Engagement Letter – Individual Tax Return
Thank you for choosing Ample Finance.
A list of the individuals for whom we are to act (“the Group”) is set out in the Schedule. Each individual in the Group have advised engages Ample Finance Group Pty Ltd T/as Ample Finance (“us”, “we”) on the terms set out in this Engagement Letter (“this Letter”) and is bound by those terms. This Letter sets out our terms of engagement and the scope of the work to be performed by us within that engagement.
Please note that in the foregoing paragraph any reference to “you”, “client” or similar is a reference to those individuals in the Group.
Please contact us immediately if you do not understand, or wish to discuss, any aspect of the terms of this Letter.
If the terms of engagement are acceptable, we ask you to sign this Letter and submit back to us.
Please note that we are unable to perform any work for you until we receive the signed Engagement Letter.
New Tax Agent Regime
With effect from 1 March 2010, a new regime for the regulation of tax agents has taken effect under the Tax Agent Services Act 2009 and accompanying legislation (TASA). The new regime has implications for registered tax agents and also for their clients.
An important feature of TASA is the provision of a “safe harbour” protection from penalties in certain circumstances for taxpayers who engage registered tax agents.
To obtain the benefits of “safe harbour” protection, the legislation requires the taxpayer to provide the registered tax agent with “all relevant taxation information” to enable accurate statements to be provided to the Australian Taxation Office. This requirement may be important to both parties in identifying and understanding the purpose and scope of the engagement as set out below and may also affect other matters discussed below.
Purpose and Scope of Engagement
Our engagement is to attend to the following matter:
- Prepare and lodge the annual Individual Tax Returns for yourself and each individual in the Group.
Unless otherwise agreed, we will prepare the returns on an ongoing basis, in relation to the period following that for which the returns have most recently been finalized, and for each subsequent period.
This Letter relates only to the abovementioned service and details the basis and terms of our engagement. Unless otherwise agreed, our engagement will be limited to the matter described in this Letter. Work that is performed or disbursements that are incurred, which are outside the scope of this Letter, will be the subject of additional charge.
Basic of Engagement
We shall now outline the basis of our engagement. It should be noted at the outset that as a general proposition we rely upon our clients to provide us with accurate and timely information to enable us to properly perform our engagement obligations. Consequently, any rectifying work performed by us on the basis of incorrect or late information will be work which is additional to the scope of our engagement.
Preparation and Lodgment of Individual Tax Returns
In engaging us to provide preparation and lodgment of Individual Tax Returns services, it is important for you to understand that:
- You are responsible for the accuracy and completeness of the particulars and information provided to us by you.
- Any advice we provide is only an opinion based on our knowledge of your particular circumstances.
- You have obligations under the self-assessment regime to keep full and proper records in order to facilitate the preparation of accurate returns.
We will not be responsible for reviewing or verifying any financial records or statements provided to it either via manual cashbooks or prepared on accounting software. Correct coding or classification of accounts is outside the scope of this engagement. If assistance is required in how to correctly code or to review how you currently do so please discuss this with us. This will entail work which is outside the scope of this engagement and will be charged as additional services.
Please ensure that you have all source documentation available to allow us to analyse the income tax implications of any transaction, if we request to see it. Whilst we will not as a matter of course be looking at these documents, the Australian Taxation Office will expect you (and you are required) to have them available before any claim is made in your individual tax returns. We may in some circumstances also request to see source documents if a tax issue is particularly contentious.
It is also expected that, in respect of individual tax returns, each person will have the necessary documents so as to comply with the substantiation provisions of the Income Tax Assessment Act.
We will, where requested, specifically advise as to the requirements of the substantiation provisions relating to your individual tax returns and of the necessity to obtain acceptable receipts as specifically required by the legislation. We will not, however, be checking that the requirements of the substantiation provisions have been satisfied.
This specifically means that we will not be reviewing your log book or any calculations or information you provide us, for example a rental property schedule either prepared by you on spread sheet or by a property manager. If you require assistance in completing a log book or preparing any calculations or you would like us to review such work, please discuss this with us. This will entail work that is outside the scope of this letter and will be charged as additional services.
The fee for this engagement does not cover any inquiries or investigations conducted by the Australian Taxation Office. Substantial penalties may apply for an incorrectly prepared tax returns. If you have any queries in relation to this please contact our office for assistance.
You are required by law to keep full and accurate records relating to your tax affairs. It is your obligation to provide us with all information that you reasonably expect will be necessary to allow us to perform work contemplated under this engagement within a timely manner or as requested. We are entitled to rely on the accuracy of and completeness of the information (written or oral) provided to, or obtained by us, whether the information is provided by, or obtained from, you, your representatives, or your advisers. We will not verify the accuracy or completeness of such information.
You undertake that, if anything occurs after information is provided by you to us, to render such information untrue, unfair or misleading, you will promptly notify us and, if required by us, take all necessary steps to correct any announcement, communication or document issued which contains, refers to or is based upon, such information.
A taxpayer is responsible under self assessment to keep full and proper records in order to facilitate the preparation of a correct returns. Whilst the Commissioner of Taxation will accept claims made by a taxpayer in an income tax returns and issue a notice of assessment, usually without adjustment, the returs may be subject to later review. Under the taxation law such a review may take place within a period of up to four (4) years after tax becomes due and payable under the assessment. Furthermore, where there is fraud or evasion there is no time limit on amending the assessment. Accordingly, you should check the returns before it is signed to ensure that the information in the returns is accurate.
Where the application of a taxation law to your particular circumstances is uncertain you also have the right to request a private ruling which will set out the Commissioner’s opinion about the way a taxation law applies, or would apply, to you in those circumstances. You must provide a description of all of the facts (with supporting documentation) that are relevant to your scheme or circumstances in your private ruling application. If there is any material difference between the facts set out in the ruling and what you actually do the private ruling is ineffective.
If you rely on a private ruling you have received, the Commissioner must administer the law in the way set out in the ruling, unless it is found to be incorrect and applying the law correctly would lead to a better outcome for you. Where you disagree with the decision in the private ruling, or the Commissioner fails to issue such a ruling, you can lodge an objection against the ruling if it relates to income tax, fuel tax credit or fringe benefits tax. Your time limits in lodging an objection will depend on whether you are issued an assessment for the matter (or period) covered by the private ruling.
The scope of our engagement is the preparation and lodgement of the taxation returns detailed above. Any agreed fee applies only to services and advice provided within the scope of this Letter.
However, any additional services or advice that you request are outside the scope of this letter and are not included in this agreed fee. These services will be charged on the basis of the time and degree of skill and acumen required to complete the task undertaken by us, including any direct out-of-pocket expenses. Please note in particular that any correspondence from the Australian Taxation Office that does not relate to initial assessments nor original payment notices will be charged as additional services.
Unless otherwise stated in writing, any estimates which we provide to you of our anticipated fees, disbursements and charges for any work are only indicative of the amounts you can expect to be charged. Estimates are not quotes or caps and are not binding on us.
Where an estimate is given and the scope of the work changes, or if it becomes apparent that the work involves matters which were not taken into account in the estimate, we will endeavour to advise you and provide an amended estimate as amended estimate as soon as it is practicable to do so.
No audits are performed
No audit will be performed and, accordingly, no assurance will be expressed. Our engagement cannot be relied upon to disclose irregularities including fraud, other illegal acts and errors that may exist. However, we will inform you of any such matters that come to our attention.
Before we lodge any returns on your behalf, we will forward the documents to you for approval. The responsibility for reviewing the returns rests with you. You will not be charged to correct errors which are clearly our fault, but revisions performed at your request may require discussion on any time incurred.
We will endeavour to ensure that the returns are lodged by the due dates. All relevant documentation and information required to allow us to prepare and lodge the returns must be received 7 days prior to lodgment due dates. If you are late in providing information, we will do our best to meet the time limits, but we will not be responsible for any late lodgment penalties or interest charges you may incur.
Ownership of Documents
The tax returns that we are specifically engaged to prepare, together with any original documents given to us by you, shall be your property. However, we reserve the right to make a reasonable number of copies of the original documents for our records. Any other documents brought into existence by us, including general working papers, the general ledger and draft documents, will remain our property at all times.
If our services are terminated (by either party), you and each individual in the Group separately agrees that we shall be entitled to retain all documents owned by that individual (including all tax refund cheques of that person which come into our possession) until payment in full of all outstanding fees from you and each individual in the Group on any account. Where copies of any documents released to you are required for our records, you will be charged for the cost of photocopying at our normal rates.
Destruction of Documents and Files
Upon our request either during our engagement or following its termination, you must collect your property without delay which will be released to you once our accounts are paid. Should any of your property remain in our possession following our request to collect it, we will hold the property for three months before destroying it in accordance with the Australian Consumer Law and Fair Trading Act 2012.
We note we are not engaged to review the accuracy of any previous returns lodged by you and therefore disclaim all responsibility.
We will forward any correspondence received from the Australian Taxation Office that relates to overdue and outstanding Income Tax Returns to you. Unless specifically requested by you, if returns remain overdue for a period of two years or more (including the current tax year), then we reserve the right to, without notice, remove the file and any related parties from our tax agent listing.
Professional Fees and Payment
Our services will be provided to you on a fee for service, based on discussion in our correspondence.
You and each individual in the Group is jointly and severally liable to pay our fees in respect of all work performed for all individuals of the Group.
Payment of that invoice is 7 days net unless otherwise agreed upon in writing. We reserve the right to stop work if you fail to make payment when and as it falls due. No tax returns will be lodged until payment is made.
Any accounts unpaid after 30 days will incur an administration fee to recover costs associated with telephone calls and reminders for request of payment. Any accounts unpaid after 60 days may be referred to an independent debt collection service. Any associated collection fees (including gst) charged are to be paid by the Group. It is acknowledged and agreed that in keeping with our normal policy we will list all defaulting accounts (including all directors and other signatories to this agreement) with our credit agency, which could result in this default remaining on your credit file for a period of up to five years if unpaid.
We reserve the right to review fees for services rendered on a regular basis; any change in price will be notified in advance.
We shall discuss with you any intention to change the fee arrangement due to changes in the scope of work.
Involvement of Others
Where, as part of our engagement, the services of an external consultant or expert are required, an estimated cost and timeframe and involvement will be provided to you for your approval.
Information Relating to Your Affairs
We may from time to time use the services of third party contractors to perform some of the services we are engaged to perform for you. Each individual in the Group hereby authorises us to disclose information relating to that individual’s affairs to all such third party contractors as we may choose to engage to perform such work.
Where we use the services of third party contractors, we are nevertheless responsible for the conduct and activities of those contractors and for the delivery of the services we are engaged to perform for you.
From time to time we and our third party contractors may engage external IT service providers (including in relation to ‘cloud computing’ services) in the performance of services under this engagement. Each individual in the Group hereby authorises us and our third party contractors to disclose information relating to those individual’ affairs to all such external IT service providers as we or our third party contractors may choose to engage.
We may also need to disclose information relating to an individual’s affairs to other individuals in the Group to assist in performing our work, or to a professional body of which we are a member in relation to a quality review program undertaken by that body. Each individual in the Group hereby authorises us to do so when we consider it appropriate to further our performance of work for the Group, or when required by that professional body.
You agree to us indemnify us for any loss that may result from third party claims arising from the provisions of our services. If there is a claim against us for loss, the loss will be proportionately reduced by the extent of your contribution to the loss.
Confirmation of Engagement
Obviously, there are many issues to consider in this engagement and we ask that you consider all aspects of this Letter to ensure that you are satisfied with the scope of our engagement.
This engagement will commence at time of signing as dated and will continue until revoked by either party by giving the other party 30 days’ notice in writing.
By signing and submitting this Letter indicate your acknowledgement and acceptance of this engagement. If you would like to discuss any matters in relation to the terms of our engagement or the contents of this Letter, please do not hesitate to contact me on 03 9988 2911 or firstname.lastname@example.org.
We thank you for the opportunity to provide income tax returns preparation and lodgement services to you and each individual in the Group and we look forward to developing a close accounting relationship with you for many years to come.
Business Services Manager
Ample Finance Group Pty Ltd