Schedule of Services for Letters of Engagement (Trusts Exc TRS)

EVOLUTION ABS LIMITED
SCHEDULE OF SERVICES FOR LETTERS OF ENGAGEMENT
TRUSTS

The sections that apply to you are ticked on the Letter of Engagement; if the section is not ticked it does not apply to the work Evolution ABS Limited will undertake for you, unless Evolution ABS Limited otherwise expressly agrees.

1. Accounting

Responsibilities

Our function as accountant is to act as agent on your behalf in preparing the accounts (financial statements) of the trust for the year ended as stated and subsequent years. This may involve:

Completing the writing up of your books and records in so far as they are incomplete when presented to us, and preparing from the records the draft financial statements for your approval.

We have agreed that you will be responsible for:

Maintaining records of all receipts and payments of cash.
Maintaining records of invoices issued and received.
Maintaining records for VAT purposes, Making Tax Digital for VAT (MTDfV) compliant where appropriate, unless we are instructed to prepare your VAT records.
Reconciling balances monthly/annually with the bank statements.
Preparing a record of business mileage undertaken in the year.
Preparing a record of hours per month worked at home if you wish to claim for business use of your home.
Preparing details of any loan interest paid.
Preparing details of the following at the year end: stocks and work in progress; fixed assets; amounts owing to creditors; amounts owing by customers; and accruals and prepayments.
Preparing details of undrawn holiday for your employees at the year end.

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

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

Our service to you

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

We have a professional duty to compile accounts that conform to generally accepted accounting principles. Where we identify that the accounts do not conform to accepted accounting principles we will inform you and suggest amendments be put through the accounts before being published. We have a professional responsibility not to allow our name to be associated with accounts that may be misleading. In extreme cases, where this matter cannot be resolved, we will withdraw from the engagement and notify you in writing

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

The intended users of the report are the trustees. The report will be addressed to the trustees.

Ad hoc and advisory work

Where you have instructed us to do so we will also provide such other ad hoc and advisory services as may be agreed between us from time to time. These services will be subject to the terms of this engagement letter and standard terms and conditions of business unless we decide to issue a separate engagement letter. An additional fee may be charged for these services. Examples of such work include:

advising on ad hoc amendments required to your digital records that we identify in the process of preparing your accounts and making the amendments on your behalf if instructed to do so
advising on ad hoc opening balance adjustments required to your digital records and making the amendments if instructed to do so
advising on ad hoc transactions and queries relating to your digital records

Limitation of liability

We specifically draw your attention to the limitation of liability paragraphs in our standard terms and conditions which set out the basis on which we limit our liability to you and to others. You should read this in conjunction with the limitation of third party rights paragraphs in our standard terms and conditions which exclude liability to third parties. These are important provisions which you should read and consider carefully.

2. Trust Tax

Recurring compliance work

We will prepare:

the trust self-assessment tax returns together with any supplementary pages required
all inheritance tax returns required

from the information and explanations that you provide to us. After obtaining approval from the nominated trustee or other nominated person on behalf of all the trustees, we will submit your returns to HMRC.

We will maintain the accounting records of the trust on your behalf from the information and explanations provided to us on your behalf for the purposes of preparing the annual accounts and tax returns.

We will prepare the income and expenditure and capital accounts (together with a balance sheet) of the trust from the accounting records and other information and explanations provided by you, and will obtain your approval of the accounts.

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

We will calculate the income tax, capital gains tax and inheritance tax liabilities of the trust and will advise you how much you should pay and when. Where instructed by you we will advise you on the interest and penalty implications if tax is paid late. We will also check HMRC’s calculation of the tax liabilities and initiate repayment claims if tax has been overpaid.

We will advise you as to possible tax return-related claims and elections arising from information supplied by you. Where instructed by you we will make such claims and elections in the form and manner required by HMRC.

There is an in-year capital gains tax (CGT) reporting and payment requirement for disposals of UK residential property and, if the trust is non-UK resident, UK non-residential property and investments in property-rich entities. Where instructed and subject to a separate fee, we will prepare the in-year return for each disposal, calculate the CGT due and submit the return to HMRC. Note: as returns must be submitted within 60 days of sale completion, please see paragraph Trust Tax, Your responsibilities.

Where the terms of the trust require income or capital payments to be made to the beneficiaries, we will assist you in preparing all necessary forms relating to such payment.

Under anti-money laundering legislation, the trustees have obligations to maintain accurate and up-to-date records in writing of their beneficial owners and report specified information about the trust to HMRC.

The trustees will be responsible for identifying whether or not the trust needs to be registered on the trust register maintained by HMRC and will deal with all registration requirements. For the purposes of completion of the self-assessment return, the trustees undertake to provide us with confirmation each year that either the registration has been completed or is not required.

The trustees will be responsible for annually updating or confirming that no change is required to the details of settlors, trustees and beneficiaries on the trust register maintained by HMRC. For the purposes of completing the self-assessment return, the trustees undertake to provide us with confirmation that the annual update, or confirmation that no change is required, has been completed on HMRC’s trust register.

Ad hoc queries by way of telephone and email enquiries are not routine compliance and may result in additional fees. As indicated below, where appropriate we will aim to discuss and agree additional fees, but it may not always be possible to agree these in advance and we reserve the right to charge you an additional fee for these queries.

Ad hoc and advisory work

Where you have instructed us to do so we will also provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These services will be subject to the terms of this engagement letter and standard terms and conditions of business unless we decide to issue a separate engagement letter. An additional fee may be charged for these services. Examples of such work include:

advising on ad hoc transactions and queries (including telephone conversations), preparing and submitting information in the relevant format to HMRC and calculating any related tax liabilities (for example, the sale of assets held by the trust/estate)
advising you of the occasions of charge to inheritance tax, the basis of the charge and when the tax liability is due for payment
dealing with any enquiry opened into a trust/estate self-assessment tax return or tax affairs by HMRC
dealing with any enquiries and/or assessments raised by HMRC in relation to inheritance tax.

Where specialist advice is required, we may need to seek this from or refer you to appropriate specialists. We will only do this when instructed by the nominated trustee.

Changes in the law or practice or in public policy

We will not accept responsibility if you act on advice previously given by us on an earlier occasion without first confirming with us that the advice is still valid in light of any change in the law or practice or in public policy or your circumstances.

We will accept no liability for losses arising from changes in the law (or the interpretation thereof) or practiced or in public policy that are first published after the date on which the advice is given.

Your responsibilities

As trustees you have legal responsibility for:

ensuring that the trust’s self-assessment tax returns are correct and complete
ensuring that all inheritance tax returns are correct and complete
filing any returns by the due date
paying tax on time.

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

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

To enable us to carry out our work you agree:

that all returns are to be made on the basis of full disclosure of all sources of income, charges, allowances and capital transactions
to provide all information necessary for dealing with the trust’s taxation affairs; we will rely on the information being true, correct and complete and will not audit the information
to advise us of distributions made within 30 days of such an event
to provide full details of all UK residential property disposals including associated costs / valuations prior to disposal. Where you consider that you will be non-UK resident in the tax year of disposal, full details of all UK property disposals, including disposal of shares in property rich companies, must be advised prior to exchange of contracts on any property disposal. If information is received after this, we cannot guarantee that we can provide advice on the amount of capital gains tax due or submit an in-year return within 60 days of the completion of the disposal
to authorise us to approach such third parties as may be appropriate for information that we consider necessary to deal with the trust’s taxation affairs
to provide us with information in sufficient time for the trust’s self-assessment tax returns to be completed and submitted by the due date of 31January following the end of the tax year. In order that we can do this, we need to receive all relevant information as soon as possible and by 30 September following the tax year end at latest. Where feasible, we may agree to complete your return within a shorter period but may charge an additional fee for so doing
to provide us with information in sufficient time for the trust’s inheritance tax returns to be completed and submitted by the due dates
if we are not instructed to prepare full accounts in Section1 to provide us with
- records of invoices issued and received
- records of all receipts and payments
- all information to enable us to prepare your income and expenditure and capital accounts and trust tax return

You will keep us informed of material changes in circumstances that could affect the income, capital gains and inheritance tax liabilities of the trust/estate. If you are unsure whether the change is material or not, please let us know so that we can assess its significance.

Where you wish us to deal with HMRC communications you will forward to us all communications received from HMRC such as HMRC statements of account, copies of notices of assessment 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 you receive because HMRC is not obliged tosend us copies of all communications issued to you.

If you provide digital services to consumers in the European Union you are responsible for either registering for VAT in that member state or registering for VAT Mini One Stop Shop (MOSS) in the UK.

If you carry on a business as trustees and make supplies for VAT purposes you are responsible for monitoring the 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 the VAT registration threshold is exceeded, and you would like us to assist in notifying HMRC of your liability to be VAT registered, we will be pleased to assist in the VAT registration process.Please notify us of your instructions to assist with the VAT registration in good time to enable a VAT registration form to be submitted within the time limit of one month following the month in which the VAT registration threshold in force at that time was exceeded.We will not be responsible if you fail to notify us in time and incur a late registration penalty as a result.

You are responsible for employment taxes, pensions (including auto-enrolment) and the assessment of the tax status of your workers. If you do not understand what you need to consider or action you need to take, please ask us. We will not be in a position to assist you in complying with your responsibilities if we are not engaged to provide such a service. We are not responsible for any penalty that is incurred.

You are reminded that under the Trustee Act 2000 it is your responsibility to regularly review the Trust investments and to have a clear investment policy.

Limitation of liability

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

3. Trust Registration Service

Initial Registration

We will register the trust along with details of settlors, trustees and beneficiaries on the trust register maintained by HMRC using the information provided by you. Provided the necessary information is supplied by the date agreed, we will register the trust along with the appropriate details within the time limits required. For the purposes of completion of the self-assessment return, the trustees undertake to provide us with details of any changes to the settlors, trustees and beneficiaries on an annual basis.

Recurring compliance work

We will update or confirm that no change is required to the details of settlors, trustees and beneficiaries on the trust register maintained by HMRC using information provided by you. Provided that the necessary information is supplied by the agreed date we will update/confirm the appropriate details on HMRC’s trust register within the time limits required.

Ad hoc and advisory work

Where specialist advice is required, we may need to seek this from or refer you to appropriate specialists. We will only do this when instructed by the nominated trustee.

Changes in the law or practice or in public policy

Your responsibilities

As trustees you have legal responsibility for:

1. ensuring that the trust is registered on HMRC’s trust register

ensuring that all submissions on HMRC’s trust register are correct and complete
filing any submissions by the due date

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

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

To enable us to carry out our work you agree:

to provide all information necessary for dealing with the trust’s registration and updates on HMRC’s trust register, e.g., details of settlors, beneficiaries and trustees; we will rely on the information being true, correct and complete and will not audit the information

You will keep us informed of material changes to the trust. If you are unsure whether the change is material or not, please let us know so that we can assess its significance.

Where you wish us to deal with HMRC communications you will forward to us all communications received from HMRC such as copies of notices 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 you receive because HMRC is not obliged to send us copies of all communications issued to you.

Limitation of liability

4. Payroll

4.1 Payroll services (without auto enrolment)

Recurring compliance work

We will prepare your UK payroll for each payroll period to meet UK employment tax requirements specifically:

calculating the pay as you earn (PAYE) deductions including at the Scottish rate of income tax if applicable
calculating the employees’ national insurance contributions (NIC) deductions
calculating the employer’s NIC liabilities
calculating statutory payments – for example, statutory sick pay and/or statutory maternity pay
calculating reclaims of statutory payment – for example, maternity payments
calculating employee and employer pension contributions for employees and workers who are members of workplace pension schemes (including those who are auto-enrolled) on the basis of the information you provide
claiming employment allowance
calculating, if appropriate, apprenticeship levy
calculating other statutory and non-statutory deductions
submitting information online to HMRC under real-time information (RTI) for PAYE.

You are responsible for advising us of any payroll adjustments required for holiday and ensuring that you comply with regulations for employee holiday entitlements.

We will prepare and send to you the following documents before the time of payment through the payroll or due date for delivering information to HMRC:

payroll summary report showing the reconciliation from gross to net for each employee and all relevant payroll totals
full payment submission (FPS) for taxable pay and payrolled benefits for each employee:

a payslip for each employee unless not required
a P45 for each leaver

We will submit FPSs online to HMRC on the basis of the data provided, by you. FPSs must reach HMRC normally on or before the payday. You must ensure that the data provided to us is complete and accurate and you must inform us if there are any amendments required after receiving the payroll summaries, and your attention is drawn to your legal responsibilities as set out below.

For each tax month we will prepare, where appropriate, an employer payment summary (EPS) from the information and explanations that you provide to us. (Examples of EPS data include statutory payments, employment allowance, Construction Industry Scheme deductions, apprenticeship levy allowance allocated to the PAYE scheme, apprenticeship allowance payable to date and confirmation that no payments were made to employees.)

We will submit EPSs to HMRC after the data to be included therein has been approved/on the basis of the data provided by you. (EPSs must reach HMRC by the 19th of the month following the tax month to which they relate). You must ensure that the data provided to us is complete and accurate, and your attention is drawn to your legal responsibilities as set out below.

At the end of the payroll year we will:

prepare the final FPS (or EPS) and submit this to HMRC on the basis of the data provided by you. (The final FPS (or EPS) for the year must reach HMRC by 19 April following the end of the tax year.) You must ensure that the data provided to us is complete and accurate and your attention is drawn to your legal responsibilities as set out below
prepare and send to you form P60 for each employee on the payroll at the year-end so that you can give them to employees by the statutory due date of 31 May following the end of the tax year
prepare and send to you a statement for every employee for whom benefits-in-kind (BiK) have been payrolled, identifying every benefit provided to each employee during the tax year and the cash equivalent of each benefit treated as PAYE income so you can give them to employees by the statutory due date of 31 May following the end of the tax year
give you details of the class 1A NIC on payrolled BiK, which will need to be accounted for on form P11D(b) and the due date for payment
give you details of the class 1A NIC on expenses accounted for in the payroll, which will need to be accounted for on form P11D(b) and the due date for payment
give you the figures that need to be included on forms P11D to account for income tax in respect of expenses for which class 1 NIC has been accounted for in the payroll

Note that we will only deal with the nominated person or the trustees within the organisation. Any enquiries from individual employees concerning their wages or other payroll details will be referred back to that responsible person.

Ad hoc queries by way of telephone and email enquiries are not routine compliance and may result in additional fees. As indicated below, where appropriate we will aim to discuss and agree additional fees but it may not always be possible to agree these in advance and we reserve the right to charge you an additional fee for these queries.

Ad hoc and advisory work

Where you have instructed us to do so we will provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These services will be subject to the terms of this engagement letter and standard terms and conditions of business unless we decide to issue a separate engagement letter. An additional fee may be charged for these services. Examples of such work include:

advising on ad hoc transactions (for example, termination payments to employees) and queries (including telephone conversations), preparing and submitting information in the relevant format to HMRC and calculating any related tax and NIC liabilities
dealing with any compliance check or enquiry by HMRC into the payroll returns
preparing and submitting any amended returns or data for previous tax years and corresponding with HMRC as necessary
helping with setting up and administering workplace pension schemes, including referring you to appropriate specialists where necessary
agreeing with you which employer-provided BiK will be processed through the payroll and for which employees, registering the PAYE scheme to payroll BiK, processing through the payroll cash equivalent notional amounts, notifying HMRC of in-year changes, advising you on the payment of associated class 1A NIC, preparing and submitting return P11D(b), and notifications to employees
preparing and submitting returns P11D and P11D(b) for employee BiK and expenses, and advising on the payment of associated class 1A NIC (such work if undertaken is covered in a separate schedule of services)
assisting you in the operation of the Construction Industry Scheme (CIS) for subcontractors
conducting PAYE, and benefits and expenses health checks
helping you to allocate apprenticeship levy allowance across your different PAYE schemes/group companies/connected charities.

Where specialist advice is required on occasion, we may need to seek this from or refer you to appropriate specialists. We will only do this when instructed by the nominated person.

Changes in the law or public policy and practice

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 public policy and practice or your circumstances.

We will accept no liability for losses arising from changes in the law (or the interpretation thereof) or public policy and practice that are first published after the date on which the advice is given.

Your responsibilities

You are legally responsible for:

ensuring that the data in your payroll submissions is correct and complete
making any submissions by the due date
paying tax and NIC on time.

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

Employers cannot delegate this legal responsibility to others. You agree to check that submissions that we have prepared for you are correct and complete before you approve them.

You are responsible for maintaining your employees’ information, including any changes to the employees’ bank account details.

To enable us to carry out our work you agree:

that all information required to be delivered online is submitted on the basis of full disclosure
to provide full information necessary for dealing with your payroll affairs and workplace pension scheme contributions; we will rely on the information and documents being true, correct and complete, and will not audit the information or those documents
the trustees or the nominated person authorised by you will notify us of changes in employees and in rates of pay. We will process the changes only if notified by that individual
to advise us in writing of changes of payroll pay dates and workplace pension scheme contribution dates
to notify us on the date agreed between us, prior to the payroll pay date of all transactions or events that may need to be reflected in the payroll for the period, including details of:
to provide the data required to complete:
to authorise us to approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs.

all new employees (including full names, address, date of birth, gender, national insurance number) and details of their remuneration packages
all leavers and any termination payments
all changes to remuneration packages
all pension scheme changes
all changes to benefits and expenses reportable under an existing payrolling benefits and expense online service registration
irregular and/or ad hoc payments and the dates to be paid;

in-year FPS by at least 5 working days prior to payroll pay dates so that they can be submitted on or before payday, or as agreed with us
in-year EPS by at least 5 days prior to 19th of the month following the tax month
final FPS (or EPS when applicable) for the year at least 5 days prior to 19 April following the end of the tax year
EYU within 5 days of becoming aware of changes required.

You will keep us informed of material changes in circumstances that could affect the payroll. If you are unsure whether the change is material or not, please let us know so that we can assess its significance.

Where you wish us to deal with HMRC communications you will forward to us all communications received from HMRC. 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.

If the information required to complete the payroll services set out above is received later than the dates specified above or agreed with us, we will still endeavour to process the payroll and returns to meet the agreed payroll date and filing deadlines but we will not be liable for any costs or other losses arising if the payroll is late or the returns are filed late in these circumstances. We may charge an additional fee for work carried out in a shorter time period.

Limitation of liability

You must also refer to the attached schedule confirming data processing details.

4.2 Payroll and Auto Enrolment services

The following terms apply in addition to payroll terms if you have instructed us to deal with auto enrolment on your behalf in addition to payroll services.

Recurring compliance work

As part of the preparation of your UK payroll, we will:

calculate the deductions to be made from each worker’s pay
calculate the contribution you as an employer are obliged to make to the scheme
process through the payroll any refunds from the scheme.

We will include the pension payments on the following documents:

the payroll summary report showing the reconciliation from gross to net for each employee and all relevant payroll totals
the payslips for each employee (unless payslips are not required)

We can provide advice to you regarding your choice of a pension scheme but we are not authorised to provide specific advice to your employees. You are responsible for choosing a pension scheme that meets the automatic enrolment qualifying criteria and we recommend that you take appropriate independent advice.

We can assist you by:

providing factual information about pension schemes
helping you to compare schemes
referring you to a specialist adviser
referring you to guidance issued by The Pensions Regulator on pension scheme selection.

We will help you to establish which category each worker falls into, whether entitled worker, eligible jobholder or non-eligible jobholder.

We will prepare and send to you a notice to send to each non-eligible jobholder that sets out certain information about opting in to an automatic enrolment scheme and what this means for them. If the non-eligible jobholder chooses to opt in, you will enrol them onto the scheme on receipt of an opt-in notice. We will assist you in this process. We will send information to the pension scheme about those non-eligible jobholders who choose to opt in.

We will prepare and send to you a notice to send to each entitled worker, giving them information about joining a pension scheme and what it means for them. This includes new starters and those becoming eligible to be enrolled by age or earnings. They do not need to be automatically enrolled but have the right to opt in. You will arrange membership to a scheme for those entitled workers who choose to join and complete a joining notice. This can be a different scheme to the one used for auto-enrolment. We will assist you in this process.

We will prepare a notice for you to give to the eligible jobholder telling them that they have been enrolled, setting out what that means for them and also detailing their right to opt out (and to opt back in again). You must re-enrol eligible jobholders every three years. We recommend that you establish a process for this review.

We will, on receipt of the scheme information from you and the pension provider, assist you when you make your declaration of compliance to The Pensions Regulator.

Ad hoc and advisory work

dealing with any enquiry from The Pensions Regulator
preparing any amended records that may be required and corresponding with The Pensions Regulator as necessary.

Where specialist advice is required on occasion, we may need to seek this from or refer you to appropriate specialists.We will only do this when instructed by the nominated person.

Changes in the law or public policy and practice

Your responsibilities

You are legally responsible for:

ensuring that your payroll and pensions records are correct and complete
making payment of pensions contributions on time.

You will keep and retain the records required by law. These include:

records about jobholders and workers, e.g. name, date of birth, national insurance number, gross earnings, contributions, gender, address, status within the pension scheme, opt-in notice, opt-out notice and joining notice
records about the pension scheme, e.g. employer pension scheme reference, scheme name and address, and other information in respect of specific pension schemes.

You must retain these records for six years except for requests to leave the pension scheme, which must be kept for four years.

You are responsible for choosing an eligible scheme and for regularly reviewing that it meets the automatic enrolment qualifying criteria, and we recommend that you take appropriate independent advice.

You are responsible for providing all relevant information to the trustees or managers of the pension scheme within the statutory period.

You are responsible for the monitoring of workers’ age and earnings and agree to advise us on any change in categorisation or status of your workers.

You are responsible for monitoring opt-in and opt-out requests and where workers with the right to opt in or opt out exercise that right. If required and requested by you, we will assist you in providing appropriate information for you to provide to the jobholder.

You are responsible for providing the required statutory information to your workers. This includes writing to new starters and those becoming eligible to be enrolled by age or earnings within six weeks of them meeting the age or earnings criteria.

You will enrol all eligible jobholders into an eligible pension scheme on the appropriate date.

You are legally responsible for:

choosing your re-enrolment date from within a six-month window, which starts three months before the third anniversary of your automatic enrolment staging date and ends three months after it
assessing your job holders, including those enrolled into the scheme and those you will put back into the scheme.

You are required within five calendar months from the start of your legal duties and thereafter when re-enrolling eligible jobholders to make a declaration of compliance with The Pensions Regulator.

To enable us to carry out our work, you agree:

to provide full information necessary for dealing with your workers’ pensions; we will rely on this information and documents being true, correct and complete, and will not audit the information or documents
the trustees or the nominated person authorised by you will notify us of changes in employees and in rates of pay. We will process the changes only if notified by that (those) individual(s)
to advise us in writing of changes of payroll pay dates
to notify us at least 5 working days prior to the payroll date of all transactions or events that may need to be considered in relation to auto-enrolment obligations for the period, including details of:

all new workers and details of their remuneration packages
all leavers and details of termination arrangements for all workers
changes in categorisation or status of your workers
all opt-in and opt-out requests from your workers
all remuneration changes for all workers
all pension scheme changes.

You will keep us informed of material changes in circumstances that could affect the pension scheme, workers and deductions. If you are unsure whether the change is material or not, please let us know so that we can assess its significance or otherwise and to seek your authority to approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs.

Where you wish us to deal with them you will forward to us all communications received from The Pension Regulator. 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 The Pension Regulator is not obliged to send us copies of all communications issued to you.

If the information required to complete the services set out above is received less than 5 days before the payroll date, we will endeavour to process the payroll to meet the agreed payroll date but we will not be liable for any costs or other losses arising if the payroll is late in these circumstances. We may charge an additional fee for work carried out in a shorter time period.

Limitation of liability

5. Benefits-in-kind Returns

Forms P11D and declaration P11D (b)) and class 1A national insurance contributions (NIC)

Recurring compliance work

We will prepare for your approval forms P11D on your behalf, as may be required for each employee including directors based on the accounts, information and explanations provided to us by you.

We will prepare for your approval form P11D (b) to include the class 1A NIC on benefits-in-kind (BiK) and expenses, both on forms P11D and included in payroll.

We will submit the forms P11D for any benefits/employees for whom benefits are provided but not payrolled with the form P11D (b) online after the form P11D (b) has been approved in writing by you.

We will prepare and send to you the P11D information for you to forward to your employees and directors by the statutory due date of 6 July following the end of the tax year.

We will calculate your class 1A NIC liability on the benefits and expenses both returned in forms P11D and included in payroll that you are obliged to pay HMRC by the due date and send payment instructions to you.

Ad hoc queries by way of telephone and email enquiries are not routine compliance and may result in additional fees. As indicated below, where appropriate we will aim to discuss and agree additional fees but it may not always be possible to agree these in advance and we reserve the right to charge you an additional fee for these queries.

Ad hoc and advisory work

Where you have instructed us to do so, we will provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These services will be subject to the terms of this engagement letter and standard terms and conditions of business unless we decide to issue a separate engagement letter. An additional fee may be charged for these services. Examples of such work include:

assisting you with calculating the values for tax and NIC of benefits-in-kind (BiK) provided to employees, including when provided by way of salary sacrifice and other optional remuneration arrangements
dealing with compliance checks or enquiries opened into the BiK returns by HMRC
preparing any amended returns that may be required and corresponding with HMRC as necessary
advising on PAYE settlement agreements and/or approved expenses scale rates
conducting PAYE and benefits health checks.

Where specialist advice is required, we may need to seek this from or refer you to appropriate specialists. We will only do this when instructed by the nominated person.

Changes in the law or public policy and practice

Your responsibilities

You are legally responsible for:

ensuring that your declaration on form P11D (b) is true to the best of your knowledge and belief, and therefore that the entries on the related forms P11D and amounts of benefits in kind and expenses in the payroll are correct and complete
filing any returns by the due date after the end of the tax year
paying class 1A NIC on time.

Failure to do any of the above may lead to penalties and/or interest.

Legal responsibility for approval of the return cannot be delegated to others. The nominated individual agrees to check that the forms that we have prepared for you are complete before they approve them.

To enable us to carry out our work you agree:

that all returns are to be made on the basis of full disclosure
to provide full information necessary for dealing with your BiK returns; we will rely on the information and documents being true, correct and complete, and will not audit the information or those documents
to notify us within 14 working days after the end of the tax year of all transactions or events that may need to be reflected in the forms P11D for the period, including details of all employees during the year and details of their remuneration packages
to authorise us to approach such third parties as may be appropriate that we consider necessary to deal with completing the BiK returns.

If the information required to complete the BiK returns set out above is received more than 14 days after the end of the tax year, we will still endeavour to process the information onto the BiK returns to meet the submission date but we will not be liable for any costs or other losses arising if submission is late in these circumstances. We may charge an additional fee in such circumstances.

Where you wish us to deal with HMRC communications you will forward to us all communications received from HMRC.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.

Limitation of liability

6. Value added tax (VAT)

Recurring compliance work

We will prepare/review your VAT returns/Intrastat returns/EC sales lists/MOSS returns on the basis of the information and explanations supplied by you. The first such return to be prepared/reviewed by us will be the return for the period ending as stated.

Based on the information that you provide to us, we will tell you how much 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.

Where appropriate, we will calculate the partial exemption annual adjustment. This annual adjustment will normally be made in the first VAT period ending after 1 March each year.

Where appropriate, we will calculate the annual Capital Goods Scheme adjustment. The adjustment will normally be made in the first VAT period ending after 1 March each year.

We will forward to you the completed return calculations for you to review before you provide written evidence of your approval, for onward transmission by us to HMRC.

When your VAT return calculations need to be uploaded to HMRC to comply with the “Making Tax Digital” (MTD) regulations, you must ensure that you use functionally compatible software and/or spreadsheets that are digitally linked to the accounts software and which can be submitted to HMRC via an application programme interface (API). If you require us to upload your VAT return calculations in accordance with the MTD requirements, you must provide us with all the necessary digital links to submit all the transaction records that are required by HMRC, together with confirmation that your digital records are complete and accurate.

Ad hoc queries by way of telephone and email enquiries are not routine compliance and may result in additional fees. As indicated below, where appropriate we will aim to discuss and agree additional fees but it may not always be possible to agree these in advance and we reserve the right to charge you an additional fee for these queries.

Ad hoc and advisory services

advising on ad hoc transactions and queries (including telephone conversations), preparing and submitting information in the relevant format to HMRC and calculating any related tax liabilities
reviewing and advising on a suitable partial exemption method to use in preparing the return
dealing with all communications relating to your VAT returns Intrastat returns/EC sales list returns/MOSS returns addressed to us by HMRC or passed to us by you, including training
making recommendations to you about the use of cash accounting, annual accounting, flat rate and other suitable methods of accounting for VAT
making recommendations to you about the use of VAT Mini One Stop Shop (MOSS) if you supply digital services to consumers in the EU
we do not advise on VAT excise duty/customs duty/landfill tax/insurance premium tax/aggregates levy/climate change levy and separate specialist advice should be taken in these areas.

Where the advice is provided in writing, the information provided and the query raised will be set out with our response to you.

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

We will accept no liability for losses arising from changes in the law (or the interpretation thereof) or practice or in public policy that are first published after the date on which the advice is given.

Your responsibilities

You are legally responsible for:

ensuring that your returns are correct and complete
filing any returns by the due date
making payment of tax on time.

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

Legal responsibility for approval of the return cannot be delegated to others. You agree to check that returns that we have prepared for you are complete before approving them.

To enable us to carry out our work you agree:

that all returns are to be made on the basis of full disclosure
that you are responsible for ensuring that the information provided is, to the best of your knowledge, accurate and complete. The returns are prepared/reviewed solely on the basis of the information provided by you and we accept no responsibility for any liabilities arising due to inaccuracies or omissions in the information you provide, which may lead to a misdeclaration on which penalties and interest may arise
to authorise us to approach such third parties as may be appropriate for information we consider necessary to deal with the returns
to provide us with all the records relevant to the preparation of your monthly/quarterly returns as soon as possible after the return period ends.We would ordinarily need a minimum of 21 days before submission to complete our work. If the records are provided later or are incomplete or unclear, thereby delaying the preparation/review and submission of the return, we accept no responsibility for any “default surcharge” penalty that may arise.Where feasible, we may agree to complete your return within a shorter period but may charge an additional fee for so doing.

You will keep us informed of material changes in circumstances that could affect your obligations, for example:

change in the nature or any addition to your business
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 which 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 (i.e. Capital Goods Scheme adjustments will apply).

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.

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.

If you provide digital services to consumers in the EU you are responsible for either registering for VAT in that member state or registering for MOSS in the UK.

If you are involved with any other business which 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.

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 any that you are not completely satisfied with, with HMRC.

Limitation of liability

6.1 Making Tax Digital for VAT (MTDFV)

Initial registration

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

We will prepare your MTD for VAT (MTDfV) returns. The first such return to be prepared by us will be the return for the period ending as stated.

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.

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.

Where appropriate, we will calculate the partial exemption annual adjustment. This annual adjustment will normally be made in the first VAT period ending after 1 March each year.

Where appropriate, we will calculate the annual Capital Goods Scheme adjustment. The adjustment will normally be made in the first VAT period ending after 1 March each year.

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.

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.

We will submit your MTDfV return data online to HMRC after the data to be included therein has been approved/on the basis of the data provided by you.

We will agree with you any supplementary information to be submitted on a voluntary basis with the MTDfV returns prior to submission.

Ad hoc queries by way of telephone and email enquiries are not routine compliance and may result in additional fees. As indicated below, where appropriate we will aim to discuss and agree additional fees but it may not always be possible to agree these in advance and we reserve the right to charge you an additional fee for these queries.

Ad hoc and advisory services

advising on ad hoc transactions and queries (including telephone conversations), preparing and submittinginformation in the relevant format to HMRC and calculating any related tax liabilities
reviewing and advising on a suitable partial exemption method to use in preparing the return
dealing with all communications relating to your MTDfV returns Intrastat returns/EC sales list returns/MOSS returns addressed to us by HMRC or passed to us by you
making recommendations to you about the use of cash accounting, annual accounting, flat rate and other suitable methods of accounting for VAT
making recommendations to you about the use of VAT Mini One Stop Shop (MOSS) if you supply digital services to consumers in the EU
we do not advise on VAT excise duty/customs duty/landfill tax/insurance premium tax/aggregates levy/climate change levy and separate specialist advice should be taken in these cases.
work required to rectify the position where your software is incompatible with our software.
reviewing your record keeping processes and providing advice on potential improvements to enable compliance with the MTDfV requirements, including digital links for the transfer of data between different software.

Where the advice is provided in writing, the information provided and the query raised will be set out with our response to you.

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

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

You are legally responsible for:

ensuring that your returns are correct and complete and in an appropriate digital format and capture the appropriate level of data
ensuring your record keeping system is compliant with the new requirements for the digital recording and transfer of data
filing any returns by the due date
making payment of tax on time.
- sales invoices
- purchase invoices
- bank statements
- details of bank and cash payments
- details of bank and cash receipts
- work-in-progress details
- access to your accounting records.

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

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.

Where we are keeping your digital records, you are responsible for providing us with the following information required for us to prepare the return:

We have also agreed that you will provide the following:

a record of the amounts owed to the business
a record of amounts owed by the business
a list of accruals
a list of prepayments
private use adjustments.

To enable us to carry out our work you agree:

that all returns are to be made on the basis of full disclosure
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
to authorise us to approach such third parties as may be appropriate for information we consider necessary to deal with the returns
to provide us with all the records relevant to the preparation of your monthly/quarterly/annual returns as soon as possible after the return period ends.We would ordinarily need a minimum of 21 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.Where feasible, we may agree to complete your return within a shorter period but may charge an additional fee for so doing.
to inform us that you have made the tax payment based on your calculated return.

You will keep us informed of material changes in circumstances that could affect your obligations, for example:

change in the nature or any addition to 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 which 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 (i.e. Capital Goods Scheme adjustments will apply to this or any other items that fall within the scope of the Capital Goods Scheme).

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.

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.

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.

Limitation of liability

7. Management Accounts

Our service to you

We will prepare from the information and explanations provided by you, your monthly/quarterly management accounts or periods that you instruct us to prepare.

We will discuss with you the management accounts/prepare a separate report and commentary on the figures for discussion with the board/management.

We will not attach a report to the management accounts.

We will not carry out any audit work as part of this assignment. To carry out an audit would entail additional work so that we could report on the truth and fairness of the accounts.

We have a professional duty to compile accounts that conform to generally accepted accounting principles. Where necessary we will inform you and suggest amendments be put through the accounts before being published. We have a professional responsibility not to allow our name to be associated with accounts that may be misleading. In extreme cases when this matter cannot be resolved, we will withdraw from the engagement and notify you in writing.

The management accounts are prepared for your internal use within your business by the directors. They should not be shown to any other party without our prior agreement.

Your Responsibilities

You are responsible for providing us with the necessary information and prime records for the preparation of the management accounts, including:

Sales invoices.
Purchase invoices.
Bank statements.
Details of bank and cash payments.
Details of bank and cash receipts.
Stock and work-in-progress details.
Access to your accounting records.

We have also agreed that you will provide the following:

Monthly records of receipts and payments reconciling the bank control account with the bank statements.
A record of the amounts owed to the business.
A record of amounts owed by the business.
A list of accruals.
A list of prepayments.

Limitation of liability

There are no third parties, this includes your shareholders, financial institutions and other businesses that we have agreed should be entitled to have access to, sight of, or rely on the work done pursuant to this engagement letter.

8. Budgeting and projections

Preparation of budgets and cash flows/profit forecasts

Our service to you

We will prepare from the information and explanations provided by you, cash flows/profit forecasts for the periods agreed.

We will discuss with you the assumptions that have been used.

We will not be carrying out any audit work as part of this assignment and accordingly we will not express an opinion on the forecasts.

We will attach a report to the forecasts highlighting the scope of the work we have undertaken, including any assumptions made. We will highlight

that no audit has been undertaken;
that the forecasts have been drawn up in accordance with the assumptions;
limitation of liability that applies; and
if we have a letter of engagement or not with any third party.

The forecasts are prepared solely for the confidential use of yourself and solely for the purpose of internal management of your business. It may not be relied upon by yourself for any other purpose whatsoever. Our report must not be recited or referred to in whole or in part in any other document.

Your Responsibilities

You are responsible for providing us with the information and explanations necessary for the preparation of cash flows/profit forecasts.

You are responsible for checking and agreeing the validity of the assumptions that are used in the preparation of the statements.

You agree not to submit the forecasts to any third party without our prior written approval.

The forecasts relate to future events and consequently actual results are likely to differ from the forecasts. We cannot accept any responsibility for any loss or damage occasioned to any person acting or refraining from acting as a result of any material or report contained in the forecasts.

Limitation of liability

9. Other services

There are many other areas where Evolution ABS Limited can be of assistance and it shall be pleased to discuss any matters with you. These other services include:

reports in support of returns or claims, e.g., insurance company certificates, government claims, etc.;
advice on financial matters;
advice on commercial and management matters;
management accounting, including such matters as cash flow statements, costing systems, etc., and advice on management;
advice on the selection and implementation of computer systems;
advice on how to set up, implement and train on, accounting and MTD for VAT systems appropriate to you and your skills;
investigations for special purposes, e.g., acquisitions of other businesses, or examination of specific aspects of your business;
advice on the selection and recruitment of staff;
meetings with you.

Version 2

September 2022

Terms and Conditions

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