Engagement Letter Template – MTD for ITSA

Making Tax Digital For Income Tax Self-Assessment (MTD for ITSA)

This schedule should be read in conjunction with the engagement letter and our standard terms and conditions.

INTRODUCTION

You have engaged us to support you in meeting your obligations under Making Tax Digital for Income Tax Self-Assessment as required by HMRC. This includes setting up digital processes, maintaining accurate records, and submitting required information in the correct format and within applicable deadlines. We are not responsible for determining your eligibility or requirement to register for MTD; you must ensure that you are correctly registered and notify us of any changes to your income sources or reporting obligations.

YOUR RESPONSIBILITIES

As a sole trader or landlord, you are responsible for the following:

• Provide accurate, complete, and timely information related to your income (e.g. rent, sales etc. and expenses (repairs, utilities, office costs etc). You need to provide the amount, date and category for each transaction.
• Maintain digital records using approved software, where applicable that suit your income types and accounting period (6 April to 5 April or 1 April to 31 March).
• Provide information about shared property income accurately.
• Choose your reporting preference (detailed or simplified) in case of jointly let properties.
• Approve the content of all submissions before they are made to HMRC.
• Inform us of any changes to your business or property circumstances that affect your tax obligations.
• Cooperate with us to ensure submissions are made on time and meeting all HMRC deadlines.
• Settle invoices issued by us for the service as agreed prior to commencement of quarterly submissions.

OUR RESPONSIBILITIES

We will be responsible for the following:

• Assist in setting up and onboarding HMRC-approved software, where applicable.
• Provide clear timelines and guidance for recordkeeping and submissions.
• Prepare and submit quarterly updates for each business income source (self-employment and/or property) via MTD compatible software based on your accounting period (6 April to 5 April or 1 April to 31 March).
• Ensure any errors or omissions in digital records are corrected before or in the next quarterly update.
• Finalise your income tax position by making necessary accounting and tax adjustments (e.g., disallowable expenses, accruals) and claiming eligible reliefs or allowances (e.g., Rent a Room relief, trading allowance).
• Report shared property income accurately based on your share ownership.
• Declare other income sources (e.g., dividends, savings interest) in your final return.
• Submit your final tax return using MTD-compatible software.
• Ensure digital records are accurately linked if using bridging software (e.g., spreadsheets connected to submission tools).
• Maintain secure, compliant records of all digital submissions and related documentation.
• Notify you of any discrepancies or issues in your data that may affect compliance.
• Handle all personal and financial data with strict confidentiality.

AD HOC AND ADVISORY WORK

The scope of our services provided to you will be only as set out above and all other services which we may offer are excluded. If you instruct us to do so, we will provide such other taxation, ad hoc and advisory services as may be agreed between us from time to time. These services will be subject to the terms of this engagement letter and standard terms and conditions of business unless we decide to issue a separate engagement letter. An additional fee may be charged for these services. Examples of such work include:

• advising on the extraction of cash/dividends from your personal service company if you have been treated as a deemed employee under the IR35/off-payroll working rules;
• advising on the in-year Capital Gains Tax (CGT) reporting requirements on disposals of property, and preparing the in-year return and calculating the CGT due where required (note this work will always result in additional fees). We will require you to provide information as early as possible in advance of exchange of contracts in order to provide advice on the tax implications, reporting requirements and to quantify the tax bill;
• advising on ad hoc transactions and queries (including telephone conversations), preparing and submitting information in the relevant format to HMRC and calculating any related tax liabilities;
• advising on double tax relief if appropriate;
• advising on whether trusts – including any non-taxable trusts – should be registered on HMRC’s trust registration service;
• advising on the rules relating to and assisting with registration for VAT or equivalent non-UK taxes;
• advising on tax credits and universal credit; these are, in effect, social security benefits, and your entitlement or otherwise will depend not only on your own circumstances but also on those of your household; we would require all relevant information to advise in this area;
• dealing with any enquiry opened into your tax return or tax affairs by HMRC; and
• preparing any amended returns that may be required and corresponding with HMRC as necessary.

Where specialist advice is required on occasion, we may need to seek this from or refer you to appropriate specialists. We will only do this when instructed by you.

CHANGES IN THE LAW, IN PRACTICE OR IN PUBLIC POLICY

We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law, practice, public policy or in your circumstances. We will accept no liability for losses arising from changes in the law (or the interpretation thereof), practice or public policy that are first published after the date on which the advice is given.

LIMITATION OF LIABILITY

Our services as detailed above are subject to the limitations on our liability set out in the engagement letter and in our standard terms and conditions of business. These are important provisions which you should read and consider carefully. There are no third parties that we have agreed should be entitled to rely on the work done pursuant to this engagement letter. We shall not be liable for any loss or penalty arising from:

• Late or incorrect information provided by you.
• Changes in tax legislation or HMRC guidance after submission.
• Rejection of submissions due to non-compliance on your part or issues within HMRC systems.
• Software malfunctions or delays that are beyond our reasonable control.