomes clear that HMRC are opening an in-depth enquiry. They have the power to do this on a purely random basis.
2.2 If HMRC’s enquiry requires us to respond in depth, we shall:
• Ascertain whether you wish us to respond on your behalf or whether you wish to deal with the enquiry yourself;
• If you wish us to respond, we shall proceed and invoice you on a time-spent basis up to a cost of £500;
•If our costs exceed, or are likely to exceed £500, we shall discuss the matter with you further and agree a costing for our work.
3. RECORD KEEPING REQUIREMENTS
3.1Self assessment requires full records supporting a return to be retained until the fifth anniversary of the 31 January following the end of the year assessment concerned. You will be responsible for retaining these records.
Penalties of up to £3,000 may be imposed for non-compliance with these provisions.
4. OTHER SERVICES
4.1We shall be pleased to give advice on the tax implications of specific matters which you may refer to us from time to time. Such advice and / or assistance would also be subject to separate terms of engagement.
4.2You will be responsible for all other returns, particularly including those relating to employees' taxes, PAYE and VAT. We shall, however; be happy to advise in this connection if specifically requested. Such advice and / or assistance would also be subject to separate terms of engagement.
5.1We are bound by the ethical guidelines of the Institute of Chartered Accountants in England and Wales (“ICAEW”). Under those guidelines we are obliged to accept instructions to act for you on the basis that we will act in accordance with those guidelines.
6. SUPPLY OF INFORMATION FOR TAX RETURNS
6.1For any particular tax year, your tax return must be lodged with HM Revenue and Customs by the 31 January following the end of that tax year. In order to allow us sufficient time to complete your tax return by this deadline, you must supply to us all of the information required to complete your tax return for a particular year by 31 August following the end of that tax year. You should note that giving us 95% of the information timeously will not help us to complete the return unless you give us a reasonable estimate of the other 5%. An incomplete return will be treated by HM Revenue and Customs exactly the same as no return and will incur penalties and interest.
6.2Whilst we will make every effort to meet the filing deadlines of 31 October (for paper returns) and 31 January, if you do not supply us with all the information necessary to complete your tax return by 31 August, we cannot guarantee to do so.
6.3 As a result of not giving us all the information by 31 August, if we are unable to meet the 31 October or January filing deadline, we cannot accept any responsibility for any penalties and interest that you may incur.
7.1Under self assessment you will receive a "tax payer statement" in January and July (and perhaps two or three other times during the year) showing the amount HM Revenue and Customs believe is payable by you. HM Revenue and Customs will not send us a copy of this "tax payer statement". We advise you to pay the amount being demanded by the due date to avoid interest and penalties (unless we have advised you to pay a different figure).
7.2 We will try to advise you of the following payments for a tax year:
i the interim payment due on 31 January in the tax year;
ii the interim payment due on 31 July after the tax year;
iii the balancing payment due on 31 January following the end of a tax year.
7.3However, we do not guarantee to do so and you should be guided by the "tax payer statements" as to the amounts to pay on the relevant dates.
7.4It is your responsibility to make all the tax payments that are owing on the due dates. If you do not, you will incur penalties and interest. We will not be held responsible for ensuring that you make the necessary payments and thus for any interest and penalties.
8.1Under self assessment, there is no need to file accounts, tax computations, dividend schedules, capital gain computations and similar workings. There are occasions when we may feel that, to provide full disclosure to HM Revenue and Customs, such documents should be filed with the tax returns.
8.2 If we consider this to be the case, we will attach these documents to your tax return. By signing the tax return, you will be agreeing to submit these documents to HM Revenue and Customs.
9.1If you are a partner in a business, your share of the partnership's profit or loss will be included in your tax returns. It is your responsibility for providing this information to us as part of your tax return information.
10. PAYE INFORMATION
10.1If you are employed, or change employment in the course of the year, you will require a P60 and a P11D from your employers. These documents are part of the information that we require to complete your tax return.
10.2 You will be responsible for obtaining these documents and supplying them to us.
11. TAX CREDIT CLAIM
11.1Tax Credits are similar to Social Security benefits and therefore we will not be advising on eligibility unless specifically requested to do so. This work will be subject to separate terms of engagement. It is your responsibility to make any claims and advise HM Revenue and Customs of any changes that may affect the claim, within the time limits.
Updated November 2015