Terms and Conditions for Sole Traders

WASHINGTON ACCOUNTANCY LIMITED

LETTER OF ENGAGEMENT & TERMS AND CONDITIONS

FOR ___________________________

Dear Sir, 

In accordance with the recommendations of our professional body, the Association of Accounting Technicians, this letter confirms the basis on which we provide services to you so as to avoid any misunderstandings of our respective responsibities.

Anti money laundering legislation

All accountants must comply with onerous duties imposed by the Proceeds of Crime Act 2002, the Terrorism Act 2000 and the Money Laundering Regulations 2007 (the “Anti Money Laundering Legislation”), which are intended to inhibit the activities of terrorists and other criminals by denying them access to technical expertise.  If we fail to perform these duties, we risk imprisonment.

Before we accept your instructions, we may need to obtain ‘satisfactory evidence’ to confirm your identity. In certain circumstances, we may need to obtain evidence confirming the identities of third parties, the source of any funds or other property, the purpose of any instructions or any other matter. We may also need to obtain such evidence after we have begun to act on your instructions.

We assume that our clients are honest and law abiding. However, if at any time, there appear to be grounds to suspect (even if we do not actually suspect) that your instructions relate to ‘criminal property’, we are obliged to make a report to the Serious Organised Crime Agency (“SOCA”), but we are prohibited from telling you that we have done so.

In such circumstances, we must not act on your instructions without consent from SOCA. If SOCA do not refuse consent within 7 working days we may continue to act. If SOCA issue a refusal within that time, we must not act for a further 31 days from the date of the refusal.

‘Criminal property’ is property in any legal form, whether money, real property, rights or any benefit derived from criminal activity. It does not matter who carried out the criminal activity or how removed the property is from the original crime. Even if you are honest in your dealings, if your property represents a benefit from someone else’s crime, we must still make a report.

Activity is considered ‘criminal’ if it is a crime under UK law, no matter how trivial For example, tax evasion is a criminal offence but an honest mistake is not. We will assume that all discrepancies are mistakes unless there is contrary evidence.

Client monies

We may, from time to time, hold money on your behalf.  Such money will be held in trust in a client bank account, which is segregated from the firm’s funds.

If the total sum of money held on your behalf exceeds £2,000 for a period of more than 2 months, or such sum is likely to be held for more than 2 months, then the money will be placed in an interest-bearing client bank account.  All interest earned on such money will be paid to you.  Subject to any tax legislation, interest will be paid gross.

If there are grounds to suspect (even if we do not actually suspect) that any monies held in a client account is derived directly or indirectly from any criminal activity whatsoever, we may not release such monies until we receive permission to do so from SOCA.

Fees

Our fees are computed on the basis of time spent on your affairs and the responsibility and skill involved by the partners and staff of this firm.  Unless otherwise agreed, our fees will be billed on
approval of the final accounts

Unless specifically agreed, payment of our invoices is due within 30 days from the date of the invoice.

Ownership of records

In the event of non-payment of our fees for services rendered, we may exercise a particular right of lien over the books and records in our possession and withhold the documents until such time as payment of our invoice is received in full.

File destruction

Whilst certain documents may legally belong to you, unless you tell us not to, we intend to destroy correspondence and other papers that we store which are more than seven years old, other than documents which we think may be of continuing significance.  If you require the retention of any document, you must notify us of that fact in writing.

Ethical guidelines

We will observe the ethical guidelines of the Association of Accounting Technicians and accept instructions to act for you on the basis that we will act in accordance with those guidelines.  A copy of these guidelines will be supplied to you on request.

Customer service

We are committed to providing a high standard of customer service.  If you have any ideas as to how our service to you could be improved, or if you are dissatisfied with the service you are receiving, please let us know.  In the event that you have a complaint, we will look into this carefully and promptly and do all we can to explain the position to you or address your concerns.  If you are still not satisfied you may of course make a complaint to the Association of Accounting Technicians.

Third parties

All accounts, statements and reports prepared by us are for your exclusive use within your business or to meet specific statutory responsibilities.  They should not be shown to any other party without our prior consent.

No third party shall acquire any rights pursuant to our agreement to provide professional services.
 

Applicable law

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 an inappropriate forum, or to claim that those courts do not have jurisdiction.

Disclaimer

We will not be liable for any loss suffered by you or any third party as a result of our compliance with the Anti Money Laundering Legislation or any UK law or at all.

Agreement of terms

Once agreed, this letter will remain effective from the date of signature until it is replaced.  Either party may vary or terminate our authority to act on your behalf at any time without penalty.  Notice of termination must be given in writing.

Would you please confirm your agreement to the terms set out in this letter by signing and returning the enclosed copy.  If anything is unclear to you or you require any further information please let me know.

Yours faithfully

We* confirm that we* have read and understood the contents of this letter and agree that it accurately reflects the services that we* have instructed you to provide.

Signed: …………………………………….  Dated: …………………………..

Signed: ……………………………………. *  Dated: ………………………….. *
       For and on behalf of the Board.*
 

PERSONAL TAX – INDIVIDUALS AND SOLE TRADERS

[Your spouse is legally responsible for [his/her] own tax affairs and should be dealt with independently.  However, if both spouses sign this letter you agree that we can disclose to your spouse such details of your financial affairs as are required to consider your combined tax position.]

(a) We shall be pleased to act as your personal tax advisers in the UK with effect from ……………………….

(b) We will prepare your personal income tax and capital gains tax return together with all supporting schedules and [prepare]/[check HM Revenue & Customs’ calculation of] your self-assessment of tax [and Class 4 National Insurance contributions].

(c) We will forward to you your tax return form [tax computations] and supporting schedules [in duplicate] [optional] for your approval and signature.  Once the return has been approved and signed by you and returned to us, we will submit it [with the computations] to the HM Revenue & Customs.  [You authorise us to file the return electronically.]

(d) We will advise you as to amounts of tax [and National Insurance contributions] to be paid and the dates by which you should make the payments, including payments on account and the balancing payment, and if appropriate we will initiate repayment claims when tax [and National Insurance contributions] appear[s] to have been overpaid.

(e) We will deal with HM Revenue & Customs regarding any amendments required to your return and prepare any amended returns which may be required.

(f) We will advise as to claims and elections arising from the tax return and from information supplied by you and, where instructed by you, we will make such claims and elections in the form and manner required by HM Revenue & Customs.

(g) You have asked us to undertake all correspondence with HM Revenue & Customs on your behalf.  To avoid any problems would you please send to us any forms or correspondence received from HM Revenue & Customs as soon as you receive them.  In particular would you please ensure that no payments are made to HM Revenue & Customs without our confirmation that the demands are correct.

(h) HM Revenue & Customs has powers to charge both interest and penalties if there is a delay in submitting a tax return.  Such charges are automatic if the tax return is submitted after 31st January following the end of the tax year, or if any payments are made after the respective due dates.

(i) It is therefore important that all details required for the preparation of your tax return are forwarded to us as soon as possible after 5th April each year and by 30th June at the latest.  If the information is received after that date, we will not accept responsibility for any penalties or surcharges charged by HM Revenue & Customs.

(j) HM Revenue & Customs audits a number of tax returns each year, many of these audits are the result of a random selection.  Assistance in respect of such an audit beyond the answering of straightforward queries regarding entries on the tax return is additional work and will result in separate charges.  We will keep you fully informed before undertaking any extra work in respect of such an audit.

(k) We will provide our professional services outlined in this letter with reasonable care and skill.  However, we will not be responsible for any losses, penalties, surcharges, interest or additional tax liabilities arising from the supply by you or others of incorrect or incomplete information, or your or others’ failure to supply any appropriate information or your failure to act on our advice or respond promptly to communications from us or the tax authorities.

(l) You agree that we can approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs.

(m) Please sign and return the enclosed HM Revenue & Customs form 64-8, which authorises HM Revenue & Customs to send us copies of formal notices.  In practice, HM Revenue & Customs will treat this as authority to correspond with us, in which case they will not correspond with you except to the extent that they are formally required to do so.  However, this authority does not apply to all HM Revenue & Customs correspondence, and even where it does, HM Revenue & Customs sometimes overlook it.  You should therefore always send us the originals or copies of all communications you receive from HM Revenue & Customs.

MAINTAINING ACCOUNTING RECORDS

 
 You have agreed that you or your staff will:

 (a) keep the records of receipts, payments and balances;
 (b) reconcile the balances monthly with the bank statements;
 (c) post and balance the purchase and sales ledgers;
 (d) extract a detailed list of ledger balances;
 (e) prepare details of the annual stocktaking and work in progress, suitably priced and extended in a form which will enable us to verify the prices readily by reference to suppliers’ invoices;
 (f) complete the postings to the nominal ledger; 

You/your management are responsible for the detection of irregularities and fraud.  We would emphasise that we cannot undertake to discover any shortcomings in your systems or any irregularities on the part of your employees or others, although we will advise you of any such circumstances that we encounter.