Business Clients
Covering letter to the client
(Effective date 1 July 2025)
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Dear Client,
Re: Engagement of our services
Thank you for your instructions to attend to the accounting and tax compliance requirements of your group. This letter sets out our terms of engagement and the scope of the work to be performed by us within that engagement and supersedes any previous engagement letter provided by us.
A list of the individuals and entities on whose behalf our firm will act (the Group) is set out in the accompanying Schedule of Clients and our comments below are directed to all those persons.
The provision of tax agent services is governed by the Tax Agent Services Act 2009 (TASA) and the accompanying regulations. Registered tax practitioners must comply with the requirements of the TASA, which includes a set of ethical and professional standards known as the ‘Code of Professional Conduct’. General information about the obligations and responsibilities of tax practitioners to their clients is set out in the attached document, Rights and Obligations of the Parties under the Taxation Laws.
The Tax Practitioners Board (TPB) is responsible for the registration and regulation of tax practitioners and for ensuring their compliance with the TASA. As part of this role, the TPB maintains a register that enables the public to ensure they are engaging the services of a registered tax practitioner. The register also provides details of suspended and deregistered tax practitioners.
To check the details of the tax practitioner responsible for your tax affairs, search the TPB Register at www.tpb.gov.au/public-register using either of the following details:
- • Practitioner name – Honest & Young Pty Ltd
- • Registration number – 24738624
Taxpayers who engage registered tax agents also have rights and obligations under the taxation laws, including a safe harbour from certain penalties imposed by the Australian Taxation Office (ATO). To qualify for safe harbour protection,
taxpayers must provide their registered tax agent with “all relevant taxation information” to enable accurate statements to be provided to the ATO. This requirement may be important to both parties in identifying and understanding the purpose and scope of the engagement and may also affect other matters
discussed below. You will find a further discussion on the safe harbour protections in the attached document, Rights and Obligations of the Parties under the Taxation Laws.
We recommend that you read this letter carefully and contactour office if you have any queries or wish to discuss it. If the terms of our engagement are acceptable, we ask that all persons sign the enclosed copy of this engagement letter in the places indicated and return it to our office.
Please note that we are unable to perform any work for you until we receive the signed copy.
Purpose and scope of the engagement
Further to our recent discussions, we are pleased to accept the appointment as your accountant/tax agent/ tax adviser and now set out our understanding of the scope and terms of this engagement.
We will be responsible for the following:
1. To assist you in compilation of the Annual Financial Accounts, including the Profit and Loss Statement and the Balance Sheet, commencing with the 2025 financial year.
2. To assist you in compilation and lodgment of annual Income Tax Returns.
3. To assist you in compilation and lodgment of the annual or quarterly BASs, wherever required.
4. To assist you with bookkeeping services based on the information provided by you.
5. Prepare and lodge annual FBT returns, if applicable.
6. Lodge Single Touch Payroll reports,
If we are requested to provide other specific service(s), they will be the subject of a separate engagement letter and thus a separate fee. Any correspondence with ATO, in respect to ATO audit or preparation of objections in response to amended tax assessments or audit, is not included in the above stated responsibilities.
This work will be conducted in accordance with the relevant professional and ethical standards issued by the Accounting Professional & Ethical Standards Board Limited (APESB), including but not limited to, APES 205 Conformity with
Accounting Standards, APES 220 Taxation Services, APES 305 Terms of Engagement (2019), APES 110 Code of Ethics, APES 315 Compilation of Financial Information, APES 320 Quality Management for Firms that provide Non-Assurance Services and Code of Professional Conduct pursuant to Tax Agent Services Act 2009.
We will perform procedures (guided by the APES suite of standards) required that are directly related to the engagement consistent with our Fundamental Principles of integrity, objectivity, professional competence and due care, confidentiality, professional behaviour, and identifying, avoiding and dealing with conflicts of interest.
We understand that an audit of the Financial Accounts is not required, and therefore, we will not be expressing an opinion as to the truth and fairness of those statements. Our procedures use accounting expertise to collect, classify, summarise and compile the financial information which the directors/public officer provided into a financial report. Our procedures do not include verification or validation procedures. We will not perform audit or review and, accordingly, no assurance will be expressed.
To help us to prepare your Financial Accounts and Income Tax Returns and BASs, you will need to provide us with the following in a timely manner as applicable:
1. Any loan documentation.
2. Copy of Bank Statements.
3. Details of new assets purchased (including cars for FBT purposes).
4. Completed FBT Questionnaire, if required.
5. PAYGW summaries.
6. Listing of superannuation payments by the employee.
7. Other items as requested from time to time.
8. Details of all income and expenses.
Note: To complete quarterly BASs on time, please send us all the details and documents within the 15 days after completion of the quarter in the month ending September, December, March and April of respective years. If we receive documents or details as requested after 15 days of the quarter end, we will not be responsible for any delay for lodgments of documents with ATO.
Our Responsibilities
We will be responsible for maintaining and balancing books of accounts on quarterly basis, based on the information provided by you, using bookkeeping software as available in the market or as provided by you and agreed with mutual consent. You also acknowledge that the reliability, accuracy and completeness of the accounting records are your responsibility and that you have disclosed to us all material and relevant information.
Our involvement in this type of engagement will not disclose fraud, defalcations, illegal acts or other irregularities which may occur. However, any matter which comes to our notice will be drawn to your attention.
We are obliged to consider whether our clients create any threats to compliance with our Fundamental Principles and where we cannot reduce the risk to an acceptable level we are obliged to cease the TE under the Code (section 320) to decline or cease client engagement.
We have a duty to act in your best interests, unless this duty is inconsistent with our duty to act in the public interest.
Any information acquired by us in the course of our engagement is subject to strict confidentiality requirements. Information will not be disclosed by us to other parties except as required or allowed for by law or professional standards, or with your express consent. Our files may, however, be subject to review as part of the quality control review program of CPA Australia which monitors compliance with professional standards by its members. We advise you that by signing this letter you acknowledge that, if requested, our files relating to this engagement will be made available under this program. Should this occur, we will advise you. The same strict confidentiality requirements apply under this program as apply to us.
We may collect Personal Information about your representatives, your clients and others when we provide services to you. If we do, you agree to work with us to ensure that we both meet the obligations that we each may have under the Privacy Act 1988 (Cth) (as amended) (Privacy Act).
The obligations may include notifying the relevant person to whom the personal information relates who we are and how we propose to use their personal information. Where you have collected personal information, you confirm that you have collected the personal information in accordance with the Privacy Act, that you are entitled to provide this personal information to us and that we may use and disclose the personal information for the purpose/s we provide our services to you. We will handle personal information in accordance with the Privacy Act.
Disclosure of information to interposed entities:
Acknowledgement of this letter is an explicit consent from you to disclose financial or other information, as required from time to time, to interposed or associate entities.
Please be aware that:
(a) you are responsible for the accuracy and completeness of the particulars and information provided in relation to taxation services and this responsibility rests with you;
(b) any advice given to you is only an opinion based on our knowledge of your particular circumstances; and
(c) a taxpayer has obligations, under self-assessment, to keep full and proper records in order to facilitate the preparation of accurate returns. It is the taxpayer’s responsibility to keep those records for five (5) years.
Non-compliance with Laws and Regulations (NOCLAR)
During the performance of our work under this engagement, we may detect conduct or a transaction that is considered to constitute NOCLAR, which has a material effect on any documents or information that might be required to be provided to a regulatory authority (RA), such as the ATO.
If we detect any NOCLAR, we may have a professional requirement to make a disclosure to a RA. We will follow a formal process which will include advising you of our concerns and, if necessary, seeking legal advice. If we do seek legal advice, we reserve the right to ask you to pay or reimburse us for our reasonable costs.
If we are required to make a disclosure to a RA, you agree to forever release us from any claim for costs or losses you incur in responding to or dealing with anything that arises from our disclosure.
Your Responsibilities
A taxpayer is responsible under self-assessment to keep full and proper records in order to facilitate the preparation of a correct return. Whilst the Commissioner of Taxation will accept claims made by a taxpayer in an income tax return and issue a notice of assessment, usually without adjustment, the return 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 return before it is signed to ensure that the information in the return is accurate.
Where the application of a taxation law to your 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 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 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.>
Penalties under Income Tax Act and ASIC
False or misleading statement penalty – shortfall amount
You’ll be liable for this penalty if you make a false or misleading statement (for example, in a tax return, activity statement or amendment request) that results in you having a shortfall amount. The shortfall amount is the difference between the correct tax liability or credit entitlement, and the liability or entitlement worked out using the information you provided
Failure to lodge on time penalty
Failure to lodge (FTL) on time penalty may be applied if you failed to lodge a return or statement with ATO by due date.
ASIC Penalties for Companies:
Every company has an annual review date and have to pay annual review fee. If you don’t meet the legal time limits that apply to paying your annual review fee and responding to your annual statement you may be charged with penalties.
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.
Use of Electronic Communications
Acknowledgement of this letter is the consent from you to use electronic communication channels like emails, cloud-based technology for transferring of data, third party online software available for electronic signatures and any other mode of electronic communication available in the market in future. By signing this engagement letter, you consented to accept documents for electronic signatures through your designated emails.
Losses from unauthorised cyber-activity
We will take all reasonable precautions to ensure that any electronic data that contains your private information is securely stored and that any email transmissions are protected and are not able to be intercepted by third parties.
However, we cannot be held liable for any loss that you might incur as a consequence of any third-party intervention that accesses, procures or copies any data that contains your private information from any medium or device we use to store or transmit such information.
In the event that, despite our firm having taken reasonable precautions to securely store your private information, you suffer any losses arising from unauthorised cyber-activity, you agree to forever release us from any claim for your losses.
Complaints
If you have a complaint about our services, we ask that you contactour office as soon as possible. We will work with you to help resolve your complaint as quickly as possible.
If we cannot resolve the issue or you are not satisfied with how we have handled your complaint or with the outcome, you may be able to escalate the matter to the TPB. Complaints to the TPB must be made in writing using its online form, which is available at myprofile.tpb.gov.au/complaints/
Note, not all complaints can be acted on by the TPB. For example, if your complaint is about fees, you will be asked to contact Consumer Affairs or the Office of Fair Trading in your State or Territory. However, the TPB may be able to assist if the fee complaint is associated with inappropriate conduct by our firm. Details about making complaints to the TPB are available at www.tpb.gov.au/complaints
Use of third party online or in house Software
Acknowledgement of this letter is consent from you to use online (cloud based) or in-house third-party software available in the market to perform our duties, as defined in this engagement letter in the beginning, to provide you the best professional services.
Storage of Personal Information
Due to increasing use of cloud and modern electronic services, your data may be stored in the cloud and other hosted services including our firms, by engaging with our firm you acknowledge and agree that your personal information may be stored in cloud or overseas.
Outsourced and Offshore Services
Some of Honest & Young functionality and operations, like bookkeeping services, may occur interstate or overseas. Accounting & other professionals from overseas are likely to be in India. Where the outsourced or offshore service requires the disclosure of your personal information, we will take all reasonable steps to ensure that any personal information is secure and is treated in
accordance with the Australian Privacy Principles as set out in our privacy policy which is accessible at:
Acceptance of our services, in conjunction with this engagement document, indicates your acceptance of the use of outsourced and offshore services.
Ownership of Documents
The final Financial Statements, Income Tax Returns and any other documents which we are specifically engaged to prepare, together with any original documents given to us by you, shall be the property of yours. Any other documents, brought into existence by us, including general journals, working papers, the general ledger, draft financial statements and copies of tax returns, will always remain our property.
Lien on Documents
In relation to any subsequent termination of our services, you are advised that we shall be entitled to retain all documents belonging to you and any related parties we act for, until payment is received in full for all outstanding fees.
Fees
Unless otherwise expressly agreed with you in writing, our professional fees for the above listed work will be fixed at (as agreed) per week and may be paid through direct debit facilities, starting immediately after signing this engagement letter, from week to week plus direct out-of-pocket expenses (like the cost of software), if any.
Any additional fee, for an additional service not covered in the scope of this engagement, will be the subject of a separate engagement letter under separate fee arrangements.
It is our requirement that the owners/directors/trustees of the business personally guarantee the payment of all accounts for professional fees, including out-of-pocket expenses rendered by us from time to time.
Refund policy
Honest and Young Pty Ltd is not required to provide a refund of fees if you change your mind about the services, you asked for. You will get full refund of fees if Honest and Young Pty Ltd is not able to provide the services you asked for,
Direct debit
We provide facilities to pay your annual fees through direct debit on weekly, fortnightly or monthly basis. If, for any reason, direct debit fails or stops during the year, you will have to pay the balance amount of the annual fees minus fees already paid through direct debits.
Period of Engagement
This engagement will start on or after 1 July 2025. The first period for which we will be responsible is the financial year ending 30 June 2025. We will not deal with earlier periods unless you specifically ask us to do so, and we agree.
This engagement document will be effective for future years unless we issue an amended one to you.
Agent nomination process – Client-to-agent linking
The ATO requires all taxpayers with an Australian Business Number (excluding sole traders) to undertake certain steps to nominate a registered tax or BAS agent. This process is referred to as Client-to-agent linking (CAL) and, importantly, it must be completed by the taxpayer seeking to nominate an agent. It cannot be done by agents on behalf of their clients.
We have determined that each of the following clients in your Group will need to undertake this process to nominate our firm as their registered tax agent:
Please notify us as soon as the nomination process is completed by each client in your Group. We will then have 28 days to connect to the client on the ATO’s systems. Please note that we cannot perform any work for a client who has not successfully completed the client-to-agent linking nomination process.
You will find further information and details of the steps that each of the above clients will need to take to nominate our firm in the document, Client-to-agent linking proforma, which accompanies this letter.
Other prescribed events and matters to be aware of
We are required to advise if certain prescribed events have occurred within the last five years (but not before 1 July 2022). This will enable each client in the Group to make a fully informed decision on whether to engage or re-engage Honest & Young Pty Ltd to provide tax agent services.
- (a) We advise there are currently no matters that we are required to report to you and the Group.
We are also required to advise whether the tax agent registration of Honest & Young Pty ltd is subject to any conditions.
- (a) There are no conditions attached to our registration.
Professional Indemnity Insurance (PII)
We hold professional indemnity of at least the minimum amount prescribed in the CPA Australia Ltd By-Laws or as required by law. Our PII cover at the time of this TE is: CPA75050PID-25.
Professional Standards Scheme & Limitation of Liability
We participate in the CPA Australia Ltd Professional Standards Scheme, which facilitates the improvement of professional standards to protect consumers. Accordingly, we need to notify you of the following:
“Liability Limited by a scheme approved under Professional Standards Legislation.”
If you want more information on the scheme you can go to:
https://www.cpaaustralia.com.au/about-us/consumer-information or https://www.psc.gov.au/consumer-information
Please sign and return the attached copy of this letter to indicate that it is in accordance with your understanding of the arrangements.
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 us on 03 9943 7220.
Rights and obligations of the parties under the taxation laws
Dear Client,
As a client or prospective client of this practice, we are required to advise you of your rights and obligations under the taxation laws in relation to the tax agent services we provide to you.
It is also important that you understand our obligations as a tax, including to you, under the taxation laws (including the Tax Agent Services Act 2009 and the Code of Professional Conduct contained within that Act) and your obligations to us.
Your rights and obligations under the taxation laws
Set out below is a brief explanation of the main areas of the taxation system you need to understand. If you have any concerns or issues with any of the matters discussed below, please feel free to contact us.
Operation of the self-assessment system
Australia’s tax system operates on a self-assessment basis. This means that when your income tax return, Fringe Benefits Tax (‘FBT’) return or Business Activity Statement (‘BAS’) is lodged, the Australian Taxation Office (‘ATO’) accepts the information provided in the return at face value and issues you with an assessment notice based on that information.
However, this does not mean the assessment is final as the ATO can conduct a review or audit of the information provided in the return at a later time, subject to the time limits discussed below.
Importantly, as a taxpayer, you have an obligation to comply with the taxation laws. If you do not meet your obligations under the taxation laws, the ATO may impose administrative penalties (fines), apply interest charges, seek criminal prosecutions (in some cases) or initiate debt recovery.
Commissioner’s ability to amend an assessment
While the ATO accepts the information lodged in your return at face value, it can amend the assessment if the ATO finds it to be incorrect. The following time limits generally apply for amending an assessment:
Individuals
- For most individuals, the ATO can amend an assessment within two years after the individual receives their notice of assessment. However, if an individual carries on a business and is neither a Small Business Entity (‘SBE’) (broadly, a business with an aggregated turnover of less than $10 million) nor a Medium Business Entity (‘MBE’) (broadly, a business with an aggregated turnover between $10 million and less than $50 million), then that period extends to four years.
- If an individual is a partner in a partnership or a beneficiary of a trust, the amendment period is generally two years. However, if a partnership or trust
- carries on a business and is neither an SBE nor an MBE, then the amendment period extends to four years.
Companies
- The ATO can amend a company assessment within two years after a notice of assessment is deemed to have been made where the company is either an SBE or an MBE.
- If the company is a partner in a partnership or a beneficiary of a trust, the amendment period is two years. However, if the partnership carries on a business and is neitheran SBE nor an MBE, that period extends to four years. If the trust is neitheran SBE nor an MBE, the amendment period also extends to four years.
- In most other cases, the amendment period is four years.
Trustees
- The ATO can amend an assessment within two years after the trustee receives the notice of assessment if the trust iseither an SBE or an MBE.
- If the trustee is a partner in a partnership or a beneficiary of a trust, the amendment period is two years. However, if the partnership carries on a business and is neither an SBE nor an MBE, that period extends to four years. If the trust is neitheran SBE nor an MBE, the amendment period also extends to four years.
- In most other cases, the amendment period is four years.
If the ATO amends an assessment, this will potentially involve increased taxes, penalties and an interest charge. If you discover an error in the information declared in the return, lower penalties generally apply for making a voluntary disclosure.
Note that there are no time limits on the ATO amending an assessment where it believes there has been fraud or evasion.
Obligation to keep records
The tax laws specifically require taxpayers to keep records that properly explain the transactions they have entered into.
Individuals
Individuals claiming deductions for work-related expenses are subject to the substantiation rules in the tax laws. These require taxpayers to keep receipts, invoices etc., of the expenses they incur. Where the expenses relate to a taxpayer travelling interstate or overseas, a travel diary may also need to be kept. Where the expense relates to a motor vehicle, a record of the journeys taken such as a logbook may need to be kept.
A failure to keep the appropriate records can lead to the ATO denying a particular deduction which may involve the imposition of penalties and interest. Substantiation records must be retained for five years.
Businesses
The tax laws specifically require a taxpayer that carries on a business to keep documents that record and explain all the transactions they have entered into. These include all the documents that explain how the income and expenditure of the taxpayer was determined.
Where the tax laws allow or require a taxpayer to make a choice, election, estimate or calculation, documents containing particulars of these matters must be kept.
All these records must be retained for a period of five years. There are penalties for taxpayers who fail to do so.
Obligation to provide complete and accurate records
For our practice to be able to lodge returns on your behalf, it is your responsibility to provide us with truthful, complete and accurate records. Furthermore, in order to lodge your return on time, we will require you to provide us with the relevant information as and when requested.
Where you are unable to provide us with complete and accurate records, we may be unable to prepare and lodge your return. Tax agents are subject to a Code of Professional Conduct contained in the Tax Agent Services Act 2009, which prevents us from acting for a client where insufficient records or information exist that allow us to determine the amount of a client’s income or deductions.
We also reserve the right to question any claims for deductions or credits that in our reasonable judgment might be considered as being excessive, and we may ask for more substantiation or records to prove that such a claim is allowable under the law.
If we believe that a claim is excessive and it cannot be substantiated, we reserve the right not to include such a claim in your income tax returns or BAS, but you will have the right to lodge an objection after receiving your notice of assessment. There may be further costs in doing so, and we will advise you accordingly.
Records for clients operating in the cash economy
Due to the ATO’s on-going concerns with dealings in the cash economy, the ATO has a program of ‘benchmarking’ standardised revenue returns for a wide range of small businesses.
In circumstances where the ATO is dissatisfied with a taxpayer’s records or recording systems, it may assess income tax and/or GST on what it considers to be an appropriate ‘benchmark’ amount (plus penalties and interest). Once this occurs, it is the responsibility of a taxpayer to demonstrate that the assessment is excessive and identify the correct tax position. One of the major problems with this outcome is that the onus of proving that the ATO’s assessment is
excessive (i.e., the taxpayer did not earn that much income) is the responsibility of the taxpayer.
Taxpayers who operate in the cash economy are therefore urged to have a robust and reliable system for recording and reporting all cash transactions and ensuring that the recorded figures are accurate. If you need assistance in setting up or reviewing your recording and reporting systems, we will be happy to do so and will advise you of our rates for doing so on request.
Right to seek a Private Binding Ruling
When preparing your return, we may identify one or more issues that are not clear under the tax laws. Where we have pointed out such issues to you, you have a right to request a Private Binding Ruling from the ATO. The ATO will provide you with a ruling setting out its view on the proper tax treatment of the issue requested in the Private Binding Ruling.
Objecting against an assessment
If the ATO issues you with an assessment that you do not agree with, you have the right to lodge an objection against that assessment. The objection must be lodged with the ATO within either two or four years. The period which applies is determined as discussed above.
Where the ATO issues an amended assessment, the period for objecting is the greater of:
- 60 days from the time the amended assessment is received; or
- two or four years (whichever is applicable) from the time the original assessment was received.
If you remain dissatisfied with the outcome of the objection, you have the right to have the matter reviewed by the Administrative Review Tribunal or appeal the matter to the Federal Court.
Onus of proof falls on the taxpayer
It is important to be aware that in any disputed assessment before the court or the Administrative Review Tribunal (whether initiated by the taxpayer or by the ATO), the onus of proof is placed on the taxpayer. In other words, if the Commissioner asserts that your income should include a certain amount or that a deduction claimed in a return is not allowed, it will be up to you to establish that the Commissioner’s view is incorrect and the correct treatment.
Safe harbour protection
As the client of a registered tax agent, under the taxation laws, you have a statutory ‘safe harbour’ exemption from penalties imposed by the ATO in certain circumstances.
To ensure you are eligible to benefit from the safe harbour, it is a requirement that you provide us with all relevant tax information. This includes any records, or documents we request from you plus any other information relevant to the preparation of your tax return. The information provided must be truthful, complete and accurate.
It is equally important that you provide us with this information by the time it is requested to allow the return to be lodged by its due date. The safe harbour from late lodgment penalties can also apply where a Business Activity Statement, Instalment Activity Statement, or FBT return is lodged late.
A taxpayer who is eligible for the safe harbour protection will not be subject to any penalties for errors identified in their tax return, although the underlying tax and interest charges will still apply.
Your tax practitioner’s obligations
The Tax Agent Services Act 2009 (‘TASA’), including the Code of Professional Conduct contained within the TASA, provide statutory protections for taxpayers who engage registered tax practitioners.
The Code of Professional Conduct is a set of statutory ethical and professional standards that registered tax practitioners must comply with.
The TASA, including the Code of Professional Conduct, and associated regulations and determinations are administered by the Tax Practitioners Board (‘TPB’).
We are required under the Code of Professional Conduct to provide you with general information about the obligations that tax practitioners have to their clients under the taxation laws, including the TASA and the Code of Professional Conduct.
The following information has been adapted from the TPB’s factsheet, Information for Clients for these purposes.
Your tax practitioner’s obligations require them to:
- act lawfully in your best interests and with honesty and integrity in the performance of our duties;
- uphold and promote the ethical standards of the profession;
- manage any conflicts of interest;
- take reasonable care to ascertain your state of affairs and apply tax laws correctly;
- keep your information confidential unless there is a legal duty to disclose;
- provide services competently;
- not knowingly obstruct the administration of the tax laws;
- advise you of your rights and obligations under the taxation laws (refer above);
- account to you for money or other property on trust;
- not make false or misleading statements to the TPB or the ATO, and in some cases, withdraw our engagement with you and notify the TPB or ATO of certain matters;
- address any false or misleading statements we are responsible for;
- engage with clients to address other false or misleading statements, exploring options to correct;
- keep proper records (including records of tax agent services provided);
- keep you informed of certain matters so you can make informed decisions.
If your registered tax practitioner fails to meet their obligations:
- their registration can be suspended or terminated, meaning they cannot practice;
- they could receive a caution or orders from the TPB – for example, undertaking education or working under the supervision of another registered tax practitioner;
- have fines imposed on them by the Federal Court;
- your tax and superannuation matters may not be accurate;
- you may be subject to enquiries or audits;
- any tax shortfalls may attract penalties and interest;
- you may have litigation options to review decisions and recover debts;
- in the case of fraud or criminality, penalties may lead to prosecutions.
Precedent guarantee for fees
[Date]
[Insert name]
[Address line 1]
[Address line 2]
Dear [insert name],
We refer to our engagement letter in relation to the provision of our services to the following entities and individuals (the Group):
- • [list each client in the Group]
As a requirement of our engagement, we require each of the following persons (Guarantors) to guarantee our fees and disbursements payable by the Group:
- • [list each person (not being a client in the Group) who is required to provide a guarantee]
Accordingly, would you please arrange for each Guarantor to sign, date and return a separate copy of the attached Deed of Guarantee.
Yours sincerely,
Deed of Guarantee
| This deed poll is made on ____ / ____ / ______ By |
| [Insert name of Guarantor] |
| of (Guarantor) |
| [Insert address of Guarantor] |
in favour of Honest & Young Pty Ltd(Firm).
Whereas the Firm has been engaged to provide professional services to each person named in the Schedule (each being a Client), the Guarantor hereby covenants and agrees:
1. Guarantee
The Guarantor guarantees to the Firm payment of all fees, charges, disbursements, interest and all other moneys payable to the Firm by each Client from time to time (Guaranteed Obligations).
2. Indemnity
If any of the Guaranteed Obligations are not enforceable against any Client, this deed poll is to be construed as an indemnity and the Guarantor indemnifies the Firm in respect of any failure by that Client to perform any Guaranteed Obligations and hereby agrees that the Guarantor will not be released from their obligations under this deed poll until the Firm has received all moneys which would have been payable had those Guaranteed Obligations been enforceable against that Client.
3. Continuing obligations
This guarantee under this deed poll is a continuing guarantee. The indemnity under this deed poll is a continuing indemnity. This guarantee under this deed poll will not be deemed void or nullified in the event of the death of the Guarantor and will bind its legal personal representatives and assigns, administrators and executors and will endure for the benefit of the Firm and its successors and assigns.
Schedule:
- • [list the full name and address of each client in the Group]
- Executed as a deed poll
Individual guarantor:
Signed and sealed by
Guarantor name