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e-lite accounting service

Terms and Conditions

Applicable to sole proprietors and partnerships

Your Responsibilities
You have undertaken to make available to us, within six months from the accounting date, all the accounting records and related financial information necessary for the compilation of the accounts. You will make full disclosure to us of all relevant information. The accounts need to be approved by you before we are able to issue our report.

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

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

Our Responsibilities
We will compile your annual accounts based on the accounting records and the information and explanations given to us by you. We shall prepare draft annual accounts for your approval.

We will advise you as to the adequacy of your records for preparation of the annual accounts and make recommendations for improvements that we consider necessary. We shall not be responsible if, as a result of you not taking our advice, you incur losses or penalties.

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

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

We have a professional duty to compile accounts that conform with generally accepted accounting principles. Where we identify that the accounts do not conform to accepted accounting principles, or if the accounting policies adopted are not immediately apparent, this will be made clear in our report, if it is not clear in the accounts.

Personal Tax
We will prepare your personal income tax and capital gains tax return together with all supporting schedules and check H M Revenue & Customs’ calculation of your self-assessment of tax and Class 4 National Insurance Contributions.

We will forward to you your tax return form and supporting schedules for your approval and signature. Once the return has been approved and signed by you and returned to us, we will submit it to H M Revenue & Customs. You authorise us to file the return electronically.

We will tell you how much tax and National Insurance Contributions you should pay and when payments should be made. If appropriate we will initiate repayment claims when tax and National Insurance Contributions have been overpaid.

We will deal with H M Revenue & Customs regarding any amendments required to your return and prepare any amended returns that may be required.

We will advise as to possible claims and elections arising from the tax return and from information supplied by you. Where instructed by you, we will make such claims and elections in the form and manner required by H M Revenue & Customs.

You have asked us to undertake all correspondence with H M Revenue & Customs on your behalf. To avoid any problems would you please send to us any forms of correspondence received from H M Revenue & Customs as soon as you receive them. In particular would you please ensure that no payments are made to H M Revenue & Customs without our confirmation that the demands are correct.

You agree to provide full information necessary for dealing with your tax affairs and we will rely on the information and documents being true, correct and complete and will not verify the information or documents. You also agree that all returns are made on the basis of full disclosure of all sources of income, charges, allowances and capital transactions.

H M Revenue & Customs has powers to charge both interest and penalties if there is a delay in submitting a tax return. Such charges are automatic if the tax return is submitted after 31st January following the end of the tax year, or if any payments are made after the respective due dates. It is therefore important that all details required for the preparation of your tax return are forwarded to us as soon as possible after 5th April each year and by 30th September at the latest. If the information is received after that date, we will not accept responsibility for any penalties or surcharges charged by H M Revenue & Customs.

H M Revenue & Customs audits a number of tax returns each year, many of these audits are the result of a random selection. Assistance in respect of such an audit beyond the answering of straightforward queries regarding entries on the tax return is additional work and will result in separate charges. We will keep you fully informed before undertaking any extra work in respect of such an audit.

We will provide our professional services outlined in this letter with reasonable care and skill. However, we will not be responsible for any losses, penalties, surcharges, interest or additional tax liabilities arising from the supply by you or others of incorrect or incomplete information, or your or others’ failure to supply any appropriate information or your failure to act on our advice or respond promptly to communications from us or the tax authorities.

You agree that we can approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs.

We will submit form 64-8 to H M Revenue & Customs, which authorises H M Revenue & Customs to send us copies of formal notices. In practice, H M Revenue & Customs will treat this as authority to correspond with us, in which case they will not correspond with you except to the extent that the are formally required to do so. However, this authority does not apply to all H M Revenue & Customs correspondence, and even where it does, H M Revenue & Customs sometimes overlook it. You should therefore always send us the originals or copies of all communications you receive from H M Revenue & Customs.

We would emphasise that the aspects set out above do not include undertaking work in respect of claims for Child Tax Credit and Working Tax Credit. If you would like us to provide assistance in making claims for such tax credits please let us know so that we can discuss how we can help.

Partnership Tax
We will prepare the income tax and capital gains tax computations based on the partnership accounts from the accounting records and other information and explanations provided by you.

We will prepare the firm’s annual partnership return, including the partnership statement of total income, gains losses, tax credits and charges of the firm for each period of account ending in the return period.

We will send you the tax return and supporting schedules for your approval and signature. Once the return has been approved and signed by you and returned to us, we will submit it, with the accounts and computations, to H M Revenue & Customs. You authorise us to file the return electronically.

We will advise all the partners who were partners of the firm during the period of their respective shares of the firm’s total income, gains, losses, tax credits and charges so that they are able to file their personal self-assessment tax returns within the relevant time period.

We will deal with H M Revenue & Customs regarding any amendments required to the partnership tax return and prepare any amended returns that may be required.

We will advise as to possible claims and elections arising from the tax return and from information supplied to you. Where instructed by you, we will make such claims and elections in the form and manner required by H M Revenue & Customs.

We will deal with all communications relating to the partnership return addressed to us by H M Revenue & Customs or passed to us by you. However, if H M Revenue & Customs choose the partnership tax return for enquiry, this work will be the subject of a separate assignment and we will seek further instructions from you. Assistance in respect of such an enquiry beyond the answering of straightforward queries regarding entries on the tax return is additional work and will result in separate charges. We will keep you fully informed before undertaking any extra work in respect of such an enquiry.

We will prepare the tax provisions and disclosures to be included in the partnership’s accounts. You agree to provide full information necessary for dealing with the partnership’s affairs; we will rely on the information and documents being true, correct and complete and will not verify the information or documents. You also agree that all returns are to be made on the basis of full disclosure of all sources of income, charges, allowances and capital transactions.

We will undertake correspondence with H M Revenue & Customs on the partnership’s behalf. To avoid any problems would you please send to us any forms or correspondence received from H M Revenue & Customs as soon as you receive them. In particular please ensure that no payments are made to H M Revenue & Customs without our confirmation that the demands are correct.

H M Revenue & Customs have powers to charge both interest and penalties if there is a delay in submitting a tax return. Such charges are automatic if the tax return is submitted after 31st January following the end of the tax year, or if any payments are made after the respective due dates. For partnership penalties, the amount due is multiplied by the number of partners. Delays in submitting the partnership return may also have an effect on the returns of all the partners, with the possibility of penalties, interest and surcharges being payable by each individual partner.

It is therefore important that all details required for the preparation of your tax return are forwarded to us as soon as possible after 5th April each year and by 30th September at the latest. If the information is received after that date, we will not accept responsibility for any penalties or surcharges charged by H M Revenue & Customs.

You agree that we can approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs and undertake to authorise such third parties to communicate directly with us.

We will submit form 64-8 to H M Revenue & Customs, which authorises H M Revenue & Customs to send us copies of formal notices. In practice H M Revenue & Customs will treat this as authority to correspond with us, in which case they will not correspond with the partnership except to the extent that they are formally required to do so. However, this authority does not apply to all H M Revenue & Customs correspondence, and even where it does, H M Revenue & Customs sometimes overlook it. You should therefore always send us the originals or copies of all communications you receive from H M Revenue & Customs.

Applicable to Limited Companies

Your Responsibilities as Directors
As directors of the company, you are required to prepare accounts for each financial year that give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those accounts, you are required to:

a. select suitable accounting policies and then apply them consistently;

b. make judgements and estimates that are reasonable and prudent; and

c. prepare the accounts on the going concern basis unless it is appropriate to presume that the company will continue in business.

You are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the accounts comply with the Companies Act 1985 (the Act).

You are also responsible for safeguarding the assets of the company and hence for taking reasonable steps to ensure the company’s activities are conducted honestly and for the prevention and detection of fraud and other irregularities.

You are responsible for ensuring that the company complies with 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.

You are responsible for determining whether, in respect of the year, the company meets the conditions for exemption from an audit set out in section 249A(1) of the Act, namely that:

a. it qualifies as a small company in relation to that year for the purposes of section 247;

b. its turnover in that year is not more than £5,600,000; and

c. its balance sheet total for the year is not more than £2,800,000.

You are responsible for determining whether, in respect of the year, the exemption is not available for any of the reasons set out in section 249B of the Act, namely that at no time during the year was the company:

a. a public company;

b. a person that had permission under Part 4 of the Financial Services and Markets Act to carry on a regulated activity;

c. carrying on an insurance market activity;

d. enrolled in the list maintained by the Insurance Brokers Registration Council under section 4 of the Insurance Brokers Registration Act 1977;

e. an appointed representative, within the meaning of section 39 of the Financial Services and Markets Act 2000;

f. a special register body as defined in section 117(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 or an employers’ association as defined in section 122 of that Act;

g. a member of a group that exceeded the group exemption limits; or

h. a member of an ineligible group.

The exemption is available only if you, as directors, sign a declaration on the balance sheet to state that:

a. for the year in question, the company is eligible to take advantage of the audit exemptions;

b. the members have not required the company to obtain an audit of its accounts for the year in accordance with section 249B(2) of the Companies Act 1985; and

c. you acknowledge your obligations to keep proper accounting records and to prepare accounts which give a true and fair view of the state of the company’s affairs and of its profit or loss for the period.

You have undertaken to make available to us, as and when required, all the company’s accounting records and related financial information, including minutes of management and shareholders’ meetings, necessary to carry out our work. You will make full disclosure to us of all relevant information.

Our Responsibilities as Accountants
As the company is totally exempt from audit, we have no statutory responsibilities to the company at all. Our only responsibilities arise from those specifically agreed upon between us in respect of other professional services.

We do not have any responsibility to report whether any shareholder of the company has notified the company that he or she requires an audit. Consequently we have no responsibility to carry out any work in respect of this matter.

Should our work indicate that the company is not entitled to exemption from an audit of the accounts, then we will inform you of this. In these circumstances, if appropriate, we will discuss with you the need to appoint us as auditors.

We have a professional duty to prepare accounts that conform with generally accepted accounting principles. Furthermore, as directors, you have a duty to prepare accounts that comply with the Companies Act 1985 and applicable accounting standards. Where we identify that the accounts do not conform to accepted accounting principles or if the accounting policies adopted are not immediately apparent, this will be made clear in our report, if it is not clear in the accounts.

Our work will not be an audit of the accounts in accordance with auditing standards. Accordingly, we will not obtain any evidence relating to entries in the accounting records, or to the accounts or to the disclosures in the accounts. Nor will we make any assessment of the estimates and judgements made by you in the preparation of the accounts. Consequently our work will not provide any assurance that the accounting records or the accounts are free from material misstatement, whether caused by fraud, or other irregularities or error. In addition, we have no responsibility to determine whether you have maintained proper accounting records in accordance with section 221 of the Act and we will not address this point unless you specifically request us in writing to do so.

Since we have not carried out an audit, nor confirmed in any way the accuracy or reasonableness of the accounting records maintained by the company, we are unable to provide any assurance as to whether the accounts that we prepare from those records present a true and fair view.

As part of our normal procedures when preparing the accounts, we will attach an accountant’s report to them. This report will state that they have been prepared from the books and records of the company and from information supplied by the directors. This report should not be filed with the accounts at Companies House.

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

Corporation Tax
We will prepare from the accounts and other information and explanations provided by you the company’s corporation tax return and computations, together with all supporting schedules and, where necessary, amended returns.

We will send you the tax return and supporting schedules for you to approve and sign and return to us. We will then submit the return, with the accounts and computations, to H M Revenue & Customs. You authorise us to file the return electronically.

It should be recognised that in law a taxpayer cannot contract out of his fiscal responsibilities and that computations and return forms are prepared by us as agent for the company. You are legally responsible for making correct returns and for payment of tax on time. If we ask you for information to complete the tax return and it is not provided within the time-scale requested, so that the preparation and submission of the return are delayed, we accept no responsibility for any penalty or interest that may arise.

We will advise you of the amounts of corporation tax to be paid and the dates by which the company should make the payments. Where appropriate we will initiate repayment claims when tax has been overpaid.

Under certain circumstances, some large companies may need make quarterly corporation tax payments in advance of the normal corporation tax due date. To enable us to calculate whether quarterly tax payments are due and to determine the amounts to be paid, you agree to keep us fully informed of changes to the number of associated companies and any extraordinary changes to income trends. Where appropriate, you may wish to provide us with quarterly management information to enable us to monitor the position.

You must inform us immediately if the company pays or receives any interest or makes any other payments, or transfers any asset to any shareholder.

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

Applicable to all clients

Excluded Services
The company will be responsible for other matters required by law, such as:

a. forms CT61;

b.PAYE including year end returns and matters relating to your employees;

c. forms P11D;

d. obligations under IR35. Where an individual provides personal services through an intermediary such as a company, that company may have additional tax and filing obligations under the IR35 rules. Unless specifically agreed with us in writing, the company shall remain responsible for all such obligations arising;

e. Returns for sub-contractors; and

f. VAT returns.

We will be pleased to advise and/or offer assistance on any of these matters if so requested.

To enable us to carry out our work you agree:

a. that all returns are to be made on the basis of full disclosure of all sources of income, charges, allowances and capital transactions. You will provide full information necessary for dealing with the company’s affairs: we will rely on the information and documents being true, correct and complete and will not audit the information or those documents;

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

c. to provide us with information in sufficient time for the company’s tax return to be completed and submitted by the due date. In order to do this, we need to receive all relevant information within six months of the year end each year;

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

e. to keep us informed about significant transactions or changes in circumstances.

We will submit form 64-8 to H M Revenue & Customs, which authorises H M Revenue & Customs to send us copies of formal notices. In practice, H M Revenue & Customs will treat this as authority to correspond with us, in which case they will not correspond with you except to the extent that they are formally required to do so. However, this authority does not apply to all H M Revenue & Customs correspondence, and even where it does, H M Revenue & Customs sometimes overlook it. You should therefore always send us the originals or copies of all communications you receive from H M Revenue & Customs.

Professional Obligations
We will observe the byelaws, regulations and ethical guidelines of the Institute of Chartered Accountants in England and Wales and accept instructions to act for you on the basis that we will act in accordance with those guidelines. Copies of these requirements are available for inspection in our offices.

Where you give us confidential information we shall at all times keep it confidential, except as required by law or as provided for in regulatory, ethical or other professional pronouncements applicable to this engagement.

We reserve the right to act during this engagement for other clients whose interests may be adverse to yours. We will notify you immediately should we become aware of any conflict of interest to which we are subject in relation to you.

Investment Advice
Although we are not authorised by the Financial Services Authority (FSA) to conduct investment business, we are licensed by the Institute of Chartered Accountants in England and Wales to provide certain limited investment services where these are complementary to, or arise out of, the professional services we are providing to you.

In particular, we may:

a. advise you on investments generally, but not recommend a particular investment or type of investment;

b. refer you to a Permitted Third Party (PTP) (an independent firm authorised by the FSA), assist you and the PTP during the course of any advice given by that party and comment on, or explain, the advice received (but not make alternative recommendations). The PTP will issue you with his own terms and conditions letter, will be remunerated separately for his services and will take full responsibility for compliance with the requirements of the Financial Services and Markets Act 2000;

c. advise you in connection with the disposal of an investment, other than your rights in a pension policy or scheme;

d. advise and assist you in transactions concerning shares or other securities not quoted on a recognised exchange;

e. assist you in making arrangements for transactions in investments in certain circumstances; and

f. manage investments or act as trustees (or donee of a power of attorney) where decisions to invest are taken on the advice of an authorised person.

In respect of corporate clients we may also, on the understanding that the shares or other securities of the company are not publicly traded:

a. advise the company, existing or prospective shareholders in relation to exercising rights, taking benefits or share options, valuations and methods of such valuations;

b. arrange any agreements in connection with the issue, sale or transfer of the company’s shares or other securities;

c. arrange for the issue of new shares; and

d. act as the addressee to receive confirmation of acceptance of offer documents, etc.

In some circumstances, commissions or other benefits may become payable to us in respect of introductions to other professionals or transactions we arrange for you, in which case you will be notified in writing of the amount of any such commissions or benefits.

Client Monies
We may, from time to time, hold money on your behalf. Such money will be held in trust in a client bank account, which is segregated from the firm’s funds. The account will be operated, and all funds dealt with, in accordance with the Clients’ Money Regulations of the Institute of Chartered Accountants in England and Wales.

If the total sum of money held on your behalf exceeds £10,000 for a period of more than 30 days, or such sum is likely to be held for more than two months, then the money will be placed in an interest bearing client bank account. All interest earned on such money will be paid to you. Subject to any tax legislation, interest will be paid gross.

Fees
Our fees are computed in accordance with the prevailing e-lite service price list as set out in our brochure and web site.

If it is necessary to carry out work outside the responsibilities outlined in this letter, additional fees will arise. Accordingly we would like to point out that it is in your interest to ensure that your records, etc are completed to the agreed stage.

We request that clients make arrangements to pay their fee on a monthly standing order. The amount payable will be estimated based on the anticipated turnover and service requirements. Any amendments required when accounts have been completed will be billed on presentation of the accounts/returns for signing, for settlement within 30 days.

We reserve the right to charge interest at the rate for the time being applicable under the Late Payment of Commercial Debts (Interest) Act 1998 in the case of overdue accounts. We also reserve the right to terminate our engagement and cease acting if settlement of our fees is unduly delayed. However, it is not our intention to use these rights in a way that is unfair or unreasonable.

Retention of and Access to Records
During the course of our work we will collect information from you and others acting on your behalf and will return any original documents to you following the preparation of your accounts and/or returns. You should retain these records for at least seven years from the end of the accounting year to which they relate.

Whilst certain documents may legally belong to you, unless you tell us not to, we intend to destroy correspondence and other papers that we store which are more than seven years old, other than documents which we think may be of continuing significance. If you require the retention of any document, you must notify us of that fact in writing.

Quality Control
As part of our ongoing commitment to providing a quality service, our files are periodically subject to an independent regulatory or quality control view. Our reviewers are highly experienced and professional people and, of course, are bound by the same requirements for confidentiality as our directors and staff.

Customer Service
We are committed to providing a high standard of customer service. If you have any ideas as to how our service to you could be improved, or if you are dissatisfied with the service you are receiving, please let us know. In the event that you have a complaint, we will look into this carefully and promptly and do all we can to explain the position to you or address your concerns. If you are still not satisfied you may of course make a complaint to the Institute of Chartered Accountants in England and Wales.

Applicable Law
These terms and conditions are governed by, and construed in accordance with, English law. The Courts of England will have exclusive jurisdiction in relation to any claim, dispute or difference concerning this engagement letter and any matter arising from it. Each party irrevocably waives any right it may have to object to any action being brought in those courts, to claim that the action has been brought in an inappropriate forum, or to claim that those courts do not have jurisdiction.

Internet Communication
Internet communications are capable of data corruption and therefore we do not accept any responsibility for changes made to such communications after their dispatch. We do not accept responsibility for any errors or problems that may arise through the use of internet communication and all risks connected with sending commercially sensitive information relating to your business are borne by you.

It is the responsibility of the recipient to carry out a virus check on any attachments received.

Data Protection Act 1998
We may obtain, use, process and disclose personal data about you in order that we may discharge the services agreed under this engagement letter, and for other related purposes including updating and enhancing client records, analysis for management purposes and statutory returns, crime prevention and legal and regulatory compliance. You have a right of access, under data protection legislation, to the personal data that we hold about you. We confirm that when processing data on your behalf we will comply with the provisions of the Data Protection Act 1998.

Contracts (Rights of Third Parties) Act 1999
Persons who are not party to this agreement shall have no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this agreement. This clause does not affect any right or remedy of any person that exists or is available otherwise than pursuant to that Act.

The advice that we give to you is for your sole use and does not constitute advice to any third party to whom you may communicate it. We accept no responsibility to third parties for any aspect of our professional services or work that is made available to them.

Proceeds of Crime Act 2002 and Money Laundering Regulations 2003
In common with all accountancy and legal practices we are required by the Proceeds of Crime Act 2002 and Money Laundering Regulations 2003 to:

a. maintain identification procedures for all new clients;

b. maintain records of identification evidence;

c. report to the Serious Organised Crime Agency (SOCA) any suspicion relating to money laundering, theft or any criminal activity. There is no de minimis limit allowed for in the legislation and means that any criminal act which results in a gain of any kind will almost certainly result in a money laundering offence. Failure on our part to make a report where we have knowledge or reasonable grounds for suspicion would constitute a criminal offence.

The offence of money laundering is defined as including concealing, converting, using or possessing the benefits of any activity that constitutes a criminal offence in the UK. It also includes involvement in any arrangement that facilitates the acquisition, retention, use on control of such a benefit. This definition is very wide and would include, for example, such crimes as:

deliberate tax evasion
deliberate failure to inform the tax authorities of known underpayments or excessive repayments
fraudulent claiming of benefits or grants
obtaining a contract through bribery

We are obliged by law to report any instances of money laundering to SOCA without your knowledge or consent. In fact, we may commit the criminal offence of “tipping off” if we were to inform you that a report has been made. In consequence, neither the firms’ principals or staff may enter into any correspondence or discussions with you regarding such matters.

We are not required to undertake work for the sole purpose of identifying suspicions of money laundering. We shall fulfil our obligations under the Proceeds of Crime Act 2002 in accordance with the guidance published by our professional body. However, we would emphasise that where errors or mistakes are discovered during the course of our work there will not be a need to report provided that the matters are corrected, for example, where information is to be submitted to H M Revenue & Customs. Errors or mistakes on returns already submitted can also be corrected without having to be reported. We therefore do not expect to have to make reports to SOCA other than in exceptional circumstances, however we do take our obligations under the regulations seriously and will comply if a report is warranted.

Limitation of Liability
We shall provide our professional services having undertaken all reasonable care and skill. However, we will not be held responsible for any losses arising from the supply by you or others of incorrect or incomplete information, or your or others’ failure to supply any appropriate information or your failure to act on our advice or respond promptly to communications from us or other relevant authorities.

You agree to hold harmless and indemnify us, our directors and staff, against any misrepresentation (intentional or unintentional) supplied to us orally or in writing in connection with this agreement. You have agreed that you will not bring any claim against any of our employees on a personal basis in respect of professional services provided by us.

Agreement of Terms
On commencement of our appointment you will be sent a copy of these terms and conditions by email to sign and return to us. On acceptance, these terms and conditions will remain effective from the date of signature until it is replaced. Either party may vary or terminate our authority to act on your behalf at any time without penalty. Notice of termination must be given in writing.

Keens Shay Keens Limited is registered in England, Company No. 4569403 Registered office: Christchurch House, Upper George Street, Luton, Beds. LU1 2RS

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