The compliance landscape is constantly changing. Reviewing those changes and understanding how they affect your engagement letters is a huge task. As an OverSuite subscriber, we do that for you formally on a quarterly basis and ad-hoc as changes arise.
What did we review?
This quarter we have reviewed…
- Changes to the professional body regulations to understand their impact on terms and conditions
- The scopes and service schedules to ensure no changes to legislations
- The impact of Brexit on data protection, legislation and VAT, specifically around service schedules.
- Changes & service schedules requested by you
What has changed?
1. CIMA, CIPFA, AAT, IFA, ATT and the CIOT have made changes to the way complaints and alternative dispute resolutions should be communicated to clients. This has been reflected in the Complaints Section of your Terms & Conditions. So now, if you’re a member of any professional body, it will include this statement as best practice…
[I/We] undertake to look into any complaint carefully and promptly and to take all reasonable measures to resolve the position to your satisfaction. If [I/we] do not deal with your complaint to your satisfaction you may take up the matter with [my/our] professional body [pro_body_short_name]. At that point, if appropriate, [I/We] shall also provide you with details of an approved body that you may wish to contact with regard to a possible alternative dispute resolution process.
2. CIMA have made it possible for you to now hold client monies. If you do, then this will have been automatically reflected in your terms and conditions. If you didn’t previously hold client monies, but now you do, please change your answer to that in the wizard.
Post-Brexit Changes – VAT
The review of the scopes and service schedules apply to everybody and resulted in the following changes:
1. Changes to VAT as a result of Brexit have been included in the VAT schedules.
[I/We] will review your VAT returns, and Intrastat returns (which will continue to be required throughout 2021) and your Non-Union VAT MOSS scheme returns MOSS returns as applicable on the basis of the information and explanations supplied by you.
If you provide digital services to consumers in the EU you are responsible for either registering for VAT in that member state or registering for the Non-Union VAT MOSS scheme in an EU member state.
2. A new schedule for VAT Preparation and VAT Review has been included for the CIS Domestic reverse charge scheme setting out the additional information required from clients applying the scheme.
Post-Brexit Changes – Audits
1. All audit related Scopes have been updated to clarify the members/auditors responsibilities in respect of fraud and irregularities, to offer you greater protection.
[I/We] have a professional responsibility to report if the financial statements do not significantly comply with applicable financial reporting standards, unless [I/we] believe there is a good reason for the non-compliance. In deciding whether this is the case, [I/we} consider:
a) whether the non-compliance is necessary for the financial statements to give a true and fair view; and
b) whether the non-compliance has been clearly disclosed.
[I/We] also have a professional responsibility to consider whether other information in documents containing audited financial statements is consistent with those financial statements and [my/our] knowledge acquired during the course of the audit.
The intended users of the report are the members. The report will be addressed to the members.
2. We have made some changes to the extent of the audit within the Annual Accounts (Audit) service schedule, to better reflect recent changes.
In particular, if misstatements in the financial statements that [I/we] bring to your attention are not adjusted, you must state your reasons.
To ensure that there is effective two-way communication between us and to comply with the requirements of International Standards on Auditing (UK), [I/we] will contact you:
- before the audit to discuss any relevant matters, the planned scope and timing of the audit and to agree any required action; and
- after the audit to discuss any matters arising from the audit and to confirm any agreed action.
[I/We] will contact you more frequently and regularly about audit and other matters during the course of the audit where necessary.
You are also responsible for such internal control as you determine is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error
You are responsible for ensuring that the company complies with the laws and regulations that apply to its activities, and for preventing non-compliance and detecting any that occurs.
Individually, directors are required to take all steps that they ought to take as a director to make themselves aware of any relevant audit information and to establish that [I/We] are aware of that information. This is required to be confirmed in the Director’s responsibility statement along with acknowledgment that the financial statements have been prepared on an appropriate accounting basis.
3. No changes were needed to other scopes and service schedules at the moment, however, there will likely be further changes when the 6 month review period post Brexit expires, for example in respect of Data Protection. We will be monitoring this and also carrying out a further detailed review in 3 months.
Changes Requested by You
Here are some other changes we have made after discussions with you:
1. The Individual Tax Return schedule has been updated to incorporate a 30 Day CGT Return.
2. The Terms and Conditions now offer additional clarification as to what will happen if information is provided later than the agreed dates for the work, in that fees may be incurred.
Where information is provided later than agreed in the key dates schedule an additional fee may be charged to ensure that the deadline for completion and submission of the information is met
3. The Software and Subscriptions schedule has been updated to clarify that you are not liable for any issues with third party software.
NEW Service Schedules!
We have also been working hard to create and upload service schedules that have been in high demand. Here’s a summary of our NEW service schedules:
- Annual Accounts (Sole Trader) and Annual Accounts (Partnerships)
- Auto-Enrolment Setup
- Checking and Posting Sales invoices
- CIS Registration
- Cloud Software Initial Setup and Training
- Confirmation Statement (as a standalone service schedule)
- Dormant Company Accounts
- LLP Formation
- Other Company Secretarial Services
- Registration as an Employer (PAYE)
- Self Assessment Registration
- VAT Registration
There are also now two service schedules for VAT Returns and VAT CIS Reverse Charges, one for preparing and one in the case where you would just review.
What do you need to do?
All of the above changes have been automatically updated for you.
The changes to the Terms and Conditions do not require an immediate re-issue of the engagement letter, this should be done at the next proposal date.
However where you have clients that are impacted by the VAT changes a new schedule should be issued.
What if I’ve previously amended the content?
Where you have made direct amendments to any statements that were updated within your VAT Return Service Schedules, Audit related Service Schedules or the Complaints section of your Letter of Engagement, it will be highlighted that there is now an updated statement for you to consider. So you can choose whether you would like to retain what you have in there or revert to our new, updated version.
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