Letter of Engagement




It is both a requirement of the law relating to the provision of services and also good professional practice to set out clearly in writing the terms and conditions upon which we provide you with professional services.


This letter of engagement complies with this requirement. We would request that you carefully read through this letter to ensure there is no misunderstanding between us. If you agree to the terms and conditions set out,  then please sign and return the spare copy to us. If there is any point upon which you require clarification, then please contact us. If, within four weeks, we have not heard from you or received back the signed copy, we will assume that you are in agreement with the contents of this letter.


This engagement letter is governed by and construed  in accordance with English Law. The Courts of England will  have exclusive jurisdiction in relation to any claim, dispute or difference concerning this engagement letter and any matter arising from it. Each party irrevocably waives any right it may have to object to any action being brought in those courts, to claim that the action has been brought in asn inappropriate forum , or to claim that those courts do not have jurisdiction.


Except as may be otherwise provided by law , any liability to any third party arising under the Contracts (Rights of Third Parties ) Act 1999 is hereby excluded.


Part 1 - Services to be provided by us.


We agree to :-


1. Prepare accounts on the following basis :-


1.1 Prepare your annual accounts in accordance with all relevant Accounting Standards from the records maintained by you,  and on the basis of information supplied  by you and to provide advice and assistance on the most appropriate records for you to keep.


1.2  It is expressly agreed that the accounts preparation  is not an audit  and is limited in its scope, as you are not subject to statutory audit, and we have no statutory duty to report on the accounts. We will , however, as your taxation agents, include a report on the accounts when these are submitted to the Inland Revenue . In the absence of special circumstances, the report will be addressed to yourselves and be worded as follows  ‘We have prepared these financial statements from the books , records and explanations received, and certify that the accounts are in accordance therewith. We have not carried out an audit or other review, and consequently we do not express any opinion on these financial statements ‘.


1.3 Our work will not be an audit of the accounts in accordance with Auditing Standards. 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 the completeness of income, liabilities or disclosures in the accounts. We shall not assess the reasonableness of any estimates or judgements made in the preparation of the accounts. Consequently, our work will not provide any reasonable assurance that the accounting records are free from material misstatement, whether caused by fraud, other irregularities or error,


1.4 We have a professional responsibility not to allow our name to be associated with accounts which we consider may be misleading. Therefore, although we are not required to search for such matters, should we become aware, for any reason, that the accounts may be misleading , and the matter cannot be dealt with by means of adjustments to the accounts, we shall withdraw from the engagement , and shall notify you in writing of the reasons.


1.5 As part of our normal procedures, we may ask you to provide written confirmation of any information and explanations given by you orally in the course of our work.


2. Dealing with taxation matters :-


2.1  We will deal,as your agent, with all taxation matters of  a routine nature arising in connection with your affairs arising out of the Self Assessment procedures and to comply with the filing requirements under the Self Assessment regulations. This is subject to your having supplied us with all information relevant to your affairs at least one month before the due date for filing any return, and supplying us with a signed return , after we have prepared the necessary figures, at least one week before the due date for filing the return.


2.2 It should be noted that we can only negotiate with the Inland Revenue on the basis of information supplied by yourself, or third parties acting on your authority.


2.3 This service excludes any investigation into your affairs by the Inland Revenue, H M Customs and Excise or the NIC authorities,  and also excludes enquiries , ( except enquiries of a minor or routine nature) raised upon your return under the formal enquiry provisions which would be the subject of a separate letter of engagement.


2.4 In particular, this service includes :-


(i) preparing and submitting ,subject to your agreement, the Self Assessment Income Tax Return, on the basis of information provided to us by yourself.


(ii) We will, without reference to yourself, acting as your agents deal with all correspondence, assessments, payment demands, including lodging, where necessary appeals and claims, and applications for postponement of payment.


(iii) Where it is necessary in connection with your returns to prepare accounts or statements of income and expenditure in respect of trading or property letting we will obtain your approval and submit these to the Inspector of Taxes with your annual return, but we would reserve the right to charge an additional fee for preparing any such accounts if  such work is additional to that covered under ( 1) above.



Part 2 – Information to be supplied by you and agreements by you


For your part ,you agree :-


1.1 To comply with any conditions set out in Part 1


1.2 To supply us with all information in relation to your affairs that we may reasonably require, or that is relevant to your affairs, promptly and in good order.


1.3 That notwithstanding our obligation under this letter of engagement to prepare Tax Returns, Accounts, etc, you  ( and you alone) are responsible for the accuracy and completeness of your accounting records or other records and that all liabilities, howsoever arising, as a result of errors, inaccuracies, omissions, commissions or a lack of clarity in your records, insofar as they attach to us, are excluded, unless it can be proved that we had specific written notice of the inaccuracy or incompleteness of your records.


1.4  To follow our advice in relation to the nature of your bookkeeping, accountancy and other records.


1.5  To fully comply with the Self Assessment Regulations in all matters including, in particular, the requirement to retain all your records,  personal and business for a period of (usually) six years after the end of the tax year involved. More precise details of the requirements are available upon request.


 1.6 That nothing in this letter makes us directly or indirectly responsible for the payment of any taxes. You agree that you remain fully responsible for the payment of all taxes relating to your affairs. You also agree that no payment should be made to the Inland Revenue in respect of Income Tax or  NIC, without first having received written advice from ourselves that the sums demanded are correct. You also agree that any tax demands should be forwarded to us as soon as possible for checking, in order to minimise the risk of either interest or penalties.


1.7 That you will supply us immediately upon receipt by you with copies of any documents or notices served upon you by the Inland Revenue


1.8 You acknowledge your responsibilities , as follows:-


1.        You are responsible for ensuring that  you maintain proper accounting records.


2.        You are responsible for making  available to us , as and when required, all the  accounting records, and other relevant records and related information


3.        You are responsible for the accuracy and completeness of the information supplied to us which entails ensuring that internal controls are adequate and that appropriate accounting policies are selected and applied.



Part 3 - Non Compliance by yourself


1.1 If at any time you have not fully complied with our advice in relation to your accounting records or


1.2  You have not supplied us with the necessary information to deal with your affairs within any statutory time limits (and the time limits set out in this letter of engagement shall be of the essence for the purposes of complying with statutory time limits) or are in breach of  any matter in 1.8 of Part 2 above or


1.3     You have in any other way by omission or commission made it impracticable for us to comply with our obligations under this letter of engagement;


then, provided that your standing order payments are not in arrears, or that any other amounts due to us have been paid in full, we agree to do whatever we can to assist in rectifying the situation, but subject to our reserving the right to make a specific charge on a basis to be agreed before any additional work is undertaken.


1.4 We must emphasise the severity of the current rules with regard to interest and penalties that can be applied by  the Inland Revenue , both in relation to late payment of tax and late submission of returns. The deadlines set out by law are critical - not even one days grace is allowed. Penalties and interest can also arise where you have supplied us with incomplete or inaccurate information upon which we have relied in making estimates of your liabilities in order to agree payments on account with the Inland Revenue.


Part 4 - Other work


Any work of whatsoever description not included in this letter of engagement shall be the subject of a separate agreement ,and this letter shall be taken to be a full and inclusive statement of the matters referred to.


We will be pleased at any time to advise you on any business or taxation matters which you care to refer to us.


Part 5 - Personnel


The work will normally be undertaken by Peter Brown


Part  6 - Fees


1.1  Our fees are normally calculated on a time basis , and the charge out rate will reflect the levels of skills and knowledge involved. We will normally give you an indication of the likely level of work and hence fees that may be involved with any area of work before we undertake any particular matter. Bills will be raised at appropriate intervals during the year and will be payable by you within 30 days of an account being rendered.


a.        If it becomes necessary for us to withdraw from the engagement at any time, for any reason, then our fees for time spent up to that point will be payable whether or not any particular matter has been completed.


b.        In law, we are entitled to retain possession of any books and records that are your property , in respect of which we have carried out work, and for which fees are payable, until such time as the fees have been paid. This is known as an accountant’s lien, and we would reserve our rights to enforce such a lien.


c.        We reserve the right to prohibit the circulation or publication of  any document we have prepared on your behalf  if either the fees in respect of that document remain unpaid or if , in the light of information which has come into our possession subsequent to our completion of the document , we are of the opinion that we would not have completed that document had the information been available at the time of completion.


d.       If it is necessary to carry out work beyond the responsibilities outlined in this letter , this will involve additional fees.


e.        Invoices are payable in full before the report is signed and the accounts are made available for filing with the Inland Revenue.


Part 7 – Complaints and queries


If you have any queries in relation to specific matters you should refer to Peter Brown.


Part 8 - Retention of and Access to Records


1.1       During the course of our work we will collect information from you and from others acting on your behalf and will return any original documents to you following the completion of your accounts.


1.2       Whilst certain document may legally belong to you, we intend to destroy correspondence and other papers that we store which are more than seven years old , other than documents we consider to be of continuing significance. If you require retention of any document you must notify us of that fact in writing.


1.3       As part of our ongoing commitment to providing a quality service,  our files are periodically subject to an independent quality review. Our reviewers are highly experienced and professional people , and of course, are bound by the same rules of confidentiality as this firm.


We apologise for the length and complexity of this letter ,but there is little point in skimping an a letter which we hope will be the foundations upon which a long and mutually rewarding business relationship will be built.


Yours sincerely


Peter Brown



                                                                                                 Sole Trader engagement letter






Income Tax  Return for the year ended 5th April


An aide memoire of items required for completion of  the tax return


This note is not exhaustive and if you consider there is further relevant information , then please supply it to us


1.        The Self Assessment Tax Return , together with any relevant correspondence

2.        P60s certifying all income from employment and pensions in the year

3.        Tax deduction certificates for all forms of investment income received

4.        Details of any self employed or other income of any kind

5.        Your date of birth and that of your spouse (if appropriate)

6.        Details of any charitable giving on which tax relief is available

7.        Details of any pension contributions

8.        Details of any other reliefs for which you may believe you are eligible

9.        Details of any capital disposals (eg shares etc) together with details of the dates and cost of acquisition