Anti Money Laundering Legislation

 

All accountants must comply with onerous duties implied by the Proceeds of Crime Act 2002, the Terrorism Act 2000 and the Money Laundering Regulations 2007 (the “Anti Money Laundering Page | 2 Legislation”), which are intended to inhibit the activities of terrorist and other criminals by denying them access to technical expertise. If we fail to perform these duties, we risk imprisonment Before we accept your instructions, we may need to obtain ‘satisfactory evidence’ to confirm your identity. In certain circumstances, we may need to obtain evidence confirming the identities of third parties, the sources of any funds or other property, the purpose of any instructions or any other matter. We may also need to obtain such evidence after we have begun to act on your instructions. We assume that our clients are honest and law abiding. However, if at any time, there appear to be grounds to suspect (even if we do not actually suspect) that your instructions relate to ‘criminal property’ we are obliged to make a report to the Serious Organised Crime Agency (‘SOCA’) but we are prohibited from telling you that we have done so. In such circumstances, we must not act on your instructions without consent from SOCA. If Soca do not refuse consent within 7 working days we may continue to act. If SOCA issue a refusal within that time, we must not act for a further 31 days from the date of refusal. ‘Criminal property’ is property in any legal form, whether money, real property, rights or any benefit derived from criminal activity. It does not matter who carried out the criminal activity or how removed the property is from the original crime. Even if you are honest in your dealings, if your property represents a benefit from someone else’s crime, we must still make a report. Activity is considered ‘criminal’ if it is

All services

 

Your responsibilities:

  1. You have undertaken to make available to me, as and when required, all the accounting records and related financial information necessary for the compilation of the accounts. You will make full disclosure to me of all relevant information.

  2. You are legally responsible for ensuring that, to the best of your knowledge and belief, financial information, whether used by the business or for the accounts, is reliable. You are also responsible for ensuring that the activities of the business are conducted honestly and that its assets are safeguarded, and for establishing arrangements designed to deter fraudulent or other dishonest conduct and to detect any that occur.

  3. You are responsible for ensuring that the business complies with the laws and regulations applicable to its activities, and for establishing arrangements designed to prevent any non-compliance with laws and regulations and to detect any that occur.

  4. 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.

  5. You are responsible for ensuring that your self-assessment tax returns are correct and complete

  6. You are responsible for filing any returns by the due date

  7. You are responsible for paying tax on time.

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

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

  10. 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.

Limitation of liability

  1. Our aggregate liability to you or any other party, of whatever nature, whether in contract, tort or otherwise for any losses whatsoever and howsoever caused arising from or in any way connected with the services described within this engagement letter shall not exceed our fees.

  2. Once it has been agreed, this letter and the attached Standard Terms of Business will remain effective until they are replaced. We shall be grateful if you could confirm your agreement to these terms by signing the enclosed copy of this letter and returning it to us immediately.

  3. We reserve the rights to increase our prices as per inflation or any foreseeable or unforeseeable circumstances.

 

Our responsibilities for the preparation of accounts

  1. I will use reasonable skill and care in the preparation of your accounts but will not be responsible for errors arising from incorrect information supplied by you.

  2. I will report, with any variations that we consider may be necessary, that in accordance with your instructions and in order to assist you to fulfil your responsibilities, I have compiled, without carrying out an audit, the accounts from your accounting records and from the information and explanations supplied to us.

  3. I have a professional duty to compile accounts which conform with ‘Generally Accepted Accounting Principles’ (GAAP). Where I identify that the accounts do not conform to accepted accounting principles, or if the accounting policies adopted are not immediately apparent, this will be made clear in my report, if it is not clear in the accounts.

  4. We will prepare the business accounts in accordance with [FRS 102, FRS 105, generally accepted accounting standards] from the books, accounting records and other information and explanations provided to us by you and/or by others on your behalf.

  5. We will complete the writing up of your books and records in so far as they are incomplete when presented to us. These will be from the accounting information and records you supply.

  6. I will not carry out an audit and therefore will not verify the assets and liabilities of the business nor any items of income or expenditure.

 

Recurring compliance work – tax

 

I 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, we will submit your returns to HMRC. 

 

I will calculate your income tax, high-income child benefit charge, national insurance contributions (NIC) and any capital gains tax liabilities, and tell you how much you should pay and when. Where instructed by you, I will advise on the interest and penalty implications if tax or NIC is paid late. I 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, 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.

 

Payroll

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

  1. I will prepare your UK payroll for each payroll period to meet UK employment tax requirements specifically:

  2. calculating the pay as you earn (PAYE) deductions including at the Scottish rate of income tax if applicable;

  3. calculating the employees’ national insurance contributions (NIC) deductions;

  4. calculating the employer’s NIC liabilities;

  5. calculating statutory payments – for example, statutory sick pay and/or statutory maternity pay;

  6. calculating reclaims of statutory payment – for example, maternity payments;

  7. 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 your provide;

  8. claiming employment allowance;

  9. calculating, if appropriate, apprenticeship levy;

  10. calculating other statutory and non-statutory deductions; and

  11. submitting information online to HMRC under real-time information (RTI) for PAYE

  12. I 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:

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

  14. [the data included within each] full payment submission (FPS) for taxable pay and payrolled benefits for each employee. 

  15. a payslip for each employee unless not required;

  16. a P45 for each leaver;

  17. a report showing your PAYE and NIC liability student loan and apprenticeship levy and due date for payment; and

  18. a report showing pension contributions payable in respect of each employee to the respective workplace pension scheme(s) of which they are members and the due date(s) for payment.

  19. I will submit FPSs online to HMRC [after the data to be included therein has been approved/on the basis of the data provided] [delete as appropriate], 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 your attention is drawn to your legal responsibilities as set out at paragraphs 14 and 15 below.

  20. 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.)

  21. I will submit EPSs to HMRC [after the data to be included therein has been approved/on the basis of the data provided] [delete as applicable] 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 at paragraphs 14 and 15 below.

  22. At the end of the payroll year I will:

  23. prepare the final FPS (or EPS) and submit this to HMRC [after the data to be included therein has been approved/on the basis of the data provided] [delete where applicable] 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 at paragraphs 16 and 17 below

  24. 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

  25. 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 (Include if payrolling BiK and your payroll software will not show this information on final payslips for the tax year.)]

  26. 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 (Include if BiK are payrolled and amend if client wants the class 1A figures every month. Modify if practitioner will complete and submit P11D(b)]

  27. 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 (Include to pick up expenses accounted for in the payroll for tax but subject to class 1A NIC and amend if client wants the class 1A figures every month. Modify if practitioner will complete and submit P11D(b)]

  28. 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 (Include to pick up expenses accounted for in the payroll for class 1 NIC but included on P11D for tax – for example, non-business element of home telephone bills in the name of employee. Modify if practitioner will complete and submit P11D(b)]

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

  30. 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.]

  1. Your responsibilities

  2. You are legally responsible for:

  3. ensuring that the data in your payroll submissions is correct and complete;

  4. making any submissions by the due date;

  5. paying tax and NIC on time.

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

  7. 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.] [Delete if inappropriate]

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

  9. To enable us to carry out our work you agree:

  10. that all information required to be delivered online is submitted on the basis of full disclosure;

  11. 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;

  12. to agree with us the name[s] of the person[s] authorised by you to notify us of changes in employees and in rates of pay. We will process the changes only if notified by that/those individual[s];

  13. to advise us in writing of changes of payroll pay dates and workplace pension scheme contribution dates;

  14. to notify us at least 7 working days [or such other period as agreed with 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:

  15. all new employees (including full names, address, date of birth, gender, national insurance number) and details of their remuneration packages

  16. all leavers and any termination payments

  17. all changes to remuneration packages

  18. all pension scheme changes

  19. all changes to benefits and expenses reportable under an existing payrolling benefits and expense online service registration

  20. irregular and/or ad hoc payments and the dates to be paid;

  21. to [approve/provide the data required to complete] [delete as appropriate]:

  22. in-year FPS by at least 7 working days prior to payroll pay dates so that they can be submitted on or before payday, or as agreed with us

  23. in-year EPS by at least 7 days prior to 19th of the month following the tax month

  24. final FPS (or EPS when applicable) for the year at least 7 days prior to 19 April following the end of the tax year

  25. EYU within 14 days;

  26. to authorise us to approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs.

  27. You will keep me 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.

  28. 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.

VAT

  1. I will [prepare/review] your [monthly/quarterly/annual] 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.

  2. Based on the information that you provide to me, I will tell you how much you should pay and when. If appropriate, I will initiate repayment claims where tax has been overpaid. I will advise on the interest and penalty implications if VAT is paid late.

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

  4. 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.