Engagement letter template for an individual tax return

[Firm letterhead]
[Firm name] ABN [ABN]
Registered tax agent number [number]
[Optional: membership of [professional body], shown in line with your body's rules on designations]
[Only if you participate in a scheme: Liability limited by a scheme approved under Professional Standards Legislation.]

[Date]

[Client full name]
[Postal address]

Dear [Client first name],

Our engagement to prepare your income tax return for the year ended 30 June [year] and related services

1. Why we are sending this letter

This letter sets out our understanding of the work you have asked us to do and the terms on which we will do it. Please read it, and the schedules, before you sign. If anything does not match what you expected, tell us before we start.

2. What the work is for

We will prepare your individual income tax return from the information you give us and lodge it with the Australian Taxation Office once you have approved it. Our work is limited to the services listed in Schedule 1. We will not audit or review the information you give us, and we will not express any assurance on it. Unless we agree otherwise in writing, our work cannot be relied on to find fraud, other illegal acts or errors.

3. Scope

This engagement covers the income year ending 30 June [year]. [Optional: It will continue for later income years on the same terms until either of us ends it or we send you new terms.]

We will do the work under the taxation laws, including the Tax Agent Services Act 2009 and the Code of Professional Conduct, and under the professional standards issued by the Accounting Professional & Ethical Standards Board that apply to members of [Professional body: Chartered Accountants Australia and New Zealand / CPA Australia / the Institute of Public Accountants].

Work outside Schedule 1 is not included. Examples are ATO reviews and audits, objections, amending earlier years, and specific advice on major transactions. We are happy to help with these under a separate agreement or a written variation to this letter.

4. What we need from you

You are responsible for the completeness and accuracy of the information you give us, and for keeping the records the tax law requires you to keep. Please give us the information listed in Schedule 1 by [date] so we can lodge on time. Read the return before you approve it and tell us of anything that is wrong or missing. Tell us promptly if your circumstances change in a way that might affect your tax.

If you knowingly give us false information, we may not be able to continue acting for you.

5. What we will do

We will do the work with competence and due care, tell you about matters we become aware of that affect your tax position within the scope of this engagement, and keep you informed about timing. If we need information from you, we will ask in writing and explain why.

6. When you can expect it

We expect to give you your return for approval within [number] business days of receiving everything in Schedule 1. Your lodgement due date is [date or "based on our lodgement program with the ATO"]. If information arrives late, we will tell you how that affects timing.

7. Fees and payment

Our fee for the services in Schedule 1 is set out there. [Fixed fee: The fee is fixed for the services listed.] [Time-based: We charge by the time spent at the rates in Schedule 1.] If you ask for work outside Schedule 1, we will tell you the fee or rate before we start and will not proceed until you agree.

We will invoice you [when the return is ready for approval / on lodgement / monthly]. Payment is due within [number] days of the invoice. You can pay by [methods]. [Optional, only if your firm holds client money under APES 310 Client Monies: With your written authority, your tax refund can be paid into our trust account and our fee deducted from it. We will account to you for the balance.]

[Optional: We [do / do not] receive commissions or referral fees connected with services to you. Where we do, we will tell you the details and ask for your agreement before any arrangement starts.]

8. Other people involved in the work

Schedule 2 lists any outsourced service provider we use for your work, where they do it, and what they do. It also lists the cloud software where your information is stored, where it is hosted, and how it is protected. [Optional: Work by another accountant or specialist on [matter] will be [describe].]

9. Confidentiality

We will keep your information confidential. We will only disclose it with your permission, or where the law or our professional duties require or permit it. As members of [professional body], our files may be selected for review under its quality or practice review program. Reviewers are bound by confidentiality.

If we become aware of actual or suspected non-compliance with laws and regulations during our work, our professional standards may require us to raise it with you, and in some cases to take further steps, which may include withdrawing from the engagement.

10. Documents, records and ownership

Documents you give us remain yours. Working papers and files we create to do the work belong to us. Your return and any advice we give you are yours. We keep records of the tax agent services we provide for at least five years after the service, as the Code of Professional Conduct requires. You can ask us for copies at any time.

[Optional, if your firm has a lien policy: If there is a dispute about unpaid fees, we may hold [describe documents] until it is resolved. We will not hold documents you need to meet a legal obligation. Disputes about this will be handled as follows: [process].]

11. Information the Tax Practitioners Board requires us to give you

• The Tax Practitioners Board keeps a public register of registered tax agents and BAS agents. You can search it at [link to the TPB register] to check our registration.
• If you are unhappy with our service, please contact [name, role, email]. We will respond within [number] business days. You can also complain to the Tax Practitioners Board at [link to the TPB complaints page].
• [Include if you are a member of a professional body:] We are members of [professional body]. If you are not satisfied with how we handle your complaint, you can also complain to [professional body] about our professional conduct at [link to the body's complaints page].
• Our rights, responsibilities and obligations as a registered tax agent, and your obligations to us, are summarised in [attached summary / the Board's factsheet for clients attached / clauses 4 and 5 of this letter and on our website at [link]].
• [State either: "In the last five years none of the events the Board requires us to disclose have occurred, and our registration is not subject to conditions or suspended." or describe each event or current condition that must be disclosed.]

12. Ending this engagement

Either of us can end this engagement at any time by telling the other in writing. You will pay for work done up to that date. We may stop acting if continuing would breach the law or our professional obligations, or if we cannot get the information we need. If you move to another accountant, we will deal with their request for information in line with our professional obligations once you authorise it.

13. Limitation of liability [only if you participate in a scheme]

[Include this clause only if your firm, or the members acting for this client, participate in [your body]'s professional standards scheme in the state or territory concerned. Otherwise delete it. Use the wording exactly.]

Liability limited by a scheme approved under Professional Standards Legislation.

14. Changes to these terms

We will tell you in writing before any change to these terms, the services or the fees. A change applies only once you agree to it.

15. Your acceptance

Please sign below, or accept electronically, to confirm that you have read and understood this letter and the schedules and agree to them. [Optional: If you continue to give us instructions without signing, we will treat that as acceptance, but we prefer your written confirmation.]

Yours sincerely,

[Name]
[Position], [Firm name]

Acceptance

I have read and understood this letter and Schedules 1 and 2, and I agree to them.

Name: [Client full name]
Signature: ______________________
Date: [date]

Schedule 1: Services, information needed and fees

Service	Included	Fee (ex GST)
Preparation and lodgement of individual income tax return for year ended 30 June [year]	[Salary and wages, interest, dividends, private health, standard deductions]	$[amount]
Rental property schedule	[Number] properties	$[amount]
[Optional service, for example tax estimate or PAYG instalment variation]	[Detail]	$[amount]
Work outside this schedule	Agreed in writing before work starts	$[rate] per hour or quoted fee

Information we need: [payment summaries or income statement details, bank interest, dividend statements, managed fund statements, private health insurance statement, receipts for deductions, rental statements and expense records, details of any assets sold, any other income].

Schedule 2: Outsourcing and cloud storage

Provider	What they do	Location	How your information is protected
[Provider name]	[For example: practice management and document storage]	[Country or region of hosting]	[Brief description]
[Outsourced service provider, if any]	[Nature and extent of work]	[Where performed]	[Brief description]