Annual Limited Company Accounts

Responsibilities of Directors

As director of the company, under the Companies Acts you are responsible for:

• ensuring that the company maintains proper accounting records and for preparing accounts
• determining whether for any reason the exemption is not available in respect of the period.

You have undertaken to make available to us, as and when required, all the accounting records and related financial information necessary for the compilation of the accounts.  You will make full disclosure to us of all relevant information.  The accounts need to be approved by you before we are able to issue our report.

You are responsible for ensuring that, to the best of your knowledge and belief, financial information, whether used by the business or for the accounts, is reliable.  You are also responsible for ensuring that the activities of the business are conducted honestly and that its assets are safeguarded, and for establishing arrangements designed to deter fraudulent or other dishonest conduct and to detect any that occur.

You are responsible for ensuring that the business complies with the laws and regulations applicable to its activities, and for establishing arrangements designed to prevent any non-compliance with laws and regulations and to detect any that occur.

You will keep records of sales invoices, purchase invoices, receipts and payments, together with any other documents relating to the company’s transactions and activities. It may also be necessary for you to provide a record of stock at the company’s year-end.

A private company is required to file its accounts at Companies House within 9 months of the year end. The company will be liable to a fine if it fails to do so. In order to avoid this, we will produce statutory accounts, suitable for filing, within the required period, provided all your records are complete and presented to us within five months of the year end, and all subsequent queries are promptly and satisfactorily answered.

We have agreed to act as your agent and to:

1. submit the accounts to the Registrar of Companies
2. complete and submit the company’s annual return
3. complete and submit any other forms required by law to be filed at Companies House, provided that you keep us fully informed of any relevant changes or events which are required to be notified to Companies House, within one week of the change or event
4. maintain the statutory books.

Our responsibilities for the preparation of accounts

In relation to the accounts, we will prepare the company’s accounts on the basis of the information that is provided to us. We will also draft the accounts in accordance with the provisions of the Companies Act, and related Accounting Standards for approval by the Board.

Should our work lead us to conclude that the company is not entitled to exemption from an audit of the accounts, or should we be unable to reach a conclusion on this matter, then we will advise you of this.

You have instructed us to prepare your financial statements for the current accounting period and subsequent years. It was agreed that we should carry out the following accounting and other services:

1. write up the accounting records of the company insofar as they are incomplete when presented to us
2. complete the postings to the nominal ledger
3. prepare the accounts for approval by yourselves.

You have agreed that you or your staff will:

1. keep the records of receipts and balances
2. reconcile the balances monthly with the bank statements
3. post and balance the purchase and sales ledgers
4. extract a detailed list of ledger balances
5. prepare details of the annual stocktaking, suitably priced and extended in a form which will enable us to verify the prices    readily by reference to suppliers’ invoices.

Annual sole trader and/or partnership accounts

Your responsibility for the preparation of accounts

1. You have undertaken to make available to us, as and when required, all the accounting records and related financial information necessary for the compilation of the accounts.  You will make full disclosure to us of all relevant information.  The accounts need to be approved by you before we are able to issue our report.
2. You are responsible for ensuring that, to the best of your knowledge and belief, financial information, whether used by the business or for the accounts, is reliable.  You are also responsible for ensuring that the activities of the business are conducted honestly and that its assets are safeguarded, and for establishing arrangements designed to deter fraudulent or other dishonest conduct and to detect any that occur.
3. You are responsible for ensuring that the business complies with the laws and regulations applicable to its activities, and for establishing arrangements designed to prevent any non-compliance with laws and regulations and to detect any that occur.

Our responsibilities for the preparation of accounts

1. We will compile your annual accounts, based on the accounting records (maintained by you) and the information and explanations given to us by you. We shall prepare draft annual accounts for your approval.
2. We will advise you as to the adequacy of your records for preparation of the annual accounts and make recommendations for improvements which we consider necessary. We shall not be responsible if, as a result of you not taking our advice, you incur losses or penalties.
3. We will use reasonable skill and care in the preparation of your accounts but will not be responsible for errors arising from incorrect information supplied by you.
4. We will report, with any variations that we consider may be necessary, that in accordance with your instructions and in order to assist you to fulfil your responsibilities, we have compiled, without carrying out an audit, the accounts from your accounting records and from the information and explanations supplied to us.
5. We have a professional duty to compile accounts which conform with generally accepted accounting principles.  Where we identify that the accounts do not conform to accepted accounting principles, or if the accounting policies adopted are not immediately apparent, this will be made clear in our report, if it is not clear in the accounts.

Corporation tax

We will prepare, in respect of each accounting period of the company, a computation for corporation tax purposes adjusted in accordance with the provisions of the Taxes Acts. We will also prepare the corporation tax return (form CT600) required under the Corporation Tax Self Assessment regulations.  The corporation tax return, together with the supporting corporation tax computations, will be sent to you for approval and signature prior to submission to the Inspector of Taxes.

It should be recognised that in law a taxpayer cannot contract out of his fiscal responsibilities and that computations and return forms are prepared by us as agent for the company. You are legally responsible for making correct returns and for payment of tax on time. If we ask you for information to complete the tax return and it is not provided within the time-scale requested, so that the preparation and submission of the return are delayed, we accept no responsibility for any penalty or interest that may arise.

We will advise you of the corporation tax payments to which the company will be liable, together with the due date of payment. You must inform us immediately if the company pays or receives any interest or makes any other payment, or transfers any asset to any shareholder.

Where necessary we will deal with any queries raised by the Inspector of Taxes and negotiate with the Revenue on any question of taxation interest or penalties which may arise.

To enable us to carry out our work you agree:

1. to make a full disclosure to us of all sources of income, charges, allowances and capital transactions and to provide full      information necessary for dealing with the company’s affairs.  We will rely on the information and documents being true,    correct and complete.
2. to respond quickly and fully to our requests for information and to other communications from us
3. to provide us with information in sufficient time for the company’s self-assessment tax return to be completed and              submitted by the due date.  In order to do this, we need to receive all relevant information
4. to forward to us on receipt copies of all statements of account, letters and other communications received from HM            Revenue & Customs to enable us to deal with them as may be necessary within the statutory time limits.

You agree that we can approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs and undertake to authorise such third parties to communicate directly with us.

Payroll preparation, P.A.Y.E. and N.I.

Payroll and year end returns

In order for us to prepare your payroll and year end returns we will require the following information from you:

1. Personal details of all employees (that is, name, NI number, home address, etc.).
2. All P45s received by you.
3. If any casual labour is taken on, you are required to operate P46 procedures.
4. Completed P46 forms should be passed to us for processing.
5. Notification within two weeks of any employee who is ill for four or more calendar days, including weekends, bank            holidays etc. This will enable us to operate statutory sick pay for you.
6. Notification of any employee who becomes pregnant. This will enable us to operate statutory maternity pay.
7. Details of any money or benefits made available to employees by you or by a third party through you.
8. Hours worked, rates of pay, bonuses etc.
9. Notification of employees engaged by you or leaving your employment.
10. Any notice of coding received by you.

The end of year payroll returns must be received by HM Revenue & Customs by 19th May following the end of the tax year otherwise penalties will be levied. There may also be interest payable if the final tax and National Insurance payment, due by 19th April following the end of the tax year, is late.  We cannot guarantee to have the returns etc. completed in time to meet this deadline unless we have all the relevant information within five working days of the end of the tax year.

We will assist in the preparation and submission of PAYE returns as required by the authorities concerned. However, it should be understood that our appointment as your agent does not absolve the company or its directors from their statutory responsibilities. We would draw your attention to the strict rules and time limits for the submission of such returns and the substantial penalties which may arise if these are not observed.  It is therefore essential that we receive full information from you promptly to enable us to ensure that the returns are made on a timely basis. Completed returns will be sent to you for approval and signature prior to submission on the company’s behalf.

P11D benefits for directors*/officers* and higher paid employees*

You have asked us to prepare forms P11D for your approval. To ensure these forms are correctly prepared we will require details of all benefits, perks or reimbursed expenses received by the directors*/officers*/higher paid employees.*  Note: a higher paid employee is someone who received (at the current level) at least £8,500 pa including the taxable value of benefits, perks and reimbursed expenses.

There are penalties for the late submission of forms P11D. In order to avoid these, you must ensure that we receive complete and accurate details of all benefits and expenses for the tax year (note: not accounts year) within 14 days of the end of the tax year. 

VAT returns

You have asked us to undertake the completion of your VAT returns.  We cannot be held responsible for any penalties or default surcharges arising from the late submission of VAT returns.  However, we will endeavour to meet the relevant deadlines if we receive all the company’s VAT records within 14 days of the end of the VAT return period.  You have undertaken that you/your staff will ensure that:

1. all relevant VAT records are forwarded to us within 14 days of the end of the VAT return period
2. valid VAT invoices are received for all payments where VAT is being reclaimed
3. the VAT rating of supplies is correctly dealt with, i.e. between positive and zero rates and exempt supplies
4. we are notified in writing of any positive-rated own consumption
5. any input VAT on non-business expenditure is clearly marked on supporting invoices
6. we are notified each quarter of any payments to or for the benefit of directors or staff for fuel used for private                  mileage, together with the business mileage for each such person, for each quarter
7. all supplies made by the business are shown in the records made available to us.

Personal tax

Your spouse is legally responsible for their own tax affairs and should be dealt with independently.  However, if both spouses agree, we can disclose to your spouse such details of your financial affairs as are required to consider your combined tax position.

a)   We shall be pleased to continue to act as your personal tax advisers in the UK with effect from 5th April 2023.

b)   We will prepare your personal income tax and capital gains tax return together with all supporting schedules and prepare/check HM Revenue & Customs’ calculation of your self-assessment of tax and Class 4 National Insurance contributions.

c)   We will forward to you your tax return form and supporting schedules for your approval and signature.  Once the return has been approved and signed by you and returned to us, we will submit it to the HM Revenue & Customs.  You authorise us to file the return electronically.

d)   We will advise you as to amounts of tax and National Insurance contributions to be paid and the dates by which you should make the payments, including payments on account and the balancing payment, and if appropriate we will initiate repayment claims when tax and National Insurance contributions appear to have been overpaid.

e)   We will deal with HM Revenue & Customs regarding any amendments required to your return and prepare any amended returns which may be required.

f)    We will advise as to claims and elections arising from the tax return and from information supplied by you and, where instructed by you, we will make such claims and elections in the form and manner required by HM Revenue & Customs.

g)   You have asked us to undertake all correspondence with HM Revenue & Customs on your behalf. To avoid any problems would you please send to us any forms or correspondence received from HM Revenue & Customs as soon as you receive them. In particular would you please ensure that no payments are made to HM Revenue & Customs without our confirmation that the demands are correct.

h)   HM Revenue & Customs has powers to charge both interest and penalties if there is a delay in submitting a tax return. Such charges are automatic if the tax return is submitted after 31 January following the end of the tax year, or if any payments are made after the respective due dates.

i)    It is therefore important that all details required for the preparation of your tax return are forwarded to us as soon as possible after 5 April each year and by 30 June at the latest.  If the information is received after that date, we will not accept responsibility for any penalties or surcharges charged by HM Revenue & Customs.

j)    HM Revenue & Customs audits a number of tax returns each year, many of these audits are the result of a random selection.  Assistance in respect of such an audit beyond the answering of straightforward queries regarding entries on the tax return is additional work and will result in separate charges.  We will keep you fully informed before undertaking any extra work in respect of such an audit.

k)   We will provide our professional services outlined in this letter with reasonable care and skill.  However, we will not be responsible for any losses, penalties, surcharges, interest or additional tax liabilities arising from the supply by you or others of incorrect or incomplete information, or your or others’ failure to supply any appropriate information or your failure to act on our advice or respond promptly to communications from us or the tax authorities.

l)    You agree that we can approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs.