Schedule of Services for Letters of Engagement (Self Assessment Tax Return/Sole Traders/Partnerships)

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 (income and expenditure account and balance sheet) of your business 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 accounts for your approval.

We have agreed that you will be responsible for:

  1. Maintaining records of all receipts and payments of cash.
  2. Maintaining records of invoices issued and received.
  3. Maintaining records for VAT purposes, Making Tax Digital for VAT (MTDfV) compliant where appropriate, unless we are instructed to prepare your VAT records.
  4. Reconciling balances monthly/annually with the bank statements.
  5. Preparing a record of business mileage undertaken in the year.
  6. Preparing a record of hours per month worked at home if you wish to claim for business use of your home.
  7. Preparing details of any loan interest paid.
  8. 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.
  9. 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 business, 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 or irregularities on the part of your employees.

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 nor to the specific rules relating to the cash accounting regime 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 user of the report is the proprietors. The report will be addressed to the proprietors

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 theses services. Examples of such work include:

  1. 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
  2. advising on ad hoc opening balance adjustments required to your digital records and making the amendments if instructed to do so
  3. 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. Income Tax

Recurring compliance work

Where you have a profit or loss share from the accounts of an unincorporated business, the profit from accounts prepared under generally accepted accounting principles may require adjustment to arrive at the profit figure assessed for tax. Where necessary we will prepare the computations for this adjustment from the accounting records and other information and explanations provided by you.

We will prepare your self assessment tax returns together with any supplementary pages required from the information and explanations that you provide to us. After obtaining your approval and signature, we will submit your returns to HMRC.

We will calculate your income tax, high-income child benefit charge (if applicable), national insurance contributions (NIC) and any capital gains tax liabilities, and tell you how much you should pay and when.Where instructed by you we will advise on the interest and penalty implications if tax or NIC is paid late. We will also check HMRC’s calculation of your tax and NIC liabilities and initiate repayment claims if tax or NIC has been overpaid.

Other than tax credits and universal credit (see below), 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.

We will review PAYE notices of coding provided to us by you and advise accordingly. Note HMRC no longer sends copies of notices and coding to agents.

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:

  1. advising on ad hoc transactions (for example, the sale of assets) and queries (including telephoneconversations), preparing and submitting information in the relevant format to HMRC and calculating any related tax liabilities
  2. dealing with any enquiry opened into your tax return or tax affairs by HMRC
  3. preparing any amended returns that may be required and corresponding with HMRC as necessary
  4. advising on tax credits and universal credit.

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 you.

Tax credits and universal credit

We will supply you with the figures you require from your tax return to submit your tax credit or universal credit applications at your request. Tax credits and universal credit are, in effect, a social security benefit. Your entitlement or otherwise will depend not only on your own circumstances but also those of your household.

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

You are legally responsible for:

  1. ensuring that your self-assessment tax returns are correct and complete
  2. filing any returns by the due date
  3. paying tax on time.

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

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

To enable us to carry out our work you agree:

  1. that all returns are to be made on the basis of full disclosure of all sources of income, charges, allowances and capital transactions
  2. to provide all information necessary for dealing with your affairs: we will rely on the information and documents being true, correct and complete and will not audit the information or those documents
  3. to authorise us to approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs
  4. to provide us with information in sufficient time for your tax return to be completed and submitted by the due date of 31 January 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 the latest. Where feasible we may agree to complete your return within a shorter period but may charge an additional fee for doing so.

You will keep us informed of material changes in your circumstances that could affect your tax liability. If you are unsure whether the change is material 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, tax codes 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 employment taxes, pensions (including auto-enrolment) and the assessment of the tax status of your workers, including domestic staff. 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.

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.

You and your spouse/partner

Because of the possible effect on your tax position and so that we are able to act in your best interests, we will advise you and your spouse/partner on the basis that you are a family unit. This means that we may deal directly with either of you and discuss with either of you each other’s tax liabilities and financial affairs. You authorise us to discuss your tax affairs with your spouse/partner by signing the declaration on the Letter of Engagement.

So that we can act for you as a couple in respect of any joint claims then unless you specifically tell us otherwise, we will take any instructions, information or explanations that either of you gives us about that claim to be on behalf of you both. We will also treat any joint claim documents that are signed by either of you to be on behalf of both of you, unless you tell us that is not the case.

If for any reason a conflict of interest arises between you then we reserve the right to advise one or other of you to seek independent advice, or to stop acting for both of you.

3. Payroll

3.1. 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:

  1. calculating the pay as you earn (PAYE) deductions including at the Scottish rate of income tax if applicable
  2. calculating the employees’ national insurance contributions (NIC) deductions
  3. calculating the employer’s NIC liabilities
  4. calculating statutory payments – for example, statutory sick pay and/or statutory maternity pay
  5. calculating reclaims of statutory payment – for example, maternity payments
  6. 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
  7. claiming employment allowance
  8. calculating, if appropriate, apprenticeship levy
  9. calculating other statutory and non-statutory deductions
  10. 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:

  1. payroll summary report showing the reconciliation from gross to net for each employee and all relevant payroll totals
  2. 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:

  1. 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
  2. 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
  3. 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
  4. 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
  5. 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
  6. 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 partners 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:

  1. 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
  2. dealing with any compliance check or enquiry by HMRC into the payroll returns
  3. preparing and submitting any amended returns or data for previous tax years and corresponding with HMRC as necessary
  4. helping with setting up and administering workplace pension schemes, including referring you to appropriate specialists where necessary
  5. 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
  6. 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)
  7. assisting you in the operation of the Construction Industry Scheme (CIS) for subcontractors
  8. conducting PAYE, and benefits and expenses health checks
  9. 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:

  1. ensuring that the data in your payroll submissions is correct and complete
  2. making any submissions by the due date
  3. 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:

  1. that all information required to be delivered online is submitted on the basis of full disclosure
  2. 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
  3. the partners 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
  4. to advise us in writing of changes of payroll pay dates and workplace pension scheme contribution dates
  5. 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:
    • 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;
  6. to provide the data required to complete:
    • 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.
  7. to authorise us to approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs.

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

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.

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

3.2. 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:

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

We will include the pension payments on the following documents:

  1. the payroll summary report showing the reconciliation from gross to net for each employee and all relevant payroll totals
  2. 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:

  1. providing factual information about pension schemes
  2. helping you to compare schemes
  3. referring you to a specialist adviser
  4. 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 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:

  1. dealing with any enquiry from The Pensions Regulator
  2. 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

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:

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

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

  1. 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
  2. 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:

  1. 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
  2. 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:

  1. 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
  2. the partners 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)
  3. to advise us in writing of changes of payroll pay dates
  4. 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

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.

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