Terms Of Business

The following terms of business apply to all engagements accepted by Independent Taxation and Web Services T/A Balloon Accounting. All work is carried out under these terms except where changes are expressly agreed in writing between us.

 

Applicable law

Our engagement letter, the schedules of services and our standard terms and conditions of business are governed by, and should be construed in accordance with English law. Each party agrees that 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 on any basis. Each party irrevocably waives any right 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.

 

Nature of Services

 

A. ANNUAL ACCOUNTS – SOLE TRADERS/PARTNERSHIPS

 Your responsibility for the preparation of accounts

 1. You have undertaken to make available to us, as and when required, all the accounting records and related financial information necessary for the compilation of the accounts.  You will make full disclosure to us of all relevant information.  The accounts need to be approved by you before we are able to issue our report.

2. You are responsible for ensuring that, to the best of your knowledge and belief, financial information, whether used by the business or for the accounts, is reliable.  You are also responsible for ensuring that the activities of the business are conducted honestly and that its assets are safeguarded, and for establishing arrangements designed to deter fraudulent or other dishonest conduct and to detect any that occur.

3. You are responsible for ensuring that the business complies with the laws and regulations applicable to its activities, and for establishing arrangements designed to prevent any non-compliance with laws and regulations and to detect any that occur.

 

Our responsibilities for the preparation of accounts

1. We will compile your annual accounts based on the accounting records [maintained by you] and the information and explanations given to us by you.  We shall prepare draft annual accounts for your approval.

2. We will advise you as to the adequacy of your records for preparation of the annual accounts and make recommendations for improvements which we consider necessary.  We shall not be responsible if, as a result of you not taking our advice, you incur losses or penalties.

3. We will use reasonable skill and care in the preparation of your accounts but will not be responsible for errors arising from incorrect information supplied by you.

4. We will report, with any variations that we consider may be necessary, that in accordance with your instructions and in order to assist you to fulfill your responsibilities, we have compiled, without carrying out an audit, the accounts from your accounting records and from the information and explanations supplied to us.

5. We have a professional duty to compile accounts which conform with generally accepted accounting principles.  Where we identify that the accounts do not conform to accepted accounting principles, or if the accounting policies adopted are not immediately apparent, this will be made clear in our report, if it is not clear in the accounts.

 

B. ANNUAL ACCOUNTS – LIMITED COMPANIES

 Responsibilities of Directors

 

As director of the company, under the Companies Acts you are responsible for:

  • Ensuring that the company maintains proper accounting records and for preparing accounts
  • Determining whether for any reason the exemption is not available in respect of the period.

You will keep records of sales invoices, purchase invoices, receipts and payments, together with any other documents relating to the company’s transactions and activities.  It will also be necessary for you to provide a record of stock at the company’s year-end.

 

A private company is usually required to file its accounts at Companies House within 9 months of the year end.  The company will be liable to a fine if it fails to do so.  In order to avoid this we will produce statutory accounts, suitable for filing, within the required period, provided all your records are complete and presented to us within two months of the year end, and all subsequent queries are promptly and satisfactorily answered.

We have agreed to act as your agent and to:

(a)        submit the accounts to the Registrar of Companies;

(b)        complete and submit the company’s annual return;

(c)        complete and submit any other forms required by law to be filed at Companies House, provided that you keep us fully informed of any relevant changes or events which are required to be notified to Companies House, within one week of the change or event;  and

(d)        maintain the statutory books.

 

Or

You have agreed to complete all the returns required by law, for example, the annual return and the notification of changes in directors.  We shall, of course, be pleased to advise you on these and any other company secretarial matters if requested.

 

Responsibility of the accountants

In relation to the accounts, we will prepare the company’s accounts on the basis of the information that is provided to us.  We will also draft the accounts in accordance with the provisions of the Companies Act, and related Accounting Standards for approval by the Board.

 

Should our work lead us to conclude that the company is not entitled to exemption from an audit of the accounts, or should we be unable to reach a conclusion on this matter, then we will advise you of this.

You have agreed that you or your staff will:

(a)        keep the records of receipts 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;  and

(e)        prepare details of the annual stocktaking, suitably priced and extended in a form which will enable us to verify the prices readily by reference to suppliers’ invoices.

 

 Or

 

(f)        provide us with a copy of the valuation produced by your independent stock-takers.

 

And

(g)        prepare details of work-in-progress at the accounting date and make available to us the documents and other information from which the statement is compiled.

 

If you have instructed us to undertake the record keeping you will supply us with all available data to enable us to fulfil the above requirements.

 

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 in preparing your accounts, unless prohibited from doing so by the Anti Money Laundering Legislation.

 

We will report, with any variations that we consider may be necessary, that in accordance with your instructions and in order to assist you to fulfil your responsibilities, we have compiled, without carrying out an audit, the accounts from your accounting records and from the information and explanations supplied to us.

 

We have a professional duty to compile accounts which conform with generally accepted accounting principles.  Furthermore, the accounts of a limited company are required to comply with the Companies Acts and applicable accounting standards.  Where we identify that the accounts do not conform to accepted accounting principles, or if the accounting policies adopted are not immediately apparent, this will be made clear in our report, if it is not clear in the accounts.

 

C.  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 the Letter of Engagement incorporating these Terms of Business 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. 

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

(c)  We will forward to you your tax return form, supporting schedules and tax computations for your approval.  Once the return has been approved it will be submitted to HMRC by electronic or whatever means we deem appropriate.

(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.

(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 15th January 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)  You agree to complete and sign a HM Revenue & Customs form 64-8, which authorises HM Revenue & Customs to send us copies of formal notices and to allow us access to your tax records.  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.

 

Or

 

(a) You have not asked us to become involved in your tax affairs with regard to income tax.  Should you require it we can offer advice on the operation of all aspects of income tax.

(b)  We will be pleased to advise on any other taxation matters referred to us and would strongly encourage you to approach us before entering into any complex or unusual transactions in order that we can assess their tax implications.

 

D.  PARTNERSHIP TAX

(a)  We will prepare the income tax and capital gains tax computations based on the partnership accounts from the accounting records and other information and explanations provided by you.

(b)  We will prepare the firm’s annual partnership return, including the partnership statement of total income, gains, losses, tax credits and charges of the firm for each period of account ending in the return period.

(c) Once the return has been approved we will submit it, with the accounts and computations, to HM Revenue & Customs. by electronic or whatever means we deem appropriate.

 (d) We will advise all the partners who were partners of the firm during the period of their respective shares of the firm’s total income, gains, losses, tax credits and charges in order that they are able to file their personal self-assessment tax returns within the relevant time period.

 (e) We will deal with HM Revenue & Customs regarding any amendments required should the partnership self-assessment tax return be challenged.

(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) We will deal with all communications relating to the partnership return addressed to us by HM Revenue & Customs or passed to us by you.  However, if HM Revenue & Customs choose the partnership tax return for enquiry, this work will be the subject of a separate assignment and we will seek further instructions from you.  Assistance in respect of such an enquiry 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 enquiry.

(h) You have asked us to undertake all correspondence with HM Revenue & Customs on the partnership’s 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.

(i) HM Revenue & Customs have 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.  For partnership penalties, the amount due is multiplied by the number of partners.  Delays in submitting the partnership return may also have an effect on the returns of all the partners, with the possibility of penalties, interest and surcharges being payable by each individual partner.

(j) 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 1st January 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.

(k) You agree that we can approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs and undertake to authorise such third parties to communicate directly with us.

(l)  You agree to complete and sign HM Revenue & Customs form 64-8 which authorises HM Revenue & Customs to send us copies of formal notices and gives us access to the tax affairs of the Partnership.  In practice, HM Revenue & Customs will treat this as authority to correspond with us, in which case they will not correspond with the partnership 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.

 

 Or

 

(a) You have not asked us to become involved in your tax affairs with regard to income tax.  Should you require it we can offer advice on the operation of all aspects of income tax.

(b) We will be pleased to advise on any other taxation matters referred to us and would strongly encourage you to approach us before entering into any complex or unusual transactions in order that we can assess their tax implications.

 

E.  CORPORATION TAX

We will prepare, in respect of each accounting period of the company, a computation for corporation tax purposes adjusted in accordance with the provisions of the Taxes Acts.  We will also prepare the corporation tax return (form CT600) required under the Corporation Tax Self-Assessment regulations.  The corporation tax return, together with the supporting corporation tax computations, will be submitted to HMRC once agreed by the Company / Director.

 

It should be recognised that in law a taxpayer cannot contract out of his fiscal responsibilities and that computations and return forms are prepared by us as agent for the company.  You are legally responsible for making correct returns and for payment of tax on time.  If we ask you for information to complete the tax return and it is not provided within the time-scale requested, so that the preparation and submission of the return are delayed, we accept no responsibility for any penalty or interest that may arise.

 

We will advise you of the corporation tax payments to which the company will be liable, together with the due date of payment.  You must inform us immediately if the company pays or receives any interest or makes any other payment, or transfers any asset to any shareholder.

 

Where necessary we will deal with any queries raised by the Inspector of Taxes and negotiate with the Revenue on any question of taxation interest or penalties which may arise.

 

To enable us to carry out our work you agree:

 

(a)  To make a full disclosure to us of all sources of income, charges, allowances and capital transactions and to provide full information necessary for dealing with the company’s affairs.  We will rely on the information and documents being true, correct and complete;

(b) To respond quickly and fully to our requests for information and to other communications from us;

(c) To provide us with information in sufficient time for the company’s self-assessment tax return to be completed and submitted by the due date.  

(d)  To forward to us on receipt copies of all statements of account, letters and other communications received from HM Revenue & Customs to enable us to deal with them as may be necessary within the statutory time limits.

 

You agree that we can approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs and undertake to authorise such third parties to communicate directly with us.

 

You have agreed as Company / Director to complete and sign HM Revenue & Customs form 64-8, which authorises HM Revenue & Customs to send us copies of formal notices and access to the Company tax affairs.  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.

 

Or

 

You have not asked us to become involved in your tax affairs with regard to corporation tax.  However, we can offer advice on all aspects of corporation tax, should you so require.

 

We will be pleased to advise on any other taxation matters that may be referred to us and would strongly encourage you to approach us before entering into any complex or unusual transactions in order that we can assess their tax implications.

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