FirmHello
Tour Who it's for Features Security Pricing About
AU AUD

Currency and local tax terms

United States USD Canada CAD United Kingdom GBP Australia AUD
Get started
For tax season

An Australian tax preparation engagement letter for the season ahead

Tax preparation is the engagement with the hardest deadline and the least time to negotiate. Everything you have not written down by October you will be arguing about in October.

The letter has two jobs here. The obvious one is scope: which returns, which entities, which year. The less obvious one is allocating responsibility for the information the return is built on, because you are signing something based on numbers you did not audit.

Last reviewed against 7 primary sources.

Free download

Tax preparation engagement letter

The full letter in Word and PDF, written for Australia, including late-records and representation clauses.

Download the PDF Download for Word

No email required.

Use the free engagement letter generator

Type in your firm, the client, the scope and the fee, and it writes a complete engagement letter for Australia, ready to print or save as a PDF. Nothing you type is stored.

Next step: send it to the client through FirmHello, where it stays on their record beside everything else they send you.

Get started

It also needs to say what happens when the records arrive on 31 October minus three days, which is the single most predictable event in a practice's year.

The clauses tax season depends on

  1. 1

    Exactly which returns, for exactly which year

    "Tax returns" is not a scope. Name each return — individual tax return, company tax return, Partnership return — the entity, the jurisdiction and the year. A client with a rental property overseas will assume it is covered.

  2. 2

    That you rely on what you are given

    You are preparing from the client's information without auditing it. Say it, and say that they are responsible for keeping the records that support every figure — mileage, home office, charitable donations, dividend statement basis.

  3. 3

    What happens if records are late

    Name a cut-off date after which you cannot guarantee the 31 October deadline, and say what you will do instead: ask the ATO for a deferral, or not lodge at all. A deferral is a request decided case by case, not a right, and clients routinely assume otherwise.

  4. 4

    Representation is a separate engagement

    If the ATO examines the return, responding is not included in the preparation fee. Firms that do not say this end up doing it for nothing.

The tax preparation engagement letter

Written for Australia. The downloads are the same text, as a Word document to edit and a PDF to put on your letterhead.

[Firm letterhead]

[Date]

[Client name]
[Client address]

Dear [Client contact],

The engagement

We will prepare the [individual tax return / company tax return] of [Client name] for the year ending [date], and [list any additional returns, jurisdictions or entities]. We will not prepare any other return unless we agree it with you in writing.

What we rely on

We will prepare the return from the information you provide. We will not audit or otherwise verify it, although we may ask you about it where something appears inconsistent or incomplete.

You are responsible for the completeness and accuracy of that information, and for keeping the records and documentation that support every position taken on the return. They may be asked for by the ATO, and the burden of producing them is yours.

Timing

To file by 31 October we need your complete information by [date]. If it reaches us later, we may not be able to lodge by your due date. We can ask the ATO for a deferral, but one is not guaranteed, and a late lodgment can attract a penalty as well as interest on tax paid late.

What is not included

This engagement does not include bookkeeping or the preparation of year end financials, GST filings, payroll filings, tax planning or advisory work, returns for any other entity or individual, or representation in any audit, examination or enquiry by the ATO. Each of those is available as a separate engagement.

Your review before filing

You will review the return before it is filed and tell us about anything that looks wrong. We will file only with your authorisation, and the return remains your responsibility once filed.

Fees

Our fee is [amount] in Australian dollars, invoiced [when] and payable within [number] days. It assumes complete and organised records. Additional work — reconstructing records, amending a filed return, responding to a notice — is charged at [rate] per hour after we have agreed it with you.

Confidentiality and retention

We keep your information confidential except where the law or our professional body requires disclosure, hold it in accordance with the Privacy Act 1988, and retain our files for [number] years.

Agreement

Please sign and return a copy before we begin.

[Name], [Firm name]

Agreed by [Client name]:

Signature ______________________ Date ____________

Before you use this

Supplied as-is, with no guarantee. These templates are general information, not legal advice, and not a substitute for it. Have your own legal adviser review and adapt one to your practice and your jurisdiction before you put it in front of a client. FirmHello accepts no responsibility or liability for any use made of them.

What a return engagement means for an Australian tax agent

Only registered tax agents can charge a fee to prepare and lodge a return. Section 30-10(12) of the Tax Agent Services Act 2009 requires advising clients of their rights and obligations under the tax laws relevant to the service, and section 45 of the 2024 Code Determination requires written client information on engagement.

Section 30 of the Determination requires a record of each service, kept for at least five years, showing its nature, scope and outcome, the information considered, and the advice received from and given to the client. A dated record of what each client sent covers much of it.

Client deadlines carry weight

Under the ATO's safe harbour, a client escapes a late-lodgment penalty only by proving they gave you all relevant information in time, and that includes meeting deadlines you set. Put the cut-off in the letter; the burden of proof sits with the client.

On your list by 31 October

A new client receives your lodgment program due date only if they are on your client list by 31 October. Some must first nominate you through client-to-agent linking, so the letter should ask for that step at the outset.

Wait for "tax ready"

Employers finalise Single Touch Payroll data by 14 July, and an employee's income statement shows as tax ready once they do. Say that you prepare from finalised figures, and what follows if the client insists on lodging earlier.

Amendment windows differ

Individuals generally have two years from their notice of assessment to amend; sole traders have four years for 2024–25 onward. State whether amendments within those windows are covered by your fee.

What goes wrong in October

The return nobody mentioned

A second property, a side business, a trust. Scope by naming returns, not by naming the client.

The deferral assumed to be automatic

Say it in the letter and say it again in the email. It is the single most expensive misunderstanding in tax season.

The notice that arrives in August

Without an exclusion, answering it is assumed to be part of the original fee, five months after that fee was paid.

Other engagement letters

What it is Engagement letters Accounting Accounting Bookkeeping Bookkeeping

Questions about tax engagement letters

Do I need a separate letter for each family member?

For separate returns, yes — each taxpayer is a client. There is no joint return here, so spouses lodge separately; one letter can still cover both if it names each of them and says who may give you instructions.

Should the letter mention audit representation at all?

Yes, to exclude it. Silence is read as inclusion, and an ATO review arrives long after the fee was agreed. Offer it as a separate engagement at a stated rate.

What if the client wants a position I am not comfortable with?

That is a professional standards question rather than a drafting one, and the Tax Agent Services Act Code of Professional Conduct is the place to start. The letter helps by recording that positions are taken on the basis of information the client warrants is complete.

Is an engagement letter needed for a simple return?

The simpler the return, the less time the letter takes to send. The arguments that arise from an undocumented engagement are not proportional to the complexity of the work.

Sources

The primary sources this page is written against, last read against it on . Check them before relying on a detail; rules and thresholds change.

  1. Federal Register of Legislation Tax Agent Services (Code of Professional Conduct) Determination 2024 s45
  2. Federal Register of Legislation Tax Agent Services Act 2009 s30-10
  3. Australian Taxation Office STP finalisation by 14 July
  4. Australian Taxation Office Only registered tax agents can charge a fee
  5. Australian Taxation Office New clients must be added to agent client list by 31 October to get lodgment program due…
  6. Australian Taxation Office Safe harbour
  7. Australian Taxation Office Individuals generally 2 years to amend from day after notice of assessment

What changed

  • Added an editable Word (.docx) copy of the letter beside the PDF.
  • Added the section on what Australian law adds, written from primary sources, and reviewed the shared letter text for wording that only US law supports.

The letter is the easy half

Sending it, getting it back signed, and finding it again in two years is the half that eats the week. That is what the portal is for.

No card and no sales call. If you would rather tell us about your firm first, use the longer form.