6 November 2020

Personal Tax / Sole Trader / Partnerships Accounts – individuals AND Couples


This schedule should be read in conjunction with the engagement letter and the standard terms and conditions.


Our service to you

[We will prepare your business accounts in accordance with generally accepted accounting practice from your books and records and from information and explanations provided by you.]

We will not be carrying out any audit work as part of this assignment and accordingly will not verify the assets and liabilities of the business, nor the items of expenditure and income. To carry out an audit would entail additional work so that we could report on the truth and fairness of the accounts. We would also like to emphasise that we cannot undertake to discover any shortcomings in your systems or irregularities on the part of your employees.

We have a professional duty to compile accounts that conform with generally accepted accounting principles. Where we identify that the accounts do not conform to accepted accounting principles nor to the specific rules relating to the cash accounting regime, we will inform you and suggest amendments be put through the accounts before being published. We have a professional responsibility not to allow our name to be associated with accounts that may be misleading. In extreme cases, where this matter cannot be resolved, we will withdraw from the engagement and notify you in writing.

[To ensure that anyone reading the accounts is aware that we have not carried out an audit, we will attach to the accounts a report stating this fact.

We will attach to the accounts a report developed by the Consultative Committee of Accountancy Bodies (CCAB) which explains what work has been done by us, the professional requirements we fulfil and the standard to which the work has been carried out. You can obtain further information from the Association of Chartered Certified Accountants about:

  1. The technical guidance for the work, and
  2. The related ethical and other professional requirements.

The intended user of the report is the proprietor. The report will be addressed to the proprietor.]

Our responsibility to you

We have set out the agreed scope and objectives of your instructions within the letter of engagement. Any subsequent changes will be discussed with you and where appropriate a revised schedule of services will be agreed. We shall proceed on the basis of the instructions we have received from you and will rely on you to tell us as soon as possible if anything occurs which renders any information previously given to us as incorrect or inaccurate. We shall not be responsible for any failure to advise or comment on any matter that falls outside the specific scope of your instructions. We cannot accept any responsibility for any event, loss or situation unless it is one against which it is the expressed purpose of these instructions to provide protection.

Your responsibility to us

The advice that we give can only be as good as the information on which it is based. In so far as that information is provided by you, or by third parties with your permission, your responsibility arises as soon as possible if any circumstances or facts alter, as any alteration may have a significant impact on the advice given. If the circumstances change therefore or your needs alter, advise us of the alteration as soon as possible in writing.


Our function as accountant is to act as agent on your behalf in preparing the accounts of your business for the year ended, as agreed in the engagement letter, and subsequent years.

This may involve:

[Writing up your books and records from the information and vouchers provided and preparing draft accounts for your approval.]

We have agreed that you will be responsible for:

  1. Maintaining records of all receipts and payments of cash.
  2. Maintaining records of invoices issued and received.
  3. Reconciling balances [quarterly/annually] with the bank statements.
  4. Preparing a record of business mileage undertaken in the year.
  5. Preparing a record of hours per month worked at home if you wish to claim for business use of your home.
  6. Preparing details of any loan interest paid.
  7. Preparing details of the following at the year-end: [stocks and work in progress; fixed assets; amounts owing to suppliers; amounts owing by customers; and accruals and prepayments].

Our report will be based on information gained from you, and we accept no responsibility for any losses arising out of implementing our report. Further, our report requires us to rely substantially on your representations. Therefore, we can accept no responsibility for any losses for issues not addressed in our report.

As part of our normal procedures we may request you to provide written confirmation of any oral information and explanations given to us during the course of our work.

Limitation of liability

Our services as detailed above are subject to the limitations on our liability set out in the engagement letter and in paragraph 18 of our standard terms and conditions of business. These are important provisions, which you should read and consider carefully.

[There are no third parties that we have agreed should be entitled to rely on the work done pursuant to this engagement letter.]

Other services

You may request that we provide other services from time to time. If these services will exceed £300, we will issue a separate letter of engagement and scope of work to be performed accordingly.

Because rules and regulations frequently change, you must ask us to confirm any advice already given if a transaction is delayed or a similar transaction is to be undertaken.

Personal Tax – individuals AND Couples

Recurring compliance work

  1. We will prepare your self-assessment tax returns together with any supplementary pages required from the information and explanations that you provide to us. After obtaining your approval, we will submit your returns to HMRC. 
  • We will calculate your income tax, high-income child benefit charge (if applicable), national insurance contributions (NIC) and any capital gains tax liabilities as included on your self-assessment return and tell you how much you should pay and when. Where instructed by you we will advise on the interest and penalty implications if tax or NIC is paid late. We will also check HMRC’s calculation of your tax and NIC liabilities, and initiate repayment claims if tax or NIC has been overpaid.
  • Other than tax credits and universal credit (see below), we will advise you as to possible tax return-related claims and elections arising from information supplied by you. Where instructed by you, we will make such claims and elections in the form and manner required by HMRC.
  • We will review PAYE notices of coding provided to us by you and advise accordingly. Note HMRC no longer sends copies of notices of coding to agents.
  • [Ad hoc queries by way of telephone and email enquiries are not routine compliance and may result in additional fees. As indicated below, where appropriate we will aim to discuss and agree additional fees, but it may not always be possible to agree these in advance and we reserve the right to charge you an additional fee for these queries.]

Ad hoc and advisory work

  • Where you have instructed us to do so we will provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These services will be subject to the terms of this engagement letter and standard terms and conditions of business unless we decide to issue a separate engagement letter. An additional fee may be charged for these services.  Examples of such work include:
  • advising on the in-year Capital Gains Tax (CGT) reporting requirements on disposals of property and preparing the in-year return and calculating the CGT due where required [note this work will always result in additional fees].  We will require you to provide information as early as possible in advance of exchange of contracts in order to provide advice on the tax implications, reporting requirements and to quantify the tax bill;
  • advising on ad hoc transactions (for example, pre-sale advice on the sale of assets) and queries (including telephone conversations), preparing and submitting information in the relevant format to HMRC and calculating any related tax liabilities;
  • advising on extraction of cash from your personal service company and completion of tax returns if you have been treated as a deemed employee under the IR35/off-payroll working rules;
  • advising on double tax relief if appropriate;
  • dealing with any enquiry opened into your tax return or tax affairs by HMRC;
  • preparing any amended returns that may be required and corresponding with HMRC as necessary; and
  • advising on tax credits and universal credit.
  • Where specialist advice is required, we may need to seek this from or refer you to appropriate specialists.  We will only do this when instructed by you.

Tax credits and universal credit

  • If we agree to advise you on tax credits and universal credit, we will issue a separate letter or schedule to cover this area. Tax credits and universal credit are, in effect, a social security benefit.  Your entitlement or otherwise will depend not only on your own circumstances but also those of your household, and we would require all relevant information to advise in this regard.       

Changes in the law or practice or in public policy

  • We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law or practice or in public policy or your circumstances.
  1. We will accept no liability for losses arising from changes in the law or practice or in public policy that are first published after the date on which the advice is given.

Your responsibilities

  1. You are legally responsible for:
  • ensuring that your self-assessment tax returns are correct and complete;
  • filing any returns by the due date; and
  • paying tax on time.

Failure to do this may lead to penalties and/or interest.

  1. Taxpayers who approve their returns cannot delegate this legal responsibility to others. You agree to check that returns that we have prepared for you are complete before you approve them.

To enable us to carry out our work you agree:

  • that all returns are to be made on the basis of full disclosure of all sources of income, charges, allowances and capital transactions;
  • to provide all information necessary for dealing with your affairs: we will rely on the information and documents being true, correct and complete, and will not audit the information or those documents;
  • to authorise us to approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs;
  • to provide full details of all UK residential property disposals including associated costs/valuations prior to disposal.  Where you consider that you will be non-UK resident in the tax year of disposal, full details of all UK property disposals (residential and non-residential) and disposals of shares in UK property rich companies or UK property rich collective investment vehicles, or other such entities must be advised prior to exchange of contracts or agreement to transfer shares or units.   If information is received after this we cannot guarantee that we can provide advice on the amount of capital gains tax due or submit an in-year return within 30 days after the completion date of the disposal; and
  • to provide us with information in sufficient time for your tax return to be completed and submitted by the [due date]/[selected date] following the end of the tax year. In order that we can do this, we need to receive all relevant information by [   ]. Where feasible we may agree to complete your return within a shorter period but may charge an additional fee of £[   ] for so doing.
  1. You will keep us informed of material changes in your circumstances that could affect your tax liability. If you are unsure whether the change is material or not, please let us know so that we can assess its significance.
  1. Where you wish us to deal with HMRC communications, you will forward to us all communications received from HMRC such as HMRC statements of account, copies of notices of assessment, tax codes and letters. These must be provided in time to enable us to deal with them as may be necessary within the statutory time limits. It is essential that you let us have copies of any correspondence received because HMRC is not obliged to send us copies of all communications issued to you.
  2. [You are responsible for employment taxes, pensions (including auto-enrolment) and the assessment of the tax status of your workers, including domestic staff. If you do not understand what you need to consider or action you need to take, please ask us. We will not be in a position to assist you in complying with your responsibilities if we are not engaged to provide such a service. We are not responsible for any penalty that is incurred.]
  1. Our services as detailed above are subject to the limitations on our liability set out in the engagement letter and in paragraph 18 of our standard terms and conditions of business. These are important provisions, which you should read and consider carefully. 

[You and your spouse/partner]

[For use where services are provided to a couple]

  1. [We shall advise you and your [spouse/partner] on the basis that you are a family unit. You agree that in all matters relating to you or your [spouse’s/partner’s] tax and financial affairs, we may deal directly with either of you and we may discuss with either of you the tax liabilities and/or financial affairs of the other. If you wish to make any change to these arrangements at any time, please let us know.]
  2. [You undertake that all instructions, information or explanations either of you gives us will be on behalf of both of you.]

KiQi Chartered Certified Accountants