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For tax season

A UK 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 January you will be arguing about in January.

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 4 primary sources.

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Tax preparation engagement letter

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

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Type in your firm, the client, the scope and the fee, and it writes a complete engagement letter for the United Kingdom, 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.

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It also needs to say what happens when the records arrive on 31 January 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 — Self Assessment return, Corporation Tax return, Partnership return — the entity, the jurisdiction and the year. A client with a rental property abroad 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 voucher basis.

  3. 3

    What happens if records are late

    Name a cut-off date after which you cannot guarantee the 31 January deadline, and say what you will do instead: file late with the consequences explained, or not file at all. Self Assessment has no extension to apply for, and clients routinely assume it does.

  4. 4

    Representation is a separate engagement

    If HMRC 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 United Kingdom. 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 [Self Assessment return / Corporation 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 HMRC, and the burden of producing them is yours.

Timing

To file by 31 January we need your complete information by [date]. If it reaches us later, we may not be able to file by the deadline. There is no extension for Self Assessment: a late return incurs a penalty unless there is a reasonable excuse, and interest runs on tax paid late.

What is not included

This engagement does not include bookkeeping or the preparation of year end accounts, VAT filings, payroll filings, tax planning or advisory work, returns for any other entity or individual, or representation in any audit, examination or enquiry by HMRC. 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 pounds sterling, 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 UK GDPR, 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.

UK tax returns under PCRT, and why there is no extension

Members of the AAT, ACCA, ATT, CIOT, ICAEW, ICAS and STEP follow Professional Conduct in Relation to Taxation, current edition effective 1 January 2026. Limits on the service go in writing; work beyond scope needs revised terms and a check on indemnity cover.

Self Assessment has no extension to apply for. Paper returns are due by 31 October, online by 31 January. Registering after 5 October brings a filing date three months from HMRC's notice, but the tax is still due on 31 January. See the Self Assessment engagement letter.

Commission, disclosed

PCRT requires a member to disclose any commission or other advantage received from a third party on the matter, with the amount or its basis. If you refer clients onward, say how that is handled.

Planning within the Standards

PCRT's Standards for Tax Planning bar members from creating, encouraging or promoting arrangements that are contrary to the clear intention of Parliament, or highly artificial or contrived. If the letter covers planning, it can say the work follows them.

Confidentiality as a term

PCRT notes that confidentiality may be an express term of the engagement letter and is otherwise usually implied by the courts. It allows disclosure without consent only under an express legal or professional right or duty. Say so in plain words.

How long clients keep records

An individual filing on time should keep records for at least 22 months after the end of the tax year. The self-employed must keep them for at least five years after the 31 January deadline. Put the right period in the client's responsibilities.

What goes wrong in January

The return nobody mentioned

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

The deadline assumed to be movable

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 file 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 HMRC enquiry 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 Professional Conduct in Relation to Taxation 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. ICAEW PCRT effective 1 January 2026
  2. GOV.UK Self Assessment deadlines
  3. GOV.UK Individuals keep records at least 22 months after end of tax year (on-time returns)
  4. GOV.UK Self-employed keep records at least 5 years after the 31 January submission deadline

What changed

  • Added an editable Word (.docx) copy of the letter beside the PDF.
  • Added the section on what UK 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.