SMITH CRAVEN CHARTERED ACCOUNTANTS – STANDARD TERMS OF BUSINESS
The following terms of business apply to all engagements accepted by Smith Craven Chartered Accountants. All work is carried out under these terms except where changes are expressly agreed in writing.
1 Financial Services Business
If, during the provision of professional services to you, you need advice on investments, we may have to refer you to someone who is authorised by the Financial Conduct Authority, as we are not. However, as we are licensed by the Institute of Chartered Accountants in England and Wales, we may be able to provide certain investment services where these are complimentary to or arise out of the professional services we are providing to you.
2 Applicable Law
Our engagement letter, the schedule of services and our standard terms and conditions of business shall be governed by, and construed in accordance with English law. The Courts of England shall have exclusive jurisdiction in relation to any claim, dispute or difference concerning the engagement letter and any matter arising from it on any basis. 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.
3 Clients Money
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. Clients’ Money will not attract interest payable to the client whilst held by this firm.
We will return monies held on your behalf promptly, as soon as there is no longer any reason to retain those funds. If any funds remain in our client account that are unclaimed, and the client to which they relate has remained untraced for five years, or we as a firm cease to practise, we may pay those monies to a registered charity.
4 Fees and General Limitation of Liability
Our fees are computed on the basis of the time spent on your affairs by the principals and staff and on the levels of skill or responsibility involved. Our fees will be billed, unless otherwise agreed in writing with you, as follows, and will be due within 30 days of presentation:-
(a) on the completion of each separate assignment
(b) at the end of your financial period in respect of work undertaken during
the course of the financial period and
(c) on completion of your financial statements for the work undertaken
preparing and, if applicable, auditing them.
If it is necessary to undertake work outside the responsibilities outlined in this letter, it may involve additional fees.
Should any account rendered for fees remain unpaid for 30 days from the date of account, we reserve the right to charge interest from the date of the account at the rate for the time being applicable under the Late Payment of Commercial Debts (Interest) Act 1998 per calendar month, such interest to be calculated on a simple interest basis, until the account is paid. We reserve the right to cease or suspend work for you where there are any fees unpaid after 30 days.
We reserve the right to require tax repayments to be routed through our client account (which is maintained under the controls established by ICAEW, our regulator), or for payment in advance, in cases where we are unwilling to grant credit facilities.
In the event that fees payable by companies are unpaid, we reserve the right to receive payment personally from the directors, who in signing this letter hereby acknowledge personal liability for payment on behalf of current and future directors.
We reserve the right to terminate our engagement and cease to act if payment of our fees billed is unduly delayed. However, it is not our intention to use this right in a way which is unfair or unreasonable.
You agree to hold harmless and indemnify us to the fullest extent permitted by law, for any loss suffered by you arising from any misrepresentation (intention or unintentional) supplied to us orally or in writing in connection with this agreement.
You agree that you will not bring any claim in respect of or in connection with the Engagement whether on the basis on contract, tort, breach of statutory duty or otherwise against any member or employee of Smith Craven, whether or not that person is described as a “principal”.
Our work is not, unless there is a legal or regulatory requirement, to be made available to third parties without our written permission and we will accept no responsibility to third parties for any aspect of our professional services or work that is made available to them.
In some cases, you may be entitled to assistance with your professional fees, particularly in relation to any investigation into your tax affairs by HMRC. Assistance may be provided through insurance policies you hold or via membership of a professional or trade body. Other than where such insurance was arranged through us, you will need to advise us of any such insurance cover you have. You will remain liable for our fees regardless of whether all or part are liable to be paid by your insurers.
Unless otherwise agreed to the contrary, our fees do not include the costs of any third party, counsel or other professional fees. If these costs are incurred to fulfil our engagement, such necessary additional charges may be payable by you.
If you do not accept that an invoiced fee is fair and reasonable, you must notify us within 21 days of receipt, failing which, you will be deemed to have accepted that payment is due.
5 Registered Office Service
A company is able to nominate Smith Craven’s office as it’s registered office address subject to an annual charge for our administration costs which will be notified to you annually. It is your responsibility to advise to us that you wish to take advantage of this service. When you confirm to us that you require this service, we will update Companies House’s records accordingly. Should you no longer require us to act in this capacity, it is then the company’s responsibility to change its registered office address.
6 Conflicts of Interest and Independence
We will inform you if we become aware of any conflict of interest in our relationship with you or in our relationship with you and another client, unless we are unable to do so because of our confidentiality obligations. We have safeguards that can be implemented to protect the interests of different clients if a conflict arises. If conflicts are identified which cannot be managed in a way that protects your interests, we regret that we will be unable to provide further services.
If there is a conflict of interest that is capable of being addressed successfully by the adoption of suitable safeguards to protect your interests, we will adopt those safeguards. In resolving the conflict, we would be guided by ICAEW’s Code of Ethics, which can be viewed at icaew.com/en/membership/regulations-standards-and-guidance/ethics. During and after our engagement, you agree that we reserve the right to act for other clients whose interests are or may compete with or be adverse to yours, subject, of course, to our obligations of confidentiality and the safeguards set out in the paragraph on confidentiality above.
7 Confidentiality
Unless we are authorised by you to disclose information on your behalf, we confirm that if you give us confidential information we will, at all times during and after this engagement, keep it confidential, except as required by law or as provided for in regulatory, ethical or other professional pronouncements applicable to us or our engagement.
You agree that, if we act for other clients who are or who become your competitors, to comply with our duty of confidentiality it will be sufficient for us to take such steps as we think appropriate to preserve the confidentiality of information given to us by you, both during and after this engagement. These may include taking the same or similar steps as we take in respect of the confidentiality of our own information.
In addition, if we act for other clients whose interests are or may be adverse to yours, we will manage the conflict by implementing additional safeguards to preserve confidentiality. Safeguards may include measures such as separate teams, physical separation of teams, and separate arrangements for storage of, and access to, information.
You agree that the effective implementation of such steps or safeguards as described above will provide adequate measures to avoid any real risk of confidentiality being impaired.
We may, on occasions, subcontract work on your affairs to other tax or accounting professionals. The subcontractors will be bound by our client confidentiality terms.
8 Communicating with You
Post, fax and emails may be used to communicate with you. As with other means of delivery this carries the risk of delayed receipt, inadvertent misdirection, non-delivery or interception by third parties. It is the responsibility of the recipient to carry out a virus check on attachments received by email or fax.
Internet communications are not totally secure and are capable of data corruption, we do not accept any responsibility for changes made to such communications after their despatch or for damage or loss caused by viruses or for communications which are corrupted or altered after despatch. Nor can we accept any liability for problems or accidental errors relating to this means of communication, especially in relation to commercially sensitive material. It may therefore be inappropriate to rely on advice contained in an email without obtaining written confirmation of it. We do not accept responsibilities for errors or problems that may arise through the use of internet communication and all risks connected with sending commercially sensitive information relating to your company and its business are borne by you, in return for greater efficiency and lower costs. If you do not accept this risk you should notify us in writing that email is not an acceptable means of communication, other than when electronic submission is mandatory.
Where you wish to publish or distribute your accounts and auditors report electronically, we reserve the right to withhold consent to the electronic publication of our report. You must advise us of any intended publication. You are responsible for establishing and controlling the process of electronically distributing Annual Reports and other financial information. Controls of this distribution, and the security of your website is beyond the scope of our work. It is your responsibility to ensure that the electronic publication of such documents, properly presents the financial information and any auditors’ report.
9 Retention of Records
You have a legal responsibility to retain documents and records relevant to your financial affairs. During the course of our work we may collect information from you and others relevant to your tax and financial affairs. We will return any original documents to you if requested.
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. You must tell us in writing if you require retention of any document.
10 Data Protection
10.1 In this clause, the following definitions shall apply:
‘client personal data’ means any personal data provided to us by you, or on your behalf, for the purpose of providing our services to you, pursuant to our engagement letter with you;
‘data protection legislation’ means all applicable privacy and data protection legislation and regulations including PECR, the GDPR and any applicable national laws, regulations and secondary legislation in the UK relating to the processing of personal data and the privacy of electronic communications, as amended, replaced or updated from time to time;
‘controller’, ‘data subject’, ‘personal data’, and ‘process’ shall have the meanings given to them in the data protection legislation;
‘GDPR’ means the General Data Protection Regulation ((EU) 2016/679); and
‘PECR’ means the Privacy and Electronic Communications (EC Directive) Regulations 2003 (SI 2426/2003).
10.2 We shall each be considered an independent data controller in relation to the client personal data. Each of us will comply with all requirements and obligations applicable to us under the data protection legislation in respect of the client personal data.
10.3 You shall only disclose client personal data to us where:
(i) you have provided the necessary information to the relevant data subjects regarding its use (and you may use or refer to our privacy notice for this purpose);
(ii) you have a lawful basis upon which to do so, which, in the absence of any other lawful basis, shall be with the relevant data subject’s consent; and
(iii) you have complied with the necessary requirements under the data protection legislation to enable you to do so.
10.4 Should you require any further details regarding our treatment of personal data, please contact our data protection officer Mr K Fitton.
10.5 We shall only process the client personal data:
(i) in order to provide our services to you and perform any other obligations in accordance with our engagement with you;
(ii) in order to comply with our legal or regulatory obligations; and
(iii) where it is necessary for the purposes of our legitimate interests and those interests are not overridden by the data subjects’ own privacy rights. Our privacy notice contains further details as to how we may process client personal data.
10.6 For the purpose of providing our services to you, pursuant to our engagement letter, we may disclose the client personal data to our regulatory bodies or other third parties (for example, our professional advisors or service providers). The third parties to whom we disclose such personal data may be located outside of the European Economic Area (EEA). We will only disclose client personal data to a third party (including a third party outside of the EEA) provided that the transfer is undertaken in compliance with the data protection legislation.
We may disclose the client personal data to other third parties in the context of a possible sale, merger, restructuring or financing of or investment in our business. In this event we will take appropriate measures to ensure that the security of the client personal data continues to be ensured in accordance with data protection legislation. If a change happens to our business, then the new owners may use our client personal data in the same way as set out in these terms.
10.7 We shall maintain commercially reasonable and appropriate security measures, including administrative, physical and technical safeguards, to protect against unauthorised or unlawful processing of the client personal data and against accidental loss or destruction of, or damage to, the client personal data.
10.8 In respect of the client personal data, provided that we are legally permitted to do so, we shall promptly notify you in the event that:
(a) we receive a request, complaint or any adverse correspondence from or on behalf of a relevant data subject, to exercise their data subject rights under the data protection legislation or in respect of our processing of their personal data;
(b) we are served with an information, enforcement or assessment notice (or any similar notices), or receive any other material communication in respect of our processing of the client personal data from a supervisory authority as defined in the data protection legislation (for example in the UK, the Information Commissioner’s Officer); or
(c) we reasonably believe that there has been any incident which resulted in the accidental or unauthorised access to, or destruction, loss, unauthorised disclosure or alteration of, the client personal data.
10.9 Upon the reasonable request of the other, we shall each co-operate with the other and take such reasonable commercial steps or provide such information as is necessary to enable each of us to comply with the data protection legislation in respect of the services provided to you in accordance with our engagement letter with you in relation to those services.
11 Outsourcing
We reserve the right to outsource work we have been instructed upon.
12 Staff
Our staff are assigned to this assignment on the mutual understanding that neither party will offer employment to, nor employ, staff of the other who have been involved during our assignment, or dealing with you, within twelve months unless written consent has been obtained from the other party. If such consent is given either party shall have the right to bill a fee of 50% of the annual salary on appointment plus VAT.
13 Money Laundering Regulations 2017
13.1 In accordance with the Proceeds of Crime Act 2002 and Money Laundering Regulations 2017 you agree to waive your right to confidentiality to the extent of any report made, document provided or information disclosed to the National Crime Agency (NCA).
13.2 You also acknowledge that we are required under s.330 of the Proceeds of Crime Act 2002 to report directly to NCA without prior reference to you or your representatives if during the course of undertaking any assignment the person undertaking the role of Money Laundering Reporting Officer becomes suspicious of money laundering. The offence of money laundering is defined by s.340 (11) of the Proceeds of Crime Act and includes concealing, converting, using or processing 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 or control of such a benefit. The definition is very wide and includes deliberate tax evasion, deliberate failure to inform the tax authorities of known overpayments or excessive repayments, fraudulent claiming of benefits or grants and obtaining a contract through bribery.
13.3 As a specific requirement of the Money Laundering Regulations applicable to all accountancy practices is that we require you to produce evidence of identity of the company and its owners and managers. This will include for the business proof of registration and address and for the individuals proof of identity and address. Copies of such reports will be maintained by us for a period of at least five years after we cease to act for the business.
14 Client Identification
As with other professional services firms, we are required to identify our clients for the purposes of the UK anti-money laundering legislation. We may request from you, and retain, such information and documentation as we require for these purposes and/or make searches of appropriate databases. If we are not able to obtain satisfactory evidence of your identity, we will not be able to proceed with the engagement.
15 Disengagement
If we resign we will normally issue a disengagement letter to ensure that our respective responsibilities are clear.
16 Help us to give you the Best Service
We are committed to providing you with a high quality service that is both efficient and effective. If, at any point you would like to discuss with us how our service to you could be improved, or if you are dissatisfied with the service you are receiving, please let us know by contacting our Practice Manager, Isobel Hossack.
We will consider carefully any complaint you may make about our service as soon as we receive it and do all we can to explain the position to you. We will acknowledge your letter within five business days of its receipt and endeavour to deal with your complaint within eight weeks.
If we do not answer your complaint to your satisfaction, you may, of course, take up the matter with our professional body, ICAEW.
17 Intellectual Property Rights and Use of our Name
We will retain all intellectual property rights in any document prepared by us during the course of carrying out the engagement except where the law specifically states otherwise.
You are not permitted to use our name in any statement or document you may issue unless our prior written consent has been obtained. The only exception to this restriction would be statements or documents that, in accordance with applicable law, are to be made public.
18 Interpretation
If any provision of our engagement letter or terms of business is held to be void, that provision will be deemed not to form part of this contract. In the event of any conflict between these terms of business and the engagement letter or appendices, the relevant provision in the engagement letter or schedules will take precedence.
19 Internal Disputes within a Client
If we become aware of a dispute between the parties who own the business or who are in some way involved in its ownership and management, it should be noted that our client is the business and we would not provide information or services to one party without the express knowledge and permission of all parties. Unless otherwise agreed by all parties, we will continue to supply information to the registered office/normal place of business for the attention of the directors/partners/trustees. If conflicting advice, information or instructions are received from different directors/partners/trustees in the business, we will refer the matter back to the board of directors/the partnership and take no further action until the board/partnership has agreed the action to be taken.
20 Lien
Insofar as we are permitted to so by law or by professional guidelines, we reserve the right to exercise a lien over all funds, documents and records in our possession relating to all engagements for you until all outstanding fees and disbursements are paid in full.
21 Limitation of Third Party Rights
The advice and information we provide to you as part of our service is for your sole use, and not for any third party to whom you may communicate it, unless we have expressly agreed in the engagement letter that a specified third party may rely on our work. We accept no responsibility to third parties, including any group company to whom the engagement letter is not addressed, for any advice, information or material produced as part of our work for you which you make available to them. A party to this agreement is the only person who has the right to enforce any of its terms, and no rights or benefits are conferred on any third party under the Contracts (Rights of Third Parties) Act 1999.
22 Period of Engagement and Termination
Unless otherwise agreed in our engagement letter, our work will begin when we receive implicit or explicit acceptance of that letter. Except as stated in that letter, we will not be responsible for periods before that date.
Each of us may terminate our agreement by giving not less than 21 days’ notice in writing to the other party except if you fail to cooperate with us or we have reason to believe that you have provided us [or HMRC] with misleading information, in which case we may terminate this agreement immediately. Termination will be without prejudice to any rights that may have accrued to either of us before termination.
We reserve the right to terminate the engagement between us with immediate effect in the event of: your insolvency, bankruptcy or other arrangement being reached with creditors; an independence issue or change in the law which means we can no longer act; failure to pay our fees by the due dates; or either party being in breach of their obligations if this is not corrected within 30 days of being asked to do so.
In the event of termination of our contract, we will endeavour to agree with you the arrangements for the completion of work in progress at that time, unless we are required for legal or regulatory reasons to cease work immediately. In that event, we will not be required to carry out further work and shall not be responsible or liable for any consequences arising from termination.
23 Professional Rules and Statutory Obligations
We will observe and act in accordance with the Bye-laws, regulations and Code of Ethics of ICAEW and will accept instructions to act for you on this basis. In particular you give us the authority to correct errors made by HMRC if we become aware of them. We will not be liable for any loss, damage or cost arising from our compliance with statutory or regulatory obligations. You can see copies of these requirements in our offices. The requirements are also available online at icaew.com/en/membership/regulations-standards-and-guidance.
We confirm that we are statutory auditors eligible to conduct audits under the Companies Act 2006. When conducting audit work, we are required to comply with the Ethical and Auditing Standards issued by the FRC, which can be accessed online at www.frc.org.uk/Our-Work/Codes-Standards/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors.aspx. We are also required to comply with the Audit Regulations and Guidance which can be accessed at icaew.com/en/technical/audit-and-assurance/working-in-the-regulated-area-of-audit.
24 Quality Control
As part of our ongoing commitment to provide a quality service, our files are periodically reviewed by an independent regulatory or quality control body. These reviewers are highly experienced professionals and are bound by the same rules of confidentiality as our principals and staff.
When dealing with HMRC on your behalf we are required to be honest and to take reasonable care to ensure that your returns are correct. To enable us to do this, you are required to be honest with us and to provide us with all necessary information in a timely manner. For more information about ‘Your Charter’ for your dealings with HMRC, visit www.gov.uk/government/publications/your-charter. To the best of our abilities, we will ensure that HMRC meet their side of the Charter in their dealings with you.
25 Reliance on Advice
We will endeavour to record all advice on important matters in writing. Advice given orally is not intended to be relied upon unless confirmed in writing. Therefore, if we provide oral advice (for example, during the course of a meeting or a telephone conversation) and you wish to be able to rely on that advice, you must ask for the advice to be confirmed by us in writing.
26 The Provision of Services Regulations 2009
We are registered to carry on audit work in the UK and Ireland by ICAEW. Details of our audit registration can be viewed at www.auditregister.org.uk for the UK and www.cro.ie/auditors for Ireland, under reference number C005306553
Our professional indemnity insurer is Allied World Assurance Company (Europe) Plc, of 3rd Floor, 30 St Mary Axe, London, EC3A 8BF The territorial coverage is worldwide, excluding professional business carried out from an office in the United States of America or Canada, and excludes any action for a claim brought in any court in the United States or Canada.
27 Timing of our Services
If you provide us with all information and explanations on a timely basis in accordance with our requirements, we will plan to undertake the work within a reasonable period of time to meet any regulatory deadlines. However, failure to complete our services before any such regulatory deadline would not, of itself, mean that we are liable for any penalty or additional costs arising.
Smith Craven is a Registered Audit Firm under Registration Number C005306553 on the Register of Statutory Auditors and is regulated by The Institute of Chartered Accountants in England and Wales (ICAEW).
The firms Audit Compliance Principal is Andrew Cribb BFP FCA.
Further details can be found at www.auditregister.org.uk