Engagement Letters

On 27 April 2020 the ATT and CIOT issued an update of the Engagement letters guidance for members.  This follows the last major review in 2018 and was produced by a collaborative working party of ATT, CIOT, ACCA, AAT and STEP. 

Note that there is no expectation that members will refresh their engagement letters with all clients as a result of the current update. They can be used where new engagement letters need to be issued for example when taking on a new client or providing new services from 27th April 2020.

The update covers:

  • A new separate draft agreement for use by a practitioner acting as a subcontractor to a regulated firm engaged in public practice
  • The cash basis is now referred to in the sole trader/rental income schedule
  • In-year capital gains tax reporting is covered in the personal tax, sole trader/rental income, trusts and estates, partnership and LLP schedules
  • The MTD for Vat schedule is now included in the main guidance
  • VAT Moss paragraphs in all relevant schedules have been amended to remove references to registering “in the UK” as a result of EU withdrawal
  • Off-payroll working changes are reflected (deferred owing to COVID-19)
  • The guidance and the covering letter have been amended in relation to acceptance of the agreement by electronic means or where no reply is received
  • The section of the covering letter relating to agent authorisation has been amended
  • Where fees are to be settled by a tax refund suggested wording has been added to the fees schedule and additional guidance provided.
  • Updated colour-coding of the document which should make the guidance clearer for practitioners to amend.

The letters of engagement, privacy notice, specimen schedules of service, standard terms and conditions of business, letter of disengagement and subcontractor agreement are intended to be adapted and amended by tax practitioners to suit their own practice. Please refer to the important note on the front of each document which states the basis on which they are provided for member use. Please also note that the updated main guidance and the subcontractor schedule have not been subject to review by legal counsel.

** Please note that no changes have been made to reflect government support packages during the current COVID-19 pandemic**

If members have any queries in relation to the letters please email standards [at] tax.org.uk.

Engagement letter Guidance

Subcontractor agreement