Anti money laundering legislation

All accountants must comply with onerous duties imposed by the Proceeds of Crime Act 2002, the Terrorism Act 2000 and the Money Laundering Regulations 2003 (the "Anti Money Laundering Legislation"), which are intended to inhibit the activities of terrorists and other criminals by denying them access to technical expertise. If I fail to perform these duties, I risk imprisonment.

Before I accept your instructions, I may need to obtain 'satisfactory evidence' to confirm your identity. In certain circumstances, I may need to obtain evidence confirming the identities of third parties, the source of any funds or other property, the purpose of any instructions or any other matter. I may also need to obtain such evidence after I have begun to act on your instructions.

I assume that my clients are honest and law abiding. However, if at any time, there appear to be grounds to suspect (even if I do not actually suspect) that your instructions relate to 'criminal property', I am obliged to make a report to the National Criminal Intelligence Service ("NCIS"), but I am prohibited from telling you that I have done so.

In such circumstances, I must not act on your instructions without consent from NCIS. If NCIS do not refuse consent within 7 working days I may continue to act. If NCIS issue a refusal within that time, I must not act for a further 31 days from the date of the refusal.

'Criminal property' is property in any legal form, whether money, real property, rights or any benefit derived from criminal activity. It does not matter who carried out the criminal activity or how removed the property is from the original crime. Even if you are honest in your dealings, if your property represents a benefit from someone else's crime, I must still make a report.

Activity is considered 'criminal' if it is a crime under UK law, no matter how trivial, and whether carried out in the UK or abroad. For example, tax evasion is a criminal offence but an honest mistake is not.

Fees

Our fees are as detailed on the separate page, and are agreed with clients on an individual basis, taking into account the services they require. Standard payment terms are 14 days.

Ownership of records

In the event of non-payment of my fees for services rendered, I may exercise a particular right of lien over the books and records in my possession and withhold the documents until such time as payment of my invoice is received in full.

File destruction

Whilst certain documents may legally belong to you, unless you tell me not to, I intend to destroy correspondence and other papers that I store which are more than seven years old, other than documents which I think may be of continuing significance. If you require the retention of any document, you must notify me of that fact in writing.

Customer service

I am committed to providing a high standard of customer service. If you have any ideas as to how my service to you could be improved, or if you are dissatisfied with the service you are receiving, please let me know. In the event that you have a complaint, I will look into this carefully and promptly and do all I can to explain the position to you or address your concerns.

Third parties

All accounts, statements and reports prepared by us are for your exclusive use within your business or to meet specific statutory responsibilities. They should not be shown to any other party without my prior consent.

No third party shall acquire any rights pursuant to my agreement to provide professional services.

Applicable law

This engagement letter is governed by, and construed in accordance with, Scottish law. The Courts of Scotland will have exclusive jurisdiction in relation to any claim, dispute or difference concerning this engagement letter and any matter arising from it. 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.

Disclaimer

I will not be liable for any loss suffered by you or any third party as a result of my compliance with the Anti Money Laundering Legislation or any UK law or at all.

Agreement of terms

Terms will be deemed to be agreed on commencent of engagement. Either party may vary or terminate my authority to act on your behalf at any time without penalty. Notice of termination must be given in writing.

I would emphasise that I cannot undertake to discover any shortcomings in your systems or any irregularities on the part of your employees or others, although I will advise you of any such circumstances that I encounter in preparing your accounts, unless prohibited from doing so by the Anti Money Laundering Legislation.

I will report, with any variations that I consider may be necessary, that in accordance with your instructions and in order to assist you to fulfil your responsibilities, I have compiled, without carrying out an audit, the accounts from your accounting records and from the information and explanations supplied to me.

I have a professional duty to compile accounts which conform with generally accepted accounting principles. Furthermore, the accounts of a limited company are required to comply with the Companies Act 1985 and applicable accounting standards. Where I 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 my report, if it is not clear in the accounts.

C. PERSONAL TAX - INDIVIDUALS AND SOLE TRADERS

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

(a) I shall be pleased to act as your personal tax advisers in the UK.

(b) I will prepare your personal income tax and capital gains tax return together with all supporting schedules and prepare/check the Inland Revenue's calculation of your self-assessment of tax and Class 4 National Insurance contributions.

(c) I will forward to you your tax return form and supporting schedules for your approval and signature. Once the approval signed by you is returned to me, I will submit it with the computations to the Inland Revenue. You authorise me to file the return electronically under the Inland Revenue Electronic Lodgement Service.

(d) I 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 I will initiate repayment claims when tax and national insurance contributions appears to have been overpaid.

(e) I will deal with the Inland Revenue regarding any amendments required to your return and prepare any amended returns which may be required.

(f) I will advise as to claims and elections arising from the tax return and from information supplied by you and, where instructed by you, I will make such claims and elections in the form and manner required by the Inland Revenue.

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

(h) The Inland Revenue 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 31st 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 me as soon as possible after 5th April each year and by 30th September at the latest. If the information is received after that date, I will not accept responsibility for any penalties or surcharges charged by the Inland Revenue.

(j) The Inland Revenue 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. I will keep you fully informed before undertaking any extra work in respect of such an audit.

(k) I will provide my professional services outlined in this letter with reasonable care and skill. However, I 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 me or the tax authorities.

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

(m) I will submit a form 64-8 to the Inland Revenue, which authorises the Inland Revenue to send me copies of formal notices. In practice, the Inland Revenue will treat this as authority to correspond with me, in which case they will not correspond with you except to the extent that they are formally required to do so. However, this authority does not apply to all Inland Revenue correspondence, and even where it does, the Inland Revenue sometimes overlook it. You should therefore always send mr the originals or copies of all communications you receive from the Inland Revenue.

(n) to respond quickly and fully to my requests for information and to other communications from me;

(o) to provide me 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, I need to receive all relevant information by 6 months after the end of the company's accounting year end.

(p) to forward to me on receipt copies of all statements of account, letters and other communications received from the Inland Revenue to enable me to deal with them as may be necessary within the statutory time limits.

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

I will submit a form 64-8 to the Inland Revenue, which authorises the Inland Revenue to send me copies of formal notices. In practice, the Inland Revenue will treat this as authority to correspond with me, in which case they will not correspond with you except to the extent that they are formally required to do so. However, this authority does not apply to all Inland Revenue correspondence, and even where it does, the Inland Revenue sometimes overlook it. You should therefore always send me the originals or copies of all communications you receive from the Inland Revenue.