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The main tax and accounting bodies have released a new guidance on letters of engagement for tax practitioners.
This replaces the guidelines issued in 2001, and it was the result of a major redrafting exercise.
It is designed to be user-friendly and more in line with commercial practices, and it is intended to be easily adopted with minimal modification by small practices.
The chairman of the joint organisations' working party that undertook the rewrite, Mark Lee, said: 'The professional bodies are confident that the updated guidance and engagement letter will be a practical and helpful tool for tax practitioners and their clients'.
A three-step approach has been adopted for the rewritten guidance and its accompanying draft letters:
1. Identification of the client and whose instructions will be accepted when, for example, acting for a couple, a family, a group or a partnership. There is also a summary of the basis on which fees will be charged, including any estimate or fee quote, and an indication of who is responsible for fees.
2. A schedule that sets out the practitioner's standard terms and conditions.
3. Further schedules that detail the nature and scope of the services to be carried out and the responsibilities of each party. The draft letters' schedules of service cover the most common recurring compliance work: personal tax for individuals, sole traders and couples; trusts and estates, partnerships, limited liability partnerships, corporation tax, payroll services, benefits in kind returns and payments of Class 1A NIC, VAT and other indirect taxes.
(A schedule for tax credit work will follow. There are also two schedules for non
