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Anti money laundering legislation

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All accountants must comply with the Proceeds of Crime Act 2002, the Terrorism Act 2000 and the Money Laundering Regulations 2017 (the “Anti Money Laundering Legislation”), which are intended to stop the activities of terrorists and other criminals by preventing them using accountancy services. If we do not comply with this legislation, we risk imprisonment.

Before we can act for your company, we have to confirm the identity of the directors. At any time we may also need to obtain evidence confirming the identities of third parties, the source of any money or funding of property or other assets, and other matters.

We assume that our clients are honest and law abiding. However, if at any time we have grounds to suspect that crime is being committed, we are obliged to make a report to the National Crime Agency (NCA). We are prohibited by the legislation from telling you that we have done this. In such circumstances, we cannot do any work for your company without consent from NCA.

‘Criminal property’ is money, property, other assets, rights or any benefit derived from criminal activity. Activity is considered ‘criminal’ if it is a crime under UK law, no matter how trivial. Tax evasion is a criminal offence but an honest mistake is not.

It does not matter who carried out the criminal activity. 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.

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.

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Client monies

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We may, from time to time, hold money on your behalf. Such money will be held in trust in a client bank account, separate from our funds.

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

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Fees

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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 charged separately for each main class of work and will be billed at appropriate intervals during the course of the year. Hourly rates are available on request.

We may agree to invoice you monthly for a proportion of your fees in which case these will be payable on a monthly standing order. These standing order payments will be applied to fees for work agreed in this letter of engagement.

If invoices are not subject to payment by standing orders, our terms for such invoices are strictly 7 days net. Interest will be charged on all overdue debts at the rate stated on the invoice or, at the rate applicable under the Late Payment of Commercial Debts (Interest) Act 1998, whichever is the higher.

Should you have any disagreement concerning a fee, this must be notified to us within 7 days of the invoice date. In the absence of such notification, you are deemed to have accepted the invoice and it is payable in full accordance with our normal terms.

If this letter of engagement covers work for a limited company and the company is unable to meet our fees as and when they fall due them the company’s directors will be personally, jointly and severally liable in respect of our outstanding fees.

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Commissions or other benefits

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While we will notify you of any commissions received, you agree that we may retain any such commissions.

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Ownership of records

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In the event of non-payment of our fees, we may exercise a 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.

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File destruction

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Correspondence and other papers that we may hold older than 6 years will be destroyed unless you request their return in writing. Documents can be collected FOC but a fee will be charged for returning documents by post.

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Customer service

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We are committed to providing a high standard of customer service. We welcome suggestions on how our service to you could be improved. We hope that you will not have the need to complain but if you do, we will look into your complaint carefully and promptly and do all we can to explain the position to you and address your concerns.

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Third parties

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All accounts, statements and reports prepared by us are for your exclusive use within your business or to meet specific statutory responsibilities.

No third party shall acquire any rights under this agreement to provide professional services.

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Applicable law

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This engagement letter is governed by, and construed in accordance with the law of the relevant UK jurisdiction as determined by law. Each party irrevocably waives any right it may have to object to any action being brought in Courts of the relevant jurisdiction.

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Agreement of terms

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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 for you 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. If anything is unclear to you or you require any further information please let us know.

 

ANNUAL ACCOUNTS – LIMITED COMPANIES

 

Responsibilities of Directors

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As director of the company, under the Companies Acts you are responsible for ensuring that the company maintains proper accounting records and you are ultimately responsible for preparing accounts.

You undertake to 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.

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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 fines 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 five months of the year end, and all our queries are promptly and satisfactorily answered.

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You will complete all other returns required by law, for example, confirmation statements and notifications of changes in directors and Persons of Significant Control (PSC’s), unless you have asked us specifically to deal with these for you. We shall, of course, be pleased to advise you on these and any other company matters if requested.

Responsibility of the accountants

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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.

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1. write up the accounting records of the company insofar as they are incomplete when presented to us;

2. complete the postings to the nominal ledger; and

3. prepare the accounts for approval by yourselves.

You agree that you will arrange to:

1. keep the records of receipts and balances;

2. reconcile the balances monthly with the bank statements;

3. post and balance the purchase and sales ledgers;

4. extract a detailed list of ledger balances; and

5. prepare details of the annual stocktaking, including prices and in a form which will enable us to verify the prices readily by reference to suppliers’ invoices.

6. 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.

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You are responsible for the detection of irregularities and fraud. We do not 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 that we encounter in preparing your accounts, unless prohibited from doing so by the Anti Money Laundering Legislation.

We will report 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.

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We have a professional duty to compile accounts which conform with generally accepted accounting principles and which comply with the Companies Acts and applicable accounting standards.

 

BOOKKEEPING

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It is agreed that we should carry out the following accounting and other services:

1. keep the records of receipts, payments and balances;

2. reconcile the balances monthly with the bank statements;

3. post and balance the purchase and sales ledgers;

4. extract a detailed list of ledger balances;

5. 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;

6. complete the postings to the nominal ledger;

 

You 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 that we encounter.

 

CORPORATION TAX

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We will prepare a computation for corporation tax purposes adjusted in accordance with the provisions of the Taxes Acts. We will also prepare and file the corporation tax return (form CT600) required under the Corporation Tax Self Assessment regulations within 12 months of the year end. The corporation tax return, together with the supporting corporation tax computations, will be sent to you for approval and signature prior to submission to the Inspector of Taxes.

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You accept 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 also accept that 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.

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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 transfers any asset to any shareholder.

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

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Any time we need to spend over and above answering straightforward queries raised by the HM Revenue & Customs is additional work for which we will need to charge separately. We will inform you before undertaking any extra work in respect of HM Revenue & Customs enquiries.

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To enable us to carry out our work you agree:

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1. 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;

2. to respond quickly and fully to our requests for information and to other communications from us

3. 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. In order to do this, we need to receive all relevant information within 5 months of the year end; and

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

5. 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.

 

PAYROLL PREPARATION AND PAYE

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Payroll and year end returns

In order for us to prepare your payroll and HMRC payroll returns known as Real Time Information (RTI) returns we will need the following information from you:

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Personal details of all employees (i.e. name, NI number, home address,) and other data as required by HMRC.

Notification of new employees or employees leaving your employment.

All P45's received by you.

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• If no P45 is received, you are required to provide Starter Check Lists, or equivalent, and pass that information to us for processing.

• Notification of any employee who is ill for four or more calendar days, including weekends, bank holidays etc in time for the operation of payroll to enable us to operate statutory sick pay for you.

• Notification of any employee who becomes pregnant or who adopts, or whose partner becomes pregnant or adopts. This will enable us to operate statutory maternity, adoption and paternity pay.

• Details of any money or benefits made available to employees which arise directly or indirecty from their employment with you whether by you or by a third party.

• Hours worked, rates of pay, bonuses, the amount of any pension deductions, etc.

• Any notice of coding received by you.

 

Payroll returns must be received by HM Revenue & Customs on or before pay day otherwise significant penalties may be charged. Interest will be charged by HMRC if income tax and National Insurance contributions payments are late or less than indicated by the return.

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We will assist in the preparation and submission of PAYE returns as required by HMRC and other authorities. However, our appointment as your agent does not absolve the company or its directors from their statutory responsibilities. It is essential that we receive full information from you promptly to enable us to file returns in time to avoid penalties.

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AUTO ENROLMENT

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In respect of the “Automatic Enrolment” of pensions you will need to seek the advice of a person who is regulated to provide pension’s advice. We will assist you in processing your payroll based on the pension details that you provide if you have asked us to provide this service.

 

VAT RETURNS

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We will prepare and file your VAT returns for the VAT Return [Missing Date: Please Contact Us] and all subsequent VAT Returns.

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We will not be responsible for any penalties or default surcharges arising from the late submission of VAT returns. However, we will endeavour to meet the relevant deadlines if we receive all the company’s VAT records within 14 days of the end of the VAT return period.

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You will ensure that:

1. all relevant VAT records are forwarded to us within 14 days of the end of the VAT return period;

2. valid VAT invoices are received for all payments where VAT is being reclaimed;

3. the VAT rating of the goods or services you supply (“supplies”) is correct, i.e. between standard rate, reduced rate, zero rate and exempt supplies;

4. we are notified in writing of any standard or reduced rate own consumption;

5. any non-business expenditure is clearly marked on supporting invoices;

6. all supplies made by the business are shown in the records made available to us.

 

If you deal with your own VAT returns, we will not be responsible for checking the VAT treatment of supplies made, the deductibility of input VAT and the validity of supporting invoices unless specifically requested in writing to make a detailed review, and will charge separately for this work.

If you are not VAT registered and VAT registration becomes necessary, we will endeavour to ensure that you register in time provided that:

• you notify us in writing within 14 days of the end of each month of the total value of supplies you have made in that month; and

• you notify us immediately in writing if the value of taxable supplies that you will make in the next 30 days is likely to exceed the annual registration limit.

 

You or, if a company, the company and its directors remain responsible for their VAT Returns.

There are strict rules and time limits for the submission of returns and substantial penalties may arise if these are not followed. It is therefore essential that we receive full information from you promptly to enable us to ensure that the returns are submitted in time. Returns will be sent to you for approval prior to submission.

 

MANAGEMENT ACCOUNTS

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We will prepare monthly management accounts for your business for the month ended [Missing Date: Please Contact Us] and subsequent months.

We will complete the management accounts from the records, information and explanations supplied to us and prepare draft accounts for your approval.

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You will be responsible for:-

1. maintaining records of all receipts and payments of cash;

2. reconciling cash book balances monthly with the bank statements;

3. posting and balancing the purchase and sales ledgers; and

4. extracting a detailed list of ledger balances.

You will also provide estimates of any stocks at the end of each period.

You understand that we will not be carrying out an audit and accordingly will not verify the assets and liabilities of the business, or expenditure and income.

The accounts will include a report that we have not carried out an audit. This report must remain attached to any accounts shown to any other parties.

We do not 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 that we encounter in preparing your accounts.

 

SUBCONTRACTORS

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You have asked us to operate the Construction Industry Scheme (CIS) for your subcontractors. To do this, we will need the following information from you as soon as the tax month (ending the 5th of the month) has finished:

• written confirmation that you have checked or ‘verified’ each new subcontractor with HM Revenue & Customs; and

• written confirmation of whether HM Revenue & Customs has advised that the subcontractor should be paid gross or net and if net, what tax rate.

 

It is your sole responsibility to establish the employment status of each and every one of your subcontractors. We cannot accept any liability in the event that HM Revenue & Customs challenges the employment status of one or more of your subcontractors or be held responsible for any loss or consequential loss as a result of any action or penalty imposed by HM Revenue & Customs.

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We will only advise on employment status if requested. Advice on employment status is additional work and will result in separate charges. We cannot give any form of guarantee or assurance that HM Revenue & Customs will not challenge the employment status of one or more of your subcontractors. We cannot accept any liability in the event that HM Revenue & Customs challenges the employment status of one or more of your subcontractors or be held responsible for any loss or consequential loss as a result of any action or penalty imposed by HM Revenue & Customs.

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CIS registration may be lost if returns are made late or tax is paid late. It is your sole responsibility to ensure you comply with the Construction Industry Scheme. We cannot be held responsible or liable for financial loss or consequential financial loss if your CIS registration is cancelled for late submission where we have not received all the necessary information as soon as the tax month has finished or for any late payment occurring as a result.

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We will provide a CIS service for the month ended [Missing Date: Please Contact Us] and all subsequent months.

 

P9D/P11D BENEFITS FOR DIRECTORS AND EMPLOYEES

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You have asked us to prepare forms P9D/P11D. To ensure these forms are correct, we will need details of all benefits, perks or reimbursed expenses received by the directors or employees.

There are penalties for the late submission of forms P9D/P11D. In order to avoid these, you must ensure that we receive complete and accurate details of all benefits and expenses for the tax year within 14 days of the end of the tax year.

 

DATA PROTECTION

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In this section:

• Data Controller, Data Processor, Data Subject, Personal Data, Personal Data Breach, international organisation and processing shall have the respective meanings given to them in the Data Protection Laws (and related expressions shall be construed accordingly).

• Data Protection Laws means any applicable law relating to the processing, privacy and use of Personal Data including: the General Data Protection Regulation (EU) 2016/679 (GDPR); and any laws which implement such laws; any laws that replace, extend, re-enact, consolidate or amend any of the foregoing (provided that the impact of any such replacement, extension or amendment is agreed in writing by the parties).

• Protected Data means Personal Data received from or on behalf of you or otherwise obtained in connection with the performance of our obligations under this letter of engagement.

• Sub-Processor means any agent, sub-contractor or other third party engaged by us (or by any other Sub-Processor) for carrying out any processing of the Protected Data.

 

Compliance with Data Protection Laws

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In the provision of the services to you, we are required to process your personal data and the personal data (and in some cases special categories of data) of your employees.

Where we are processing your employees’ personal data on your behalf, you are the Data Controller and we are the Data Processor. We shall process Protected Data in compliance with the obligations placed on it under this letter.

You shall at all times comply with the Data Protection Laws in connection with the processing of Protected Data. You confirm that that you are entitled to transfer the Protected Data to us and any Sub-Processor in compliance with the Data Protection Laws and shall ensure all instructions given by you to us in respect of Protected Data shall at all times be in accordance with the Data Protection Laws.

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Instructions

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We shall only process (and shall ensure our personnel only process) the Protected Data in accordance with this letter (including the Annex) (and not otherwise unless alternative processing instructions are agreed between us in writing) except where otherwise required by applicable law (and in such a case we shall inform you of that legal requirement before processing, unless such applicable law prohibits us from so notifying you).

If we believe that any instruction received by it from you is likely to infringe the Data Protection Laws we shall inform you and be entitled to cease to provide the relevant Services until we have agreed appropriate amended instructions which are not infringing.

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Security

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Taking into account the state of technical development and the nature of processing, we shall implement and maintain the technical and organisational measures set out in Part 2 of the Annex to protect the Protected Data against accidental, unauthorised or under lawful destruction, loss, alteration, disclosure and/or access.

Sub-Processing and Personnel

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You consent to our appointment of AccountancyManager Limited as a third party processor of Protected Data. We confirm we have entered into a written agreement with AccountancyManager Limited on its standard terms of business. 

We shall remain liable to you under this letter for all the acts and omissions of AccountancyManager Limited and each of its personnel as if they were our own and ensure that all persons authorised by us or any Sub-Processor to process Protected Data are subject to a written contractual obligation to keep the Protected Data confidential.

 

Assistance

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We shall (at your cost) assist you in ensuring compliance with your obligations pursuant to Articles 32 to 36 of the GDPR (and any similar obligations under Data Protection Laws) taking into account the nature of the processing and information available to us and assist you (by appropriate technical and organisational measures), insofar as this is possible, for the fulfilment of your obligations to respond to requests for exercising the Data Subjects’ rights under Chapter III of the GDPR (and any similar obligations under applicable Data Protection Laws) in respect of any Protected Data.

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We shall refer all requests and communications received from Data Subjects or any supervisory authority to you which relate to any Protected Data promptly (and in any event within 3 days of receipt) and shall not respond to any without your written approval and in accordance with your instructions unless and to the extent required by law.

 

International Transfers

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We shall not process and/or transfer, or otherwise directly or indirectly disclose, any Protected Data in or to countries outside the European Economic Authority unless your prior written consent has been obtained.

 

Records and Audit

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We shall, in accordance with Data Protection Laws, make available to you such information that is in its position or control as is necessary to demonstrate our compliance with our obligations under this letter of engagement. We shall permit audits by you (or another auditor appointed by you (provided such auditor has entered into a confidentiality undertaking with, and in terms reasonably acceptable to, us and such auditor is not our competitor) for this purpose, subject to a maximum of one audit in any 12 month period.

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Breach

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We shall notify you without undue delay and in writing on becoming aware of any Personal Data Breach in respect of any Personal Data.

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Deletion/Return

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On ceasing to provide the Services relating to the processing of Protected Data, at your cost and option, we shall either return all of the Protected Data to you or securely dispose of the Protected Data except to the extent any applicable law requires us to store such Protected Data.

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Data Processing Details

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Our processing of the Protected Data under this letter of engagement shall be for the subject-matter, duration, nature and purposes and involve the types of personal data and categories of Data Subjects set out below:

1. Subject-matter of processing:
We will process Protected Data in order to perform our obligations under this letter of engagement.

2. Duration of the processing:
We will process the Protected Data for the term of our agreement (and any exit period) and thereafter as long as we are required to process any Protected Data pursuant to the Data Protection Legislation.

3. Nature and purpose of the processing:
The nature and purpose of the processing of the Protected Data will be to perform its obligations under this letter of engagement.

4. Type of Personal Data:
The types of Protected Data will be those detailed under the section of this letter of engagement entitled "Payroll Preparation and PAYE".

5. Categories of Data Subjects:
Customers

6. Specific processing instructions:
[To administer your accounts in accordance with your instructions and in accordance with the terms of this Letter of Engagement.

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Technical and Organisational Security Measures

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We shall implement and maintain the following technical and organisational security measures to protect the Protected Data:

In accordance with the Data Protection Laws, taking into account the state of the art, the costs of implementation and the nature, scope, context and purposes of the processing of the Protected Data to be carried out under or in connection with this letter of engagement, as well as the risks of varying likelihood and severity for the rights and freedoms of natural persons and the risks that are presented by the processing, especially from accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to the Protected Data transmitted, stored or otherwise processed, we shall implement appropriate technical and organisational security measures appropriate to the risk, including what is appropriate to those matters mentioned in Articles 32(a) to (d) of the GDPR.

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