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NTAA engagement letter

30th November 0001


The NTAA's precedent client engagement letter has recently been updated and can be accessed by members on the NTAA's website.

The changes made relate to the following:

  • In light of the extension of Single Touch Payroll ('STP') to all employers from 1 July 2019, the letter now includes a standard clause for members that undertake to lodge STP reports on behalf of their clients. 

    Please note that the precedent client engagement letter is not intended to cover those members providing a payroll processing service to their clients. 
  • The ‘Clients rights and obligations under the tax laws’ document (which must be provided to clients together with the engagement letter) has been updated to notify clients of the member’s rights with respect to any claims for tax deductions or credits (e.g., GST input tax credits) that might be considered excessive.

    This change is in response to updated guidance issued by the Tax Practitioners Board ('TPB') for tax agents. 
  • Provision for a release from claims for losses arising from unauthorised cyber activity (e.g., hacking), where the member has taken all reasonable precautions to prevent a client’s private information from being accessed or compromised.

    Registered tax practitioners should adopt reasonable IT security protocols and have PI insurance extensions to cover losses from adverse cyber-activity (refer to the TPB’s website for further details).  

    Practitioners should also insist on a release by clients for losses from adverse cyber activity.
  • Members of the CPA, IPA and CAANZ have an ethical requirement under APES 110 Code of Ethics for Professional Accountants to advise the ATO if there is a material consequence arising from ‘non-compliance with laws and regulations’ (often referred to as ‘NOCLAR’), so the letter has been updated to refer to this requirement.

Editor: Note also that the TPB has recently issued draft guidance regarding client engagement letters, in TPB(PN) D40/2019, which is outlined more fully on page 11 of this edition of Voice.

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