2. OUR RESPONSIBILITIES
2.1 Profit from accounts prepared under generally accepted accounting principles may require adjustment to arrive at the profit figure assessed for tax. Where necessary we will prepare the computations for this adjustment from any accounts work we have done, or accounting records we are holding, as well as information and explanations provided by you.
2.2 We will prepare the company tax return together with any supplementary pages that are required from the information and explanations you provide to us.
2.3 We may take account of the steps and checks suggested by HMRC in their “Agent Toolkits.” While use of the Toolkits is voluntary, we will ensure that our quality control procedures match or enhance the suggestions in the Toolkits. In the unlikely event that HMRC consider your return to be inaccurate, we will therefore be able to help you demonstrate that reasonable care has been taken in preparing your return. This will significantly reduce the possibility of an inaccuracy penalty being imposed.
2.4 It is mandatory for the company tax return to be delivered electronically to HMRC using the Inline Extensible Business Reporting Language (iXBRL) format, a type of computer language. After obtaining the written approval of an appropriately authorised person we will file the return, computation and accounts online in the iXBRL format.
2.5 Where applicable, we will convert your accounts in to the required iXBRL format appropriate for the purposes of submission of the accounts to HMRC. We will provide you with detailed information regarding the tagging applied for your approval.
2.6 We will calculate any tax the company tax return shows the company to have. We will tell you how much to pay and when. We will advise on the interest and penalty implications if any payments are made late. Where we become aware that tax has been overpaid we will initiate a repayment claim.
2.7 We will inform you if instalment payments of tax are due for an accounting period and the dates they are payable. We will calculate the quarterly instalment amounts based on the information supplied by you and advise you of these amounts.
2.8 We will advise when additional tax is due on loans by the company to directors, shareholders or their associates, and calculate the payments due or the amount repayable when the loans are repaid.
2.9 We will advise you as to possible claims and elections arising from information supplied by you. Where you instruct us to, we will make such claims and elections in the form and manner required by HMRC.
2.10 If the company is selected for enquiry by HMRC, we will agree separate terms of engagement. The supplementary engagement terms will include responsibilities and fees as appropriate.
2.11 Since 17 July 2013 a General Anti-Abuse Rule has been in operation in the UK. This rule enables HMRC to further tackle abusive tax planning schemes. Due to the low probability of eventual success of such schemes and the high ethical standards of this firm, it is our policy not to advise on tax schemes that we consider to be artificial or aggressive in nature. Please let us know if you would like to discuss this matter further or if you feel that you are disadvantaged in any way by the firm’s policy on tax avoidance.
Payments under deduction of tax
2.12.1 If applicable, we will complete, using information provided by you, return form CT61 regarding payments made to and by the company under deduction of tax. We will send the CT61 form to you for approval, signature and submission by you to HMRC. We will advise you of the amounts of tax that are due, and the due date for payment and submission of the form. You must inform us immediately if the company pays or receives any interest or similar amounts under deduction of tax.
Groups and consortia
2.13.1 In relation to groups and consortia of which your company is a member, and in respect of which you have instructed us to act; we will provide the following additional services:
a. We will advise on the tax treatment of intra-group payments of dividends, interest and royalties and similar liabilities.
b. In respect of dividends, interest, and royalties received, we will advise on the applicability of the relevant double-tax treaty to the withholding tax rate, and assist with obtaining a UK certificate of tax residence.
c. For dividends, if relevant, we will make any necessary election to tax the dividends in the UK in order to obtain treaty relief.
d. We will deal with all communications relating to elections addressed to us from HMRC.
e. Where instructed, in respect of claims for group and consortium relief:
• We will advise as required on claims for group and consortium relief and the interaction with other reliefs.
• We will prepare and submit to HMRC appropriate claims.
• We will adjust the computations and returns to reflect the surrender and receipt of group and consortium reliefs.
• We will prepare and submit to HMRC necessary documentation regarding the allocation of losses via group relief and the annual loss allowance.
• We will advise on arrangements for payment of tax and the surrender and set-off of tax refunds within the group.
• We will advise on claiming eligible unrelieved foreign tax (EUFT) or the surrender of any amount of EUFT
f. Where instructed, in respect of intragroup payments of interest:
• We will advise on withholding tax obligations.
• For cross-border payments we will prepare and submit to HMRC applications to account for no or a reduced amount of withholding tax under the EU Interest and Royalty directive and double-tax treaties, as applicable.
• Where withholding tax is due, we will complete form CT61 and advise on payment.
• We will adjust corporation tax computations and returns to reflect interest payments and associated withholding tax, if any.
g. Where instructed, in respect of intragroup payments of royalties and similar liabilities:
• We will advise on withholding tax obligations.
• Where withholding tax is due, we will complete form CT61 and advise on payment.
• We will adjust corporation tax computations and returns to reflect royalty and similar payments and associated withholding tax, if any, and make such additional disclosures in form CT600-H as are appropriate.
2.13.2 We shall be pleased to advise you on matters relating to the company’s corporation tax liability, the implications of particular business transactions and on other taxation matters which you refer to us, such as national insurance, income tax deducted at source, employee benefits including pensions auto-enrolment, value added tax and inheritance tax. Such services would also be subject to separate terms of engagement.
3. GUIDELINES
3.1 We 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.
3.2 It is a criminal offence for the company not to comply with tax legislation. It is not part of the scope of our work relating to taxation to carry out a compliance exercise on whether you are in breach of any tax legislation. You are responsible for ensuring that the company complies with relevant tax legislation, and we are entitled to assume that it does so.
3.3 In any tax planning advice that we may offer, we will only consider the possible tax consequences of changes to your investments and will not offer any advice or comments on the possible other merits or otherwise of particular acquisitions or disposals of specific investments.
Updated December 2020
