We do not provide a template or sample letters of engagement as each engagement letter with a client should be tailored to your business and your client’s specific circumstances. However, we have provided some suggestions on what you may want to include in your letter of engagement to help you comply with your obligations under the Code of Professional Conduct (Code) in the following web content and guidance:

• Letters of engagement

• TPB Practice Note TPB(PN) 3/2019 Letters of engagement

No, you cannot use an engagement letter to get a blanket and enduring approval for lodgements of approved forms such as a tax return or activity statement.

The Australian Taxation Office (ATO) requires that each time you lodge an approved form on your client’s behalf, you must obtain a signed declaration from your client that they authorise you to make the lodgement and the information in the form is true and correct.

Yes, we would recommend using engagement letters even for individual clients with simple tax affairs as this will help set out clear expectations of services for both you and your client.

We encourage the use of engagement letters even in situations where you have a well-established relationship with your clients. The aim of an engagement letter is to set clear expectations of terms and scope of services and avoid any misunderstandings, which in turn should help protect your relationship with your clients.

A letter of engagement need not be complex, and when tailored to each client’s circumstances and scope of work to be completed, it will be a helpful reference for both you and your clients.

Under the Code, you must account to your clients for money or other property you hold on trust for them. This involves but is not limited to reconciling the trust records and reporting to clients periodically to ensure they are correct and up-to-date. The Code does not require you to have your trust account audited.

If a client gives money to you for a specific purpose, you must keep this money separate from your own money as you are holding this money on trust for them. You must use this money for the specific purpose as directed by the client and account to them for this money. Refer to our guidance on holding money or other property on trust for further information.

Yes, you are holding this money on trust for your client to be used for a specific purpose as directed by them. Regardless of the number of days you hold on to your client’s money, it should be kept separate from your personal or business account.

We expect tax practitioners to pass on any tax refund monies within 14 days of receipt, unless there are any exceptional circumstances or there is some agreement between the practitioner and their client to the contrary. Failure to pass on tax refunds promptly can be considered a breach of the Code.

For TPB purposes, a trust account may be a separate bank account as long as this account is exclusively used only for handling client monies as instructed by respective clients. However, tax practitioners who are members of relevant professional bodies that have adopted the standards of Accounting Professional and Ethical Standards Board (APESB), should also consider the APESB’s guidance APES 310. 

A ‘lien’ is a legal term used to define the right to hold the property of another as a security for meeting an obligation or paying a debt. There are 2 kinds of liens: particular (or specific) lien and general lien.

Generally registered tax practitioners would deal with a particular (or specific) lien only. This lien is the right to retain a particular piece of property until such time the owner of the property meets the obligation in respect of that property.

Refer to our guidance on claiming a lien over client property for further information.

We would suggest you explore all other possible actions (such as mediation, litigation or initiating debt recovery action) to recover outstanding fees prior to either exercising a lien, or withdrawing or temporarily stopping to provide services. We would also suggest you seek legal advice, so you can properly consider what legal obligations you may have to your clients.

Non-payment of fees or fee disputes are commercial matters between tax practitioners and their clients. The TPB does not have any powers to interfere in fee disputes between tax practitioners and their clients.

You will need to fully inform the client of the arrangements in place, including noting to whom and where the information will be disclosed. You must obtain the client's written permission prior to any disclosure, and this permission may be obtained by way of a signed letter of engagement, signed consent or other communication with the client. 

For further information refer to our practice note on outsourcing and offshoring.

You should provide sufficient information to enable your clients to provide an informed consent. While you may provide a general disclosure to your clients regarding to whom, where and what information of your clients would be sent offshore, providing additional information such as for what purpose the information would be sent may help your clients to make an informed decision.

Yes, you must disclose your external software provider arrangement to your clients and obtain your clients’ written permission. Refer to Example 4 in our guidance on this topic.

Where you are aware (or reasonably ought to be aware), you should also include information about any further outsourcing or offshoring arrangements of the third party you engage, that will have access to the client information. 

You must obtain your client’s prior written consent before discussing their tax affairs with their tax agent.

A tax practitioner transferring client information to a new practitioner must obtain client’s written consent before transferring the clients’ records to the new tax practitioner.

Yes, the client should be made aware of to whom and where their information is being disclosed. You must obtain your client’s written permission prior to sharing their information with your offshore agency and their employees.

This arrangement can be considered a mixture of both outsourcing and offshoring. Regardless of whether this is an outsourcing or offshoring arrangement or both, you must disclose these arrangements to your clients and obtain their explicit permission prior to providing information to the third party. 

We do not provide any templates for these arrangements. You may include these arrangements in your letter of engagement with your clients.

Yes, we would recommend you obtain this request in writing from your client.

You will need to disclose your offshoring arrangements to your clients and obtain their written consent before divulging their information to your offshore provider. You will be breaching your Code obligations otherwise.

You should obtain your client’s instructions about the nature of bank or credit card transactions you can undertake on their behalf. You may have this covered in your engagement letter with your clients.

If both husband and wife are trustees of the trust, you may ask them if they prefer one or both to be authorised contacts. However, you should ensure you manage any conflicts of interest that may arise. If such a situation arises, you should use your professional judgment to determine the most appropriate method to identify and manage the conflict.

We do not provide templates but you may refer to our guidance about making a disclosure and obtaining consent from your clients.