Responsibilities of the Directors
- As directors you are responsible for ensuring that the company maintains proper accounting records and for preparing accounts which give a true and fair view and which have been prepared in accordance with the Companies Act 2006. You are responsible for ensuring that, to the best of your knowledge and belief, financial information, whether used by the company or for the accounts, is reliable.
- You are responsible for ensuring that the activities of the company 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 company complies with 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 have undertaken to make available to us, as and when required, all of the company’s accounting records and related financial information, including minutes of management and shareholders' meetings. You will make full disclosure to us of all relevant information.
Responsibilities of the Accountants
- We shall compile the annual accounts based on the accounting records maintained and the information and explanations given to us by the company and it’s directors. We shall compile draft annual accounts for your approval. We shall plan our work on the basis that no report is required by statute or regulation for the year, unless you inform us in writing to the contrary.
- Our work as the compilers of the annual accounts will not be an audit of the accounts in accordance with Auditing Standards. Consequently our work will not provide any assurance that the accounting records or the accounts are free from material misstatement, whether caused by fraud, other irregularities or error.
- We shall report, with any variations that we consider may be necessary, that in accordance with your instructions, we have compiled the accounts from the accounting records of the business and from the information and explanations supplied to us.
- We have a professional duty to compile accounts that conform to 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, we will report this to you.
- As part of our normal procedures we may request you to provide written confirmation of any information or explanations given to us orally during the course of our work.
- You are responsible for determining whether, in respect of the year, the company meets the conditions for exemption from an audit set out in section 477 of the Act, namely that:
1. it qualifies as a small company in relation to that year for the purposes of section 381;
2. its turnover in that year is not more than £6.5 million; and
3. its balance sheet total for the year is not more than £3.26 million.
- You are responsible for determining whether, in respect of the year, the exemption is not available for any of the reasons set out in section 478 and 479 of the Act; namely that at no time during the year was the company:
1. a public company;
2. a banking or insurance company;
3. an authorised person or an appointed representative under the Financial Services Act 1986/Financial Services & Markets Act 2000;
4. a special register body as defined in section 117(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 or an employers' association as defined in section 122 of that Act;
5. a member of a group that exceeded the group exemption limits; or
6. a member of an ineligible group.
- The exemption is available only if you, as directors, sign a declaration as required by section 475(3) of the Act on the balance sheet to stating that:
1. for the year in question, the company is eligible to take advantage of the audit exemptions;
2. the members have not required the company to obtain an audit of its financial statements for the year in accordance with section 476 of the Companies Act 2006; and
3. you acknowledge your obligations to keep proper accounting records and to prepare financial statements which give a true and fair view of the state of the company's affairs and of its profit or loss for the period.
- If the company is totally exempt from audit, we have no statutory responsibilities to the company at all. Our only responsibilities arise from those specifically agreed upon between us in respect of other professional services.
Provision of Information by the Company for Tax Purposes
- The directors are legally responsible for making a correct return of the company`s annual tax liability and for payment of the tax on time. It is therefore essential that we, as your agent, are supplied with all the relevant information concerning the company`s taxation affairs in good time. You therefore agree to let us have copies of any communications you receive from the H M Revenue & Customs (HMRC). Each director is individually responsible for making a correct return in respect of his or her annual tax liability, and for payment of the tax on time.
- The company is legally responsible for making correct returns by the due date and for payment of tax on time. Failure to meet the deadlines may result in automatic penalties and/or interest.
- To enable us to carry out our work you agree:
1. that all returns are to be made on the basis of full disclosure of all sources of income, charges, allowances and capital transactions;
2. 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 and will not audit the information or those documents;
3. that we can approach such third parties as may be appropriate for information that we consider necessary to deal with the company's affairs;
4. to provide us with information in sufficient time for the company's tax returns to be completed and submitted by the due date;
5. to forward to us on receipt copies of notices of assessment, letters and other communications received from the HMRC to enable us to deal with them as may be necessary within the statutory time limits; and
6. to keep us informed about significant transactions or changes in circumstances.
- We will prepare from the accounts and other information and explanations provided the company's corporation tax return and computations, together with all supporting schedules and, where necessary, amended returns.
- We will send you the tax return and supporting schedules for you to approve and sign. We will then submit it, with the accounts and computations, to the HMRC. You authorise us to file the return electronically.
- We will advise you of the amounts of corporation tax to be paid and the dates by which the company should make the payments. Where appropriate we will initiate repayment claims when tax has been overpaid.
- If you wish, we will advise you whether quarterly corporation tax payments ought to be made, but in order to do this you will need to provide us with appropriate management information.
- We will advise as to possible claims and elections arising from the tax return and from information supplied by you. Where instructed by you, we will make such claims and elections in the form and manner required by the HMRC.
- We will deal with all communications relating to the company's tax return addressed to us by the HMRC or passed to us by the company. If the HMRC choose your return for enquiry this work may need to be the subject of a separate assignment in which case we will seek further instructions from you.
- We will prepare the tax provisions and disclosures to be included in the company's statutory accounts.