1. Provision of services as tax preparers: terms of engagement
These are the the formal terms of engagement under which we will provide our tax preparation services
This overview sets out the terms on which the Services will be provided. Please read all the information carefully and contact us if you have any concerns or require clarification.
In this overview, “we” and “us” and “our” relate to Hodgens Global Ltd (Company number SC627391) and “you” and “your” relate to you, the client.
2. Scope of Services
2.1 Our role is to provide the Services. By accepting the terms of this Engagement Letter, you are agreeing that the scope of Services is appropriate for your needs.
2.2 We will perform the Services with reasonable skills and care, but our duties and responsibilities shall be limited to the matters expressly referred to in this Engagement Letter.
2.3 The Services will be provided by Laurence Hodgens; however, we reserve the right to assign any other member of staff to provide the Services. We shall consult with you concerning any significant changes.
2.4 The Services to be provided, timescales and fees are discussed separately.
2.5 Any strategic business planning and tax advice covered by this engagement letter is based on current tax law. UK tax law, managed by HM Revenue and Customs, can often be subject to change. In some cases, these changes are retrospective.
You should only proceed where there is a strong commercial case to make to evidence that any changes to your business or personal circumstances is for commercial purposes and not for the avoidance of tax.
Only the services described in separate discussion are included within the scope of our instructions. Should additional work be required we will discuss with you whether they can be included in the scope of services or if a new engagement will be required.
Advice given by Hodgens Global Limited in relation to any proposals and transactions to be entered into will be based on the current tax legislation at the date of the advice given. No responsibility can be taken for any future changes in the legislation or case law that changes the law then or retrospectively.
3. Your Responsibilities
3.1 Where we assist any individual with the preparation of any tax declarations, you are legally responsible for:
Legal responsibility for approval of the return cannot be delegated to others. You agree to check that returns we have prepared for you are correct and complete before approving them.
You are no less responsible for errors in unapproved returns, submitted on the basis of the information provided to and processed by us, than if you had confirmed your approval of the returns.
3.2 You authorise us to file your tax return online.
3.3 To enable us to carry out our work you agree:
3.4 You must inform us in advance of any planned UK residential property sales and provide us with the information we require such as associated costs and valuations, to ensure that any capital gains tax liability can be calculated and reported to HMRC within 60 days of completion of the disposal. Where you consider that you will be non-UK resident in the tax year of disposal, full details of all UK property disposals, included disposals of shares in property-rich companies, must be advised prior to exchange of contracts on any property disposal.
It is your responsibility to pay any capital gains tax due to HMRC by this 60-day deadline.
3.5 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 please let us know so that we can assess the significance.
In particular, you may be liable to a ‘high income child benefit charge’ if, at any time during a tax year, you are entitled to child benefit or you have a partner who is entitled to child benefit. Please note that, for this purpose, ‘partner’ is wide ranging and includes not only spouses and civil partners (who are not separated) but a person (male or female) with whom you are living together as husband and wife or as civil partners. Where this applies, you will keep us informed of child benefit entitlement amounts and, where applicable, any changes to your relationship status with your partner.
3.6 HMRC will send you an agent authorisation code which expires within 30 days of issue. Please send this to us as soon as you receive it. This code will enable us to register as your agent with HMRC. This authorises HMRC to communicate with us as your agent, although they consider that you should still take ‘reasonable care’ over your tax affairs.
3.7 You will forward to us HMRC statements of account, copies of notices of assessment, letters and other communications received from HMRC in time to enable us to deal with them as may be necessary within the statutory time limits. Although HMRC have the authority to communicate with us, if relevant through the form 64-8, it is essential that you let us have copies of any correspondence received from HMRC because HMRC are not obliged to send us copies of all communications issued to you.
3.8 If a sole trader, you are responsible for monitoring your monthly turnover to establish whether you are liable to register for VAT.
3.9 You understand that the exchange of any data/documents through email poses a security risk. We do not claim any responsibility for such data if sent through email, as we utilise alternative secure methods for the storage and exchange of data.
4. Our responsibilities as your tax agent
4.1 Where you have property letting income, we will compute this income and expenditure on a cash or accruals basis as relevant (depending on whether an accruals election has been made), from the books, accounting records and other information and explanations provided to us by you or by others on your behalf.
4.2 We will prepare your self-assessment tax return (including if you have been treated as a deemed employee under the IR35 off payroll working rules) together with such supplementary pages that are required from the information and explanations that you provide to us.
4.3 Once we have obtained your evidenced approval, we will submit your returns to HMRC.
4.4 We will either calculate or check HMRC’ calculation of your income tax, national insurance contributions (NICs), and any capital gains tax liabilities.
4.5 Based on information you provide to us, we will calculate the capital gains tax liability on the disposal of any qualifying residential property, and will report this to HMRC, as well as informing you how much you should pay and by when.
4.6 With the exception of tax credits and universal credit we will advise you on possible claims and elections arising from the tax returns and from information supplied by you. Where instructed by you, we will make such claims and elections in the form and manner required by HMRC.
4.7 We will deal with all communications relating to your returns addressed to us by HMRC or passed to us by you. However, if HMRC choose any of your returns for enquiry this work may need to be the subject of a separate assignment in which case we will seek further instructions from you.
4.8 We will check PAYE notices of coding where such notices are forwarded to us and advise accordingly.
4.9 We are able to offer fee protection insurance to cover the cost of our fees arising from HMRC investigations. If you would like further details of this service, please let us know.
4.10 The scope of our services provided to you will be only as set out above and all other services which we may offer are excluded. If you instruct us to do so, we will also provide such other taxation ad hoc advisory services as may be agreed from time to time. These may be the subject of a separate engagement letter. We will discuss and agree our fee for such work when it is commissioned by you. Examples of such work would include:
4.11 Since 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.
4.12 Where specialist advice is required, we may need to seek this from, or refer you to, appropriate specialists.
4.13 If relevant, it is our policy to confirm in writing advice upon which you may wish to rely.
5. You and your spouse/partner, if relevant
5.1 We will advise you and your spouse/partner on the basis that you are a family unit. On this basis you both agree that in all matters relating to you or your spouse’s/partner’s tax we may deal directly with either of you, or we may discuss with either of you the tax liabilities of the other. If you wish to make any changes to these arrangements at any time, please let us know.
5.2 In order for us to act for you as a couple in respect of a joint claim, you undertake that all instructions, information or explanations either of you gives us will be on behalf of both of you, unless you specifically tell us otherwise. Similarly, if one of you signs a document, it will be on behalf of you both unless you instruct us to the contrary. If a conflict of interest should arise between you in relation to any matter to do with your joint claim or entitlement, we reserve the right to cease acting for both of you, or to advise one or other of you to obtain independent advice.
6. Ethical conduct
6.1 All CIMA management accountants work within the framework of the CIMA Code of Ethics (www.cimaglobal.com). The code requires accountants to comply with the principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.
6.2 As a CIMA management accountant we have a duty to observe the highest standards of conduct and integrity, and to uphold the good standing and reputation of the profession.
6.3 The duty of a professional accountant is not exclusively to satisfy the needs of an individual client or employer. In complying with the ethical requirements of the CIMA Code of Ethics the professional accountant is obliged to act primarily within the public interest.
7. Fees
7.1 An Annex 1 will list the Services we agree to supply together with the applicable fees (the ‘Fees’). Any additional work required which is not covered by these terms will be agreed with you and will result in a new Annex 1 being issued.
7.2 We shall render invoices in respect of Fees for the Services (including VAT thereon, if applicable). Payment of invoices rendered are due as stated on the invoice. Interest may be applied to any overdue accounts at a rate of 4% per annum above the Bank of England base rate, from time to time. Where payment has not been received, we reserve the right to withhold Services, documents and information, and have the right to cease to perform any further Services, and to terminate the Engagement if payments are unduly delayed;
7.3 If any Fees for the Services have been paid by you in advance, where the Engagement is terminated by you in circumstances other than our breach of the terms of this Letter of Engagement any such pre-paid fees will not be refunded to you.
7.4 Any expenses incurred whilst working on your behalf will be charged and appropriate records will be kept and will be available for inspection. Such expenses may include the use of meeting rooms and other facilities, internal printing, courier charges, and international but not national telephone calls.
7.5 Any ad-hoc services provided, beyond those detailed in Annex 1, may result in an additional fee of £250 per hour.
8. Retaining and Accessing Records
8.1 You have a legal responsibility to retain documents and records relevant to your tax affairs.
8.2 During the course of our work we may collect information from you and others relevant to your tax affairs. We will return any original documents to you if requested.
8.3 Documents and records relevant to your tax affairs are required by law to be retained by
individuals, trustees and partnerships, with trading or rental income, for five years and ten months, and other matters for 22 months, after the end of the tax year. Companies, LLPs and other corporate entities are obliged to meet a six-year requirement from the end of the accounting period.
8.4 Any information produced or relating to the work we undertake for you will be returned.
8.5 You agree that any work completed and work in progress for which payment is outstanding will be held by us until all Fees relating to it have been paid in full.
9. Confidentiality and conflicts
9.1 We agree never to share information relating to your business with any third party without prior consent, unless required to do so by law or to comply with regulations or quality control reviews. Likewise, you agree not to use or copy or allow use of the output of the Services carried out for you with a third party without our prior permission.
9.2 You recognise that we may have to stop providing the Services if a conflict should arise between our duties to you and to another client. You will notify us if you have any reason to believe that such a conflict has arisen or may arise.
9.3 We may communicate with you electronically and you accept the risks associated with such communications, except anything arising through our negligence or wilful default.
10. Legislation and compliance
10.1 We are obliged by law to undertake checks to ensure that you and your business are operating lawfully. By agreeing to our terms of engagement you accept that we are authorised to complete such checks as necessary.
10.2 Under Money Laundering Regulations it is a criminal offence if we do not report suspicious transactions or if we inform a client that a report has been made against them.
10.3 We have a duty under Section 330 of the Proceeds of Crime Act 2002 to report to the National Crime Agency (NCA) if we have reasonable cause to suspect any money laundering or other criminal activity in any transaction. A report of any such activity to NCA must be made without the client’s knowledge or consent. We cannot inform the client that we are submitting a report to NCA as this would constitute ‘tipping off’ which is a criminal offence.
11. Liability
11.1 As Chartered Management Accountants, we have a duty of care to you and we must observe the highest standards of conduct and integrity. Our services to you will only be completed by an accountant fully competent to perform such work and who is covered by a current policy of Professional Indemnity Insurance.
11.2 Where any loss or damage occurs as the result of you providing misleading, incomplete or false information, or any other breach of paragraph 3.2 of this Letter of Engagement, no liability will be accepted.
11.3 The advice we give you is specific to you and your circumstances and not to be used by a third party without our prior written consent. We also accept no legal responsibility from third party use of the financial information provided by us.
11.4 You agree that our aggregate liability to you, of whatever nature whether in contract, tort or otherwise for any loss whatsoever and howsoever caused by or arising from the performance of the Services or the Engagement, shall not exceed £1,000,000 or, if greater, five times the total of fees invoiced under this Engagement Letter.
11.5 Where any loss is suffered by you for which we would otherwise be jointly and severally liable with any third parties, the extent to which such loss shall be recoverable by you from us, as opposed to the third party, shall be limited so as to be in proportion to our contribution to the overall fault for such damage or loss, as agreed between the parties, or in the absence of agreement, as finally determined by a court of competent jurisdiction (ignoring for these purposes the ability of the third party to pay or any limitation of liability that you might have agreed with such third party).
11.6 If we provide you with details of any third party providing any taxation advice or financial strategies, you hereby acknowledge and agree that we shall not be liable to you for (i) the performance of any services offered by such party; or (ii) any loss suffered by you incurred directly or indirectly by following any advice offered by such party.
12. Data Protection
12.1 Hodgens Global Ltd have a duty to protect your personal data and have strict policies and procedures in place to ensure the safety of your personal data. Our Client Privacy Policy is to be read alongside these Terms of Engagement.
13. Complaints and disputes
13.1 We want you to be entirely satisfied with the services provided to you. If you are not, please refer to the Complaints Handling Procedure at Annex 2 of this letter. Any disputes arising from our Engagement will, subject to the procedure at Annex 2, be governed by the laws of Scotland.
14. Client Money
We will not hold assets belonging to you or any of our clients.
Fees paid in advance for agreed services to be provided are not considered client money and we will not be required to offset these against our fees.
Investment business is regulated under the Financial Services and Markets Act 2000.
If you are seeking advice on investments, including insurances, we may have to refer you to someone who is authorised by the Financial Conduct Authority or the Prudential Regulation Authority or licensed by a Designated Professional Body as we are not authorised to give such advice.
From time to time, we or another connected business may receive a commission or other benefit because of an introduction to another professional or a transaction arranged for you.
If this occurs, we shall account to you for the commission, which means you will be notified in writing of the terms and payment of the commission or benefit.
You agree that we can retain such commissions or benefits.
17. Continuity Arrangement
17.1 In the event that we become unable to provide the services agreed through incapacity or death, a Continuity Arrangement has been made with Steve Bicknell of Bicknell Business Advisers Ltd, 40 Broadway Lane, Bournemouth, Dorset, BH8 0AA. The purpose of this agreement is to look after your interests by providing continuity of services. You will be contacted in the event of such circumstances arising and you will have the option to decline to be covered by these arrangements.
17.2 If you choose to take up the services of Bicknell Business Advisers Ltd under the continuity arrangement, they will be provided under new terms of engagement set by Bicknell Business Advisers Ltd which will not necessarily match the terms of this agreement and may include a different pricing structure.
17.3 If we recover from incapacity and you have opted to accept the continuity arrangement with Bicknell Business Advisers Ltd, it is your choice whether to continue with Bicknell Business Advisers Ltd or return to Hodgens Global Ltd.
18. Termination
18.1 You or we may terminate our engagement by giving 21 days written notice except where you fail to cooperate with us or we have reason to believe that you have provided us or HMRC with misleading information, in which case we may terminate this agreement immediately. Termination will be without prejudice to any rights that may have accrued to either party prior to termination.
18.2 In the event of termination of this contract, we will endeavour to agree with you the arrangements for the completion of work in progress at that time, unless we are required for legal or regulatory reasons to cease work immediately. In that event, we shall not be required to carry out further work and shall not be responsible or liable for any consequences arising from termination.
ANNEX 1
CIMA Member in Practice
1.1 We Hodgens Global Ltd are committed to upholding best practice through high quality service to all our clients. This Annex sets out the procedure we will operate in dealing with complaints arising from the provision of Services under our Letter of Engagement.
2.1 In the first instance please contact Laurence Hodgens, [email protected], +44(0)7932953260 to discuss any concerns you have, to allow the matter to be addressed immediately.
3.1 An informal complaint can be made by telephone, or by speaking, face to face or in writing to Laurence Hodgens, [email protected], +44(0)7932953260. If the matter is not resolved at this stage, and you have not already issued a complaint in writing, you should do so. Please include specific details so that the matter can be thoroughly investigated.
4.1 Upon receipt of your written formal complaint an acknowledgement will be sent to you within 5 working days. The name and contact details of the person who will be dealing with your case will be supplied to you at this point.
4.2 Within 10 working days from receipt of your written complaint you will receive in writing a summary of our understanding of your complaint. You will be asked at this time to provide any further evidence or information regarding the complaint and to confirm that we have understood all your concerns.
4.3 Following such confirmation, we will investigate the matter and write to you in reply within 5 working days unless it becomes apparent to us that the investigation may not be completed within this timescale. In these circumstances, a written explanation will be sent to you including a progress report. When a substantive reply is sent to you, a summary of findings will be included along with details of any further action to be taken.
5.1 For service-related matters involving a CIMA member in Practice in the UK, you may wish to know that CIMA offers an independent Alternative Dispute Resolution (ADR) facility for members of the public.
5.2 If in the context of your dealings with us or the handling of your complaint, you believe that a member of CIMA has been guilty of misconduct, you may lodge a complaint with the Professional Conduct department of the Institute.
5.3 Further information on ADR or making a complaint about alleged misconduct can be found on the CIMA website at www.cimaglobal.com.