Our terms of engagement

  Terms of Engagement 2 of 23 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 responsibilities. NATURE OF SERVICES    A. ANNUAL ACCOUNTS – SOLE TRADERS/PARTNERSHIPS    B. ANNUAL ACCOUNTS – LIMITED COMPANIES C. PERSONAL TAX – INDIVIDUALS/SOLE TRADERS/PARTNERS D. PARTNERSHIP TAX E. CORPORATION TAX F. PAYROLL PREPARATION, P.A.Y.E. AND N.I. RETURNS G. MTD VAT RETURNS    H.    MANAGEMENT ACCOUNTS I. MAINTAINING ACCOUNTING RECORDS 3 of 23 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 can 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 your accounting records 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 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. 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. 4 of 23 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 required to file its accounts at Companies House within 10 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 five 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. 5 of 23 B. Continued: You have instructed us to prepare your financial statements for the year(s) ended and subsequent years.    It was agreed that we should carry out the following accounting and other services: (a) write up the accounting records of the company in so far as they are incomplete when presented to us. (b) complete the postings to the nominal ledger; and (c) prepare the accounts for approval by yourselves. 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. 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 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. 6 of3 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 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 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 and supporting schedules for your approval and signature. Once the return has been approved and signed by you and returned to us, we will submit it to the HM Revenue & Customs. (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 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. 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. 7 of 23 (m)     We have submitted form 64‐8 to HM Revenue & Customs, 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. 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) We will forward to you the income tax and capital gains tax computations and the tax return and supporting schedules 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 accounts and computations, to HM Revenue & Customs.    (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. 8 of 23 D. Continued: (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 …………… 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) We have submitted form 64‐8 to HM Revenue & Customs, 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 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. 9 of 23 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 sent to you for approval and signature prior to submission to the Inspector of Taxes. 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.    In order to do this, we need to receive all relevant information by [……………………..] each year;    and (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. E. Continued We have submitted form 64‐8 to HM Revenue & Customs, 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.    10 of 23 F. PAYROLL PREPARATION, P.A.Y.E. AND N.I. Payroll and year end returns In order for us to prepare your payroll and year end returns we will require the following information from you: (a) Personal details of all employees (i.e., name, NI number, home address, etc.). (b) All P45s received by you. (c) If any casual labour is taken on, you are required to operate P46 procedures. Completed P46 forms should be passed to us for processing. (d) Notification within two weeks of any employee who is ill for four or more calendar days, including weekends, bank holidays etc. This will enable us to operate statutory sick pay for you. (e) Notification of any employee who becomes pregnant. This will enable us to operate statutory maternity pay. (f) Details of any money or benefits made available to employees by you or by a third party through you. (g) Hours worked, rates of pay, bonuses etc. (h) Notification of employees engaged by you or leaving your employment. (i) Any notice of coding received by you. The end of year payroll returns must be received by HM Revenue & Customs by 19th May following the end of the tax year otherwise penalties will be levied. There may also be interest payable if the final tax and National Insurance payment, due by 19th April following the end of the tax year, is late. We cannot guarantee to have the returns etc. completed in time to meet this deadline unless we have all the relevant information within five working days of the end of the tax year. We will assist in the preparation and submission of PAYE returns as required by the authorities concerned.    However, it should be understood that our appointment as your agent does not absolve the company or its directors from their statutory responsibilities. We would draw your attention to the strict rules and time limits for the submission of such returns and the substantial penalties which may arise if these are not observed. It is therefore essential that we receive full information from you promptly to enable us to ensure that the returns are made on a timely basis. Completed returns will be sent to you for approval and signature prior to submission on the company’s behalf. P11D benefits for directors/officers and higher paid employees. You have asked us to prepare forms P11D for your approval. To ensure these forms are correctly prepared we will require details of all benefits, perks or reimbursed expenses received by the directors/officers/higher paid employees. A higher paid employee is someone who received at the current level at least £8,500 pa including the taxable value of benefits, perks and reimbursed expenses. There are penalties for the late submission of forms 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. 11 of 23 F. Continued: Subcontractors We have agreed to operate the Construction Industry Scheme for the subcontractors you engage. In order for us to do this, we will require the following information from you on a timely basis: (a) written confirmation that you have checked or ‘verified’ each new subcontractor with HM Revenue & Customs; and (b) written confirmation stating whether HM Revenue & Customs has advised that the subcontractor should be paid net or gross. We will advise on employment status to the best of our ability however 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 and we cannot be held responsible for any loss or consequential loss as a result of any action or penalty imposed by HM Revenue & Customs. OR It is your sole responsibility to establish the employment status of each and every one of your subcontractors. In respect of the employment status of subcontractors we cannot advise therefore we accept no liability in the event that HM Revenue & Customs challenges the employment status of one or more of your subcontractors. Under the new rules, CIS registration will be lost if returns are made late or tax is paid late. HM Revenue & Customs no longer has discretion regarding whether or not to cancel registration. 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 the necessary information on a timely basis or for any late payment occurring as a result. As detailed above, we have agreed to operate your payroll/P11D/subcontractors’ system. We can also offer you advice in the following related areas: Year end returns P14/P60 and P35 casual labour P46 subcontractors benefits for employees and directors 12 of 23 G.    MAKING TAX DIGITAL FOR VAT (MTDFV) Initial registration 1. We will register you for MTD for VAT (MTDfV). By instructing us to sign up on your behalf you are agreeing to HMRC’s terms of participation. This may result in certain changes that may include changes to deadlines. You will need to complete HMRC’s sign‐up process to enable submission of your tax return. Recurring compliance work 2. We will prepare your MTD for VAT (MTDfV) returns on a quarterly basis. The first such return to be prepared by us will be the return for the period ending ______ 3. [We will keep all records to meet the digital record‐keeping requirements of MTDfV. You must ensure that the data provided to us is complete and accurate.]     4. Based on the information that you provide to us, we will tell you how much VAT you should pay and when. If appropriate, we will initiate repayment claims where tax has been overpaid. We will advise on the interest and penalty implications if VAT is paid late. 5. Where appropriate, we will calculate the partial exemption annual adjustment. This annual adjustment will normally be made in the quarter ending [date] as the tax year for partial exemption purposes ends on. 6. Where appropriate, we will calculate the annual Capital Goods Scheme adjustment.    7. We are not responsible for considering or applying for any of the exemptions from MTDfV. However, if you feel that you are eligible for exemption, please let us know. We are happy to discuss this and may correspond to HMRC on your behalf if needed, or we can guide you on whom you should contact for this. 8. We will advise you of any relaxations applicable in relation to the digital records for supplies made and received. Where the requirements are impossible, impractical or unduly onerous we will seek to reach agreement with HMRC on a specific relaxation, but this may be subject to an additional fee. 9. We will submit your MTDfV return data online to HMRC 10. We will agree with you any supplementary information to be submitted on a voluntary basis with the MTDfV returns prior to submission. 11. Where you are invoice (accruals) accounting for income tax, we will perform an annual reconciliation of VAT outputs to accounting turnover. 12. 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. 13 of 23 Ad hoc and advisory services 13. 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: 14. Where specialist advice is required in certain areas, we may need to seek this from or refer you to appropriate specialists. We will only do this when instructed by you. Changes in the law or practice or in public policy 15. 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. 16. 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 17. You are legally responsible for: (a) ensuring that your returns are correct and complete and in an appropriate digital format and capture the appropriate level of data (b) ensuring your record keeping system is compliant with the new requirements for the digital recording and transfer of data (c) filing any returns by the due date (d) making payment of VAT on time. Failure to do this may lead to automatic penalties, surcharges and/or interest. 18. You cannot delegate this legal responsibility to others. You agree to check that returns that we have prepared for you are complete before approving them. 19. Where we are keeping your digital records, you are responsible for providing us with the following information required for us to prepare the return: (a) sales invoices (b) purchase invoices (c) bank statements (d) details of bank and cash payments (e) details of bank and cash receipts (f) work‐in‐progress details (g) access to your accounting records. We have also agreed that you will provide the following: (a) a record of the amounts owed to the business (b) a record of amounts owed by the business (c) a list of accruals (d) a list of prepayments (e) private use adjustments]. 14 of 23 20. To enable us to carry out our work you agree: (a) that all returns are to be made on the basis of full disclosure (b) that you are responsible for ensuring that the information provided is, to the best of your knowledge, accurate and complete and that all digital links are in the manner proscribed. The returns are prepared solely on the basis of the information provided by you and we accept no responsibility for any liabilities arising due to inaccuracies, omissions or breakdowns in digital links concerning the information you provide, that may lead to a misdeclaration on which penalties and interest may arise (c) to authorise us to approach such third parties as may be appropriate for information we consider necessary to deal with the returns (d) to provide us with all the records relevant to the preparation of your quarterly returns as soon as possible after the return period ends. We would ordinarily need a minimum of 14 days before submission to complete our work. If the records are provided later or are incomplete or unclear, thereby delaying the preparation and submission of the return, we accept no responsibility for any penalty that may arise (e) to inform us that you have made the tax payment based on your calculated return. 21. You will keep us informed of material changes in circumstances that could affect your obligations, for example:    ·change in the nature of your business ·change in turnover ·change of type of supply for VAT ·change in your type of business entity such as from sole trader into partnership ·acquisition or disposal of land or property etc ·starting to make supplies that are exempt from VAT ·you have reclaimed VAT within the last 10 years, having spent over £250,000 in purchasing, building or redeveloping a property, and the extent to which it is being used for taxable and/or exempt purposes has changed since you first reclaimed the VAT (ie Capital Goods Scheme adjustments will apply to this or any other items that fall within the scope of the Capital Goods Scheme). 22. Where you wish us to deal with HMRC communications, you will forward to us all communications received from HMRC such as statements of account, copies of notices of assessment 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. 23. You are responsible for bringing to our attention any errors, omissions or inaccuracies in your returns that you become aware of after the returns have been submitted in order that we may assist you to make a voluntary disclosure. 24. If you provide digital services to consumers in the EU and are over the registration limits you are responsible for either registering for VAT in that member state or registering for MOSS in the UK. 15 of 23 (b) If you are involved with any other business that is not registered for VAT you are responsible for monitoring your monthly turnover to establish whether you are liable to register for VAT. If you do not understand what you need to do, please ask us. If you exceed the VAT registration threshold, and wish us to assist you in notifying HMRC of your liability to be VAT registered, you must give us clear instructions to assist you in the VAT registration process. You should notify us of your instructions in good time to enable the VAT registration application form to be submitted within the statutory time limit of one month following the month in which you exceeded the VAT registration threshold in force at that time. We will not be responsible if you fail to notify us in time and incur a late registration penalty as a result. 25. If EC Sales Lists need to be completed you are responsible for obtaining all of your customers’ VAT registration numbers in other member states and to check with HMRC any that you are not completely satisfied with. 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 16 of 23 H. MANAGEMENT ACCOUNTS We understand that you require us to prepare the monthly/quarterly management accounts of your business/partnership for the month/quarter ended ………………………. and subsequent months/quarters. This involves us in completing the writing up of your books and records, insofar as they are incomplete when presented to us, from the information and explanations supplied to us and preparing draft accounts therefrom for your approval. We understand that you have agreed that your staff will be responsible for: ‐  (a) maintaining records of all receipts and payments of cash. (b) reconciling cash book balances monthly/quarterly* with the bank statements. (c) posting and balancing the purchase and sales ledgers; and (d) 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, nor the items of expenditure and income. To carry out an audit would require additional work to comply with generally accepted auditing standards which we are not authorised to carry out. 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. The accounts are prepared for your exclusive use within your business. They should not be shown to any other party without our prior consent. To ensure that anyone reading the accounts is aware that we have not carried out an audit, we will annex to the accounts a short report. This report must remain attached to any accounts shown to any other parties. 17 of 23 I. MAINTAINING ACCOUNTING RECORDS It is agreed that we should carry out the following accounting and other services: (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 ledgers 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; and (g) prepare the accounts for approval by yourselves. 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 such circumstances that we encounter. 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. 18 of 23 STANDARD TERMS AND CONDITIONS OF BUSINESS    Applicable law Our engagement letter, the schedule of services and our standard terms and conditions of business are governed by, and should be construed in accordance with, the law and practice of [England and Wales/Scotland/Northern Ireland]. Each party agrees that the courts of [England and Wales/Scotland/Northern Ireland] 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 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. 1. Client identification and verification As with other professional services firms, we are required to identify and verify our clients for the purposes of the UK anti‐money laundering legislation. Save in exceptional circumstances we cannot start work until this requirement has been met. We may request from you, and retain, such information and documentation as we require for these purposes and/or make searches of appropriate databases including ID verification software.    Client money If we 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. The account will be operated and all funds dealt with in accordance with AAT rules. 2. Commissions and other benefits In some circumstances we may receive commissions and/or other benefits for introductions to other professionals or in respect of transactions that we arrange for you. Where this happens we will notify you in writing of the amount and terms of payment and receipt of any such commissions or benefits 3. Complaints    We are committed to providing you with a high‐quality service that is both efficient and effective. However, should there be any cause for complaint in relation to any aspect of our service, please contact Nick Adams. We agree to look into any complaint carefully and promptly and do everything reasonable to try and resolve it. If you are still not satisfied you can refer your complaint to our professional body, AAT 4. Confidentiality Communication between us is confidential. We shall take all reasonable steps not to disclose your information except where we are required to and as set out in our privacy notice. Unless we are authorised by you to disclose information on your behalf, this undertaking will apply during and after this engagement. We may, on occasions, subcontract work on your affairs to other tax or accounting professionals. The subcontractors will be bound by our client confidentiality and security terms. 19 of 23 5. Conflicts of interest If there is a conflict of interest in our relationship with you or in our relationship with you and another client that is capable of being addressed successfully by the adoption of suitable safeguards to protect your interests, then we will adopt those safeguards.    Where conflicts are identified that cannot be managed in a way that protects your interests then we regret that we will be unable to provide further services. If this arises, we will inform you promptly. We reserve the right to act for other clients whose interests are not the same as or are adverse to yours, subject, of course, to the obligations of confidentiality referred to above. 6. Data protection You acknowledge that we will act in accordance with the privacy notice we have supplied to you. 7. Disengagement    Should we resign or be requested to resign we will normally issue a disengagement letter to ensure that our respective responsibilities are clear. Should we have no contact with you for a period of 6 months or more, we may issue to your last known address a disengagement letter and thereafter cease to act.    We reserve the right following termination for any reason to destroy any of your documents that we have not been able to return to you after a period of six months unless other laws or regulations require otherwise. 8. Electronic and other communication As instructed, we will communicate with you and with any third parties you instruct us to as set out in our covering letter and privacy notice via email or by other electronic means. The recipient is responsible for virus‐checking emails and any attachments. With electronic communication there is a risk of non‐receipt, delayed receipt, inadvertent misdirection or interception by third parties. We use virus‐scanning software to reduce the risk of viruses and similar damaging items being transmitted through emails or electronic storage devices. However, electronic communication is not totally secure and we cannot be held responsible for damage or loss caused by viruses, nor for communications that are corrupted or altered after despatch. Nor can we accept any liability for problems or accidental errors relating to this means of communication, especially in relation to commercially sensitive material. These are risks you must accept in return for greater efficiency and lower costs. If you do not wish to accept these risks, please let us know and we will communicate by hard copy, other than where electronic submission is mandatory. Any communication by us with you sent through the post or DX system is deemed to arrive at your postal address two working days after the day that the document was sent. When accessing information held electronically by HMRC, we may have access to more information than we need and will only access records reasonably required to carry out the contract. You are required to keep us up to date with accurate contact details at all times. This is important to ensure that communications and papers are not sent to the incorrect address. 20 of 23 11. Fees and payment terms Our fees may depend not only upon the time spent on your affairs but also on the level of skill and responsibility, and the importance and value of the advice that we provide, as well as the level of risk. If we provide you with an estimate of our fees for any specific work, then the estimate will not be contractually binding unless we explicitly state that that will be the case. Where requested, we may indicate a fixed fee for the provision of specific services or an indicative range of fees for a particular assignment. It is not our practice to id

 The Data Protection Act 2018 (“DPA 2018”) and the General Data Protection Regulation (“GDPR”) impose  certain legal obligations in connection with the processing of personal data.  RF Adams & Co Ltd is a data controller within the meaning of the GDPR and we process personal data.  The firm’s contact details are as follows: nick@adamsandco.uk  We may amend this privacy notice from time to time. If we do so, we will supply you with and/or otherwise  make available to you a copy of the amended privacy notice.  Where we act as a data processor on behalf of a data controller (for example, when processing payroll),  we provide an additional schedule setting out required information as part of that agreement. That additional  schedule should be read in conjunction with this privacy notice.  The purposes for which we intend to process personal data  We intend to process personal data for the following purposes:  • To enable us to supply professional services to you as our client.  • To fulfil our obligations under relevant laws in force from time to time (e.g. the Money Laundering,  Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“MLR 2017”)).  • To comply with professional obligations to which we are subject as a member of The AAT. • To use in the investigation and/or defense of potential complaints, disciplinary proceedings and legal  proceedings.  • To enable us to invoice you for our services and investigate/address any attendant fee disputes that  may have arisen.  • To contact you about other services we provide which may be of interest to you if you have consented  to us doing so.  The legal bases for our intended processing of personal data  Our intended processing of personal data has the following legal bases:  • At the time you instructed us to act, you gave consent to our processing your personal data for the  purposes listed above.  • The processing is necessary for the performance of our contract with you.  • The processing is necessary for compliance with legal obligations to which we are subject (e.g. MLR  2017).  It is a requirement of our contract with you that you provide us with the personal data that we request. If  you do not provide the information that we request, we may not be able to provide professional services to  you. If this is the case, we will not be able to commence acting or will need to cease to act.  Persons/organisations to whom we may give personal data  We may share your personal data with:  • HMRC  • any third parties with whom you require or permit us to correspond  • subcontractors  • an alternate appointed by us in the event of incapacity or death  • tax insurance providers  • professional indemnity insurers  • our professional body The AAT and/or the Office of Professional Body Anti-Money Laundering  Supervisors (OPBAS) in relation to practice assurance and/or the requirements of MLR 2017 (or any  similar legislation)  • Mortgage advisers appointed by yourself.  If the law allows or requires us to do so, we may share your personal data with:  • the police and law enforcement agencies  • courts and tribunals  • the Information Commissioner’s Office (“ICO”)  We may need to share your personal data with the third parties identified above in order to comply with our  legal obligations, including our legal obligations to you. If you ask us not to share your personal data with  such third parties we may need to cease to act.  Retention of personal data  When acting as a data controller and in accordance with recognised good practice within the tax and  accountancy sector we will retain all of our records relating to you as follows:  • where tax returns have been prepared it is our policy to retain information for 7 years from the  end of the tax year to which the information relates.  • where ad hoc advisory work has been undertaken it is our policy to retain information for 7 years  from the date the business relationship ceased.  • where we have an ongoing client relationship, data which is needed for more than one year’s tax  compliance (e.g. capital gains base costs and claims and elections submitted to HMRC) is  retained throughout the period of the relationship but will be deleted 5 years after the end of the  business relationship unless you as our client ask us to retain it for a longer period.  Our contractual terms provide for the destruction of documents after 7 years and therefore agreement to  the contractual terms is taken as agreement to the retention of records for this period, and to their  destruction thereafter.  You are responsible for retaining information that we send to you (including details of capital gains base  costs and claims and elections submitted) and this will be supplied in the form agreed between us.  Documents and records relevant to your tax affairs are required by law to be retained by you as follows:  Individuals, trustees and partnerships  • with trading or rental income: five years and 10 months after the end of the tax year;  • otherwise: 22 months after the end of the tax year.  Companies, LLPs and other corporate entities  • six years from the end of the accounting period.  Where we act as a data processor as defined in DPA 2018, we will delete or return all personal data to the  data controller as agreed with the controller.  Requesting personal data we hold about you (subject access requests)  You have a right to request access to your personal data that we hold. Such requests are known as ‘subject  access requests’ (“SARs”).  Please provide all SARs in writing marked for the attention of Nick Adams To help us provide the information you want and deal with your request more quickly, you should include  enough details to enable us to verify your identity and locate the relevant information. For example, you  should tell us:  1. your date of birth  2. previous or other name(s) you have used  3. your previous addresses in the past five years  4. personal reference number(s) that we may have given you, for example your national insurance  number, your tax reference number or your VAT registration number  5. what type of information you want to know  If you do not have a national insurance number, you must send a copy of:  • the back page of your passport or a copy of your driving licence; and  • a recent utility bill.  DPA 2018 requires that we comply with a SAR promptly and in any event within one month of receipt. There  are, however, some circumstances in which the law allows us to refuse to provide access to personal data  in response to a SAR (e.g. if you have previously made a similar request and there has been little or no  change to the data since we complied with the original request).  We will not charge you for dealing with a SAR.  You can ask someone else to request information on your behalf – for example, a friend, relative or solicitor.  We must have your authority to respond to a SAR made on your behalf. You can provide such authority by signing a letter which states that you authorise the person concerned to write to us for information about  you, and/or receive our reply.  Where you are a data controller and we act for you as a data processor (e.g. by processing payroll), we will  assist you with SARs on the same basis as is set out above.  Putting things right (the right to rectification)  You have a right to obtain the rectification of any inaccurate personal data concerning you that we hold.  You also have a right to have any incomplete personal data that we hold about you completed. Should you  become aware that any personal data that we hold about you is inaccurate and/or incomplete, please inform  us immediately so we can correct and/or complete it.  Deleting your records (the right to erasure)  In certain circumstances you have a right to have the personal data that we hold about you erased. Further  information is available on the ICO website (www.ico.org.uk). If you would like your personal data to be  erased, please inform us immediately and we will consider your request. In certain circumstances we have  the right to refuse to comply with a request for erasure. If applicable, we will supply you with the reasons  for refusing your request.  The right to restrict processing and the right to object  In certain circumstances you have the right to ‘block’ or suppress the processing of personal data or to  object to the processing of that information. Further information is available on the ICO website  (www.ico.org.uk). Please inform us immediately if you want us to cease to process your information or  you object to processing so that we can consider what action, if any, is appropriate.  Obtaining and reusing personal data (the right to data portability)  In certain circumstances you have the right to be provided with the personal data that we hold about you in  a machine-readable format, e.g. so that the data can easily be provided to a new professional adviser. Further information is available on the ICO website (www.ico.org.uk).  The right to data portability only applies:  • to personal data an individual has provided to a controller;  • where the processing is based on the individual’s consent or for the performance of a contract; and  • when processing is carried out by automated means  We will respond to any data portability requests made to us without undue delay and within one month. We  may extend the period by a further two months where the request is complex or a number of requests are received but we will inform you within one month of the receipt of the request and explain why the extension  is necessary.  Withdrawal of consent  Where you have consented to our processing of your personal data, you have the right to withdraw that  consent at any time. Please inform us immediately if you wish to withdraw your consent.  Please note:  • the withdrawal of consent does not affect the lawfulness of earlier processing  • if you withdraw your consent, we may not be able to continue to provide services to you  • even if you withdraw your consent, it may remain lawful for us to process your data on another legal  basis (e.g. because we have a legal obligation to continue to process your data)  Complaints  If you have requested details of the information we hold about you and you are not happy with our response,  or you think we have not complied with the GDPR or DPA 2018 in some other way, you can complain to  us. Please send any complaints to Nick Adams If you are not happy with our response, you have a right to lodge a complaint with the ICO  (www.ico.org.uk).