Terms of engagement

Standard Terms of Engagement
Compilation and Taxation Engagements
(Version: June 2023)

Following are our standard terms of engagement applicable to financial statement compilation, preparation of income tax returns and activity statements, and the provision of any associated advice. While it is acknowledged that some of these standard terms may not be relevant to your specific engagement, this will not limit the application of the remaining terms to your engagement. By engaging Nexis Accountants and Business Advisors (Nexis), you are bound, as is Nexis, to the terms of the engagement as set out here unless these are expressly altered in writing by both parties.

Parties to engagements:

• Nexis Accountants Pty Limited ACN: 108 623 338, ABN: 33 108 623 338 as nominee for Nexis Accountants partnership.
• You (the client)

1. Full and frank disclosure at the outset and throughout the engagement

You (the client) must provide all information and documents relevant to the proper performance of the work at the outset of the engagement and during the engagement. This includes promptly advising us of anything that occurs subsequently to render information already provided misleading or incomplete, or advising of any change in your circumstances relevant to the work.

Before finalising an engagement, we may see written representations from you in relation to the completeness and accuracy of information that you have provided to us. Professional standards require that we obtain such written representations in certain circumstances, accordingly we request your co-operation in providing us with this information.

All income tax returns are subject to examination by the Australian Taxation Office. In the event of an examination, you may be requested to produce documents, records or other evidence to substantiate items shown on the income tax return.

2. Independence and conflicts of interest

We have procedures in place to periodically assess the independence of our firm and professional staff assigned to your engagement. We will notify you on a timely basis should we become aware of any conflict of interest or independence issues.

If during the engagement you become aware of any conflict of interest or potential conflict of interest or there is a change of circumstances which may result in a conflict, you must advise us.

Events which may give rise to a conflict of interest or potential conflicts during the engagement include events affecting you, such as deaths, matrimonial disputes as well as litigation (threatened or actual).

Or structure of your business or your business relationships, or you are offering an employment opportunity to a current or former director or professional employee of our firm.

3. Compliance with laws

We will act in your best interests but as chartered accountants and registered tax agents we must comply with the generally accepted accounting principles and the tax laws, even where that may be contrary to your wishes.

These include, but are not limited to, interpretation and application of accounting standards and tax laws, compliance with certain statutory notices and requests for production of documents or information.

We will also act in your best interest in terms of educating and/or referring you to a suitably qualified professional to ensure you meet your legal obligations as a taxpayer and/or an employer. We, as chartered accountants and tax agents are not responsible for ensuring our clients compliance with industry awards and/or other Fair Work (www.fairwork.gov.au) requirements. Employers hold that responsibility exclusively and should seek independent advice for clarification.

4. Confidential information

The conduct of this engagement in accordance with the standards and ethical requirements of The Institute of Chartered Accountants in Australian means that information acquired by us in the course of the engagement is subject to strict confidentiality requirements. That information will not be disclosed by us to other parties except as required or allowed for by law or professional standards, or with your express consent.

5. Professional competence

We have internal recruitment, training, supervision and review procedures in place to ensure that we ascertain the facts about your affairs relevant to the work and apply all accounting standards and taxation laws correctly to your circumstances.

You must provide all information and documentation which we will take into account when applying accounting standards and taxation laws.

Any failure by you to provide all such information and documentation, both voluntarily and in answer to your questions, may affect your ability to access the “safe harbour” tax provisions and will be taken into account when assessing our obligations under the tax agent code of conduct.

We will advise you when the scope of our engagement is limited due to your requirements for specific specialities or skills that are not provided by Nexis. Where we have made such a disclosure to you, our obligations under the tax agent services regime are also limited to the extent of any disclosure.

As a member of The Institute of Chartered Accountants in Australia our firm’s system of quality control has been established and is maintained in accordance with the relevant Accounting Professional & Ethical Standard Board (APESB) standard. As a result, our files may be subject to review as part of the quality control review program of the Institute of Chartered Accountants in Australia, which monitors compliance with professional standards by its members. By accepting our engagement terms, you acknowledge that, if requested, our files relating to this engagement will be made available under this program. Should this occur, we will advise you.

6. Safe Harbour from penalties (taxation services only)

A taxpayer who uses a registered tax agent, such as Nexis, will benefit from a safe harbour from certain administrative penalties in certain circumstances. Penalties may no longer apply to the taxpayer where:

• A false or misleading statement is made through a careless act or omission of the tax agent, provided the taxpayer has taken reasonable care to comply with their tax obligations by giving their tax agent the information necessary to make the correct statement; and
• A document (such as return, notice or statement) is not lodged on time by the tax agent or in the approved form due to a careless act or omission of the tax agent, provided the taxpayer gave the agent the necessary information, in sufficient time, to lodge the document on time and in the approved form.

7. Your rights and obligations under the taxation laws (taxation service only)

The taxation laws confer on you certain rights (such as to challenge a decision of, or an assessment issued by, the Australian Taxation Office) but also imposes obligations on you (such as the keeping and retaining of adequate and accurate records and the filing of relevant returns with the Australian Taxation Office within the required time limits). We will keep you informed on specific rights and obligations under the taxation laws that become relevant from time to time during the course of the work we perform for you.

Please note that the onus is on taxpayer’s to self-assess and there are substantial penalties for incorrect returns. Therefore, all tax returns should be reviewed carefully to ensure that items shown are correct and are accurately stated and, if there are any matters in the return that are incorrect, the appropriate adjustments should be made prior to lodgement.

Furthermore, if there is any matter in the return where the tax treatment is unclear, then this matter should be discussed with us to determine the appropriate disclosure so as to minimise exposure to penalties.

8. Notices and assessments

We understand that Nexis is the address for the serving of notices on your behalf. We undertake to check all instalments, assessments and other notices received and advise of any errors contained therein.

9. Trust account

Nexis maintain a trust account for any money received by us during the course of offering professional accounting services, and to which we have no present entitlement.

Where relevant we separately account to you for all money and other property received from you, or for you, other than money received in payment of our fees for services already rendered. This clause is to be read in conjunction with clause 11 “Payment Terms” sub paragraph “Authority to deduct our fees from your refund”.

10. Fees

At Nexis fees are charged using one of four methods:

1. Upfront estimate
2. Fixed cost services
3. Minimum cost services
4. Hourly charge rates

Upfront Estimate

For business’ we generally provide an upfront estimate when we are confident that we have received all the necessary information to complete the financials. The actual fee will depend upon the length and complexity of the work required. However, be assured that if we become aware during the assignment that the fee will materially exceed the estimate, we will contact you to discuss the matter.

Fixed cost services

Some of our services have a fixed cost. This cost covers the average time it takes us to complete this service, and is in line with professional standards. Two examples of this are our annual company secretarial fee (to maintain your company register and lodge standard documents with ASIC), and for the lodgement of Business Activity Statements prepared by yourself and lodged through our systems.

Minimum cost services

Some services are charged using an hourly charge rate, but have a minimum cost regardless of the time spent. These charges are in line with professional standards and have been determined factoring in complexity, risk, quality assurance requirements and systems used. A list of such services is included in Schedule B, attached to these terms and conditions.

Hourly charge rates

Where we do not provide you with an upfront estimate, work will be billed at our standard hourly rates for the employee/s used to perform the work. These rates are listed in Schedule A, attached to these terms and conditions.

It is standard practice within Nexis to invoice non-business individual taxation returns at the completion of the work. Exceptions to this standard practice are when one of the following circumstances arises:

• Where there is a history of late payments;
• When a job is suspended, awaiting information from you, and we feel there has been an unreasonable time lapse, we will forward an invoice for the time already calculated;
• Where you have multiple years of returns, Business Activity Statements (BAS) and accounts outstanding;
• Where you have outstanding tax, Centrelink or child support payments;
• Where we have provided advice (i.e. over the telephone or via direct consultation), and/or performed small jobs (e.g.. provided capital gains tax advice, calculations, salary packaging advice) during the course of a financial year and we feel it is unreasonable to hold this time as unbilled until you next complete a tax return;
• Where you no longer engage us as your tax agents, and you have unbilled time.

For business services clients the following circumstance may also apply in addition to those above:

• Where we are engaged to perform other tasks (e.g. interim financial statements for a bank), it is usual practice to invoice you for this work only upon its completion. However, we do reserve the right to invoice you at other times. Examples of such times may be;
• Upon agreement with you (i.e. our quarterly billing instalments);
• Where we have provided advice (i.e. over the telephone or via a direct consultation) and/or performed small jobs (e.g. completed a work cover declaration, payroll tax declaration, etc) during the course of a financial year and we feel it is unreasonable to hold this time as unbilled until you next complete a tax return or BAS.

11. Ad-hoc Engagements

For the purpose of these Terms of Engagement, Ad-hoc engagements refer to services where an official engagement letter has not been issued. These typically involve requests for services made in person, over the phone or in writing. Where such an engagement takes place, you are automatically bound by these terms at our hourly rates unless advised otherwise.

12. Payment Terms

Please note our payment terms are as follows:

Where you have been provided an up-front fee estimate:

1. The preferred payment method for Nexis is to set up a monthly Direct Debt for the total amount of the fee to be automatically debited from your nominated account as provided in the Direct Debt Request and Authorisation form.
2. Should you choose not to enter into a monthly Direct Debit, 100% upfront payment of the estimated fee is required prior to commencement of work.
3. Where you have not been provided an upfront fee estimate and your work is being billed using our standard hourly rates:
4. Nexis will invoice you at the end of each month for hours charged.

Please note, in the event that you make payment of the engagement without written acceptance of the engagement we take your payment of the engagement letter to be your acknowledgement and acceptance of our engagement terms and conditions.

We reserve the right to apply any funds held in trust to any other outstanding invoices belonging to you or any other associated entities in your group. We also reserve the right to charge interest at the variable rate as published by the Reserve Bank of Australia plus a standard 5% on your overdue account at the time at the time of collection.

If you are having trouble paying your bill, we encourage you to talk to us about this. We are happy to assist with a payment plan or help in any other way we can.

If our invoice is left unpaid for a significant amount of time, and we have had no satisfactory correspondence from you, we will refer your invoice to a debt collection agency and/or solicitor.

We reserve the right to add any, and all, reasonable fees and charges we incur in collecting your outstanding fees.

13. Authority to deduct our fees from your refund

Where you do not pay your Nexis account prior to lodgement of the taxation form or taxation return, as part of the terms of engagement, all tax refunds may be deposited directly into our trust account where we will automatically deduct our fees and forward any remaining balance to your nominated account.

For the convenience of our client, in many instances, we may bill all family members on one invoice or all entities (companies, trusts, etc) on one invoice. This may cause an issue with the Authority to Deduct Fees from refund if the person/ entity getting the bill, is not the person/entity receiving the refund. To accommodate this, part of our Standard Terms of Engagement and the lodgement declaration with the tax return requires your agreement that your refund may be used to pay any outstanding invoices of your spouse, children, parents and any entities that you control (either solely or jointly).

14. Direct Debit Facility

We provide a Direct Debit Request (“DDR”) facility for our clients. This is a service whereby you authorise Nexis to automatically deduct a nominated amount at a nominated interval (e.g. monthly, quarterly).

Specific terms and conditions relating to the DDR, found in the Direct Debit Service Agreement are considered to form part of these Terms of Engagement.

Unless otherwise advised on your engagement letter, when using the DDR service to pay Nexis’ fees, you acknowledge that fees paid during a financial year (July to June) will be offset against our invoice for completing that year’s tax work (i.e. payments from July 2023 to June 2024 will be offset against your 2023 accounting bill). Should you choose to not engage Nexis; or to terminate services during a contract period for completion of a particular year’s accounting work (i.e. 2020 tax return using the above example), you will be liable to pay for any completed services/work that has not yet been paid via direct debit and for any unbilled work in progress. Nexis agrees to refund all monies paid less any outstanding fees and a $50 (plus GST) processing fee.

15. Personal Guarantee for payment of fees

Where we invoice a non-individual client, our Standard Terms of Engagement and the declaration supplied with the tax return, is that the persons in control of the non-individual client give a personal guarantee for the payment of those fees.

Should the persons in control of the non-individual client not pay its fees, we are authorised to seek payment from the persons in control, and if necessary, pursue legal options against those individuals in control.

16. Ability to withhold lodgement until fees are paid

It is not our policy to require payment upfront unless you have agreed to a fixed fee estimate, however if a person or entity has a history of late payments, or we have other reasons to believe we may not be paid for our services, we may, at our discretion, request some/all of our fees to be paid in advance.

Where we believe it is necessary, we will not lodge any tax forms until we are reasonably satisfied that we will be paid in full for our services. Dependent on circumstances we may either take steps to ensure that you have a refund for us to deduct our fees from, or request that our fees are paid in full before lodgement.

17. Payment Options

Payment may be made via Credit Card, Cheque, BPAY, Electronic Funds Transfer (EFT), Direct Debit Authority, or by using our fee funding finance option.

18. Goods and Services Tax

Unless specifically requested and stated, assignments for the following services will not constitute a detailed GST review:

1. Preparation of a Business Activity Statement from your bookkeeping system;
2. Preparation of financial statements and income tax returns;
3. Provision of general advice.
4. Limitation of liability

Any documents, advice or calculations produced as part of our engagement will be compiled exclusively for the benefit of you and your group of entities. We do not accept responsibility, or liability, for loss or damage to any other person or entity other than the client for the contents of any documents, advice or calculations produced by us as part of our engagements.

Our liability is limited by a scheme approved under Professional Standards Legislation. Further information on the
scheme is available from the Professional Standards Councils’ website: www.professionalstandardscouncil.gov.au

20. Involvement of Others

Where, as part of our engagement, the services of an external consultant or expert are required eg. a Bookkeeper, SMSF Auditor, accountant, actuary, lawyer, an estimated cost and timeframe and involvement will be provided to you for your approval.

Nexis engage an outsourcing service provider to assist with data entry and the compilation of our workpapers. Acceptance of our services in conjunction with the engagement document indicates your acceptance of the use of any outsourced services.  Where the outsourced service requires the disclosure of personal information to an overseas recipient a consequence of your consent is that Nexis will be required to take reasonable steps to ensure that the Australian Privacy Principles are complied with by the overseas recipients of the personal information. All work completed by our outsourcing service provider is reviewed by Nexis with all tax returns entered into our software applications.

21. Storage of Personal Information

Nexis uses a number of information technologies in its business.  These technologies include on site computers, servers, on site back up servers and drives, offsite servers and online cloud services.  When engaging our services you acknowledge and agree that your personal information may be stored with third party systems both locally and in data centres overseas.  In selecting these service providers, we have undertaken appropriate due diligence before using their services and products.  Nexis uses several technologies and solutions which are available to the general public and those specific to accounting firms to ensure a high level of protection and security of your information, however we are unable to offer or provide assurance over these technologies and solutions nor their security.

22. Ownership of documents

All original documents obtained from you during our engagement shall remain your property. However, we reserve the right to make copies of the original documents for our records.

Our engagement will result in the production of documents which will be supplied to you, such as income tax returns or financial statements, ownership of these documents will vest in you. All other documents produced by us in respect of this engagement will remain the property of Nexis.

Our engagement will result in the production of documents of the engagement including, if applicable, electronic documents or files, which will be supplied to you, such as income tax returns or financial statements.  Ownership of these documents will vest in you.  All other documents produced by us in respect of this engagement will remain the property of the firm, subject to any statutory obligations.

The firm has a policy of exploring a legal right of lien over any client documents in our possession in the event of a dispute. The firm has also established dispute resolution processes.

23. Privacy

Nexis collects the contact details of our clients in order to provide accounting, taxation and other advisory services to our clients and to communicate new financial sector and firm developments. Nexis maintains a contact database in order to manage our dealings with you (e.g. to contact you for the purposed of providing you with accounting and taxation advice, or to provide you with other information from time to time). Unless you advise otherwise, we will continue to use the contact information we have to provide advice to you. Accuracy of information is important to us and if any details contained within this document are incorrect, please note the changes and send back to us with the signed engagement letter either via Fax: 6253 1052, Email: general@nexis.com.au or PO Box 3333, Braddon, ACT 2612.

If you would like to know more about privacy at Nexis, including your right to seek access to the personal information we hold about you, please do not hesitate to contact us by email at general@nexis.com.au.

24. Audit

Please note that this assignment does not include an audit, a review of internal controls, or a review of your accounting system. Our role will be limited to assistance in the compilation of the financial statements and preparation of the relevant taxation returns based on the information and records provided by you to us.  It may not disclose fraud defalcations or other irregularities that may occur and we advise that our usual compilation report will be attached to the completed documents. However, we will bring to your attention any items noted in the course of our work.

25. Information provided

Please be aware that the completeness and accuracy of the information you provide to us for this assignment remains your responsibility. We will forward our end of year questionnaires to you to assist you in collating the information we will require.

26. Substantiation

Under the self-assessment provisions of the current tax legislation, the onus is on you to have adequate documentation to support your income tax returns and in particular, with respect to the deductions claimed and transactions within your group of entities. Be aware that your accounts and tax returns may be subject to tax audit and that penalties apply for incorrect returns.

27. Your Rights and Responsibilities

We will conduct this engagement in accordance with the Accounting and Professional Ethical Standards Board’s APES 320 — Quality Control for Firms and all other relative standards. This means that the assignment will be carried out in accordance with our Quality Assurance procedures. The information acquired for this assignment is subject to strict confidentiality requirements and will not be disclosed by us to other parties except as required by law or professional standards, unless we have your written consent. Our files may be subject to review as part of the quality control review of our professional body.

The taxation laws confer on you certain rights (such as to challenge a decision of, or an assessment issued by, the ATO) but also certain obligations (such as the keeping and retaining of adequate and accurate records and filing of returns with the ATO). We will endeavour to keep you informed of specific rights and obligations under the taxation laws, primarily via our brochures, newsletters, and our website.

By accepting to complete the services requested, Nexis expects that its clients will:

• Maintain their records appropriately so Nexis can rely on the documentation and information provided to it, and can be provided with documentation upon request;
• Not withhold information relevant to the services being provided (e.g. will not withhold information about a property sale if we are completing a tax return);
• Read all documents, emails, brochures, letters, reports, etc forwarded to them by Nexis;
• Respond to all Nexis requests in a timely manner;
• Raise any issues that may occur with Nexis immediately so that they can be resolved as soon as possible;
• Agree to pay all invoices as they become due, and accept our fees and payment terms;
• Understand that Nexis processes its work on a first-in-first-out basis where possible, and as such a job may not be started for a period of time (potentially 6 weeks or higher depending on the demand for our services at any one time) after receipt of all information by Nexis; and
• Accept that Nexis will not accept responsibility for any penalties and/or interest resulting from the late submission of any form, document, etc where Nexis has acted reasonably when compared to industry standards.

28. Limitation of Liability – Part IVA of ITAA 1936

The ATO is increasing its activity with regard to tax avoidance and the application of Part IVA of the Income Tax Assessment Act 1936.  Part IVA is a general anti-avoidance provision that aims to ensure that schemes that have been entered into or carried out for the sole or dominant purpose of obtaining a tax benefit will fail. Nexis will take into account your individual circumstances and factors regarding the services and advice we provide, however we cannot guarantee that the ATO will not audit, review or challenge your affairs under the general anti-avoidance Part IVA provision. Where you have implemented tax minimisation strategies, you can expect questions and/or review from the ATO.  Should the ATO find that these strategies have gone beyond legal tax minimisation, this may result in tax assessment amendments, interest and penalties. This is an important factor for you to consider when reviewing and discussing advice provided by us.

29. Tax agent services regime

There are provisions in the Taxation Administration Act 1953 (“TAA”) that provide you (as of 1 March 2010) with “safe harbours” from administrative penalties for incorrect or late lodgement of returns if, among other things, you provide Nexis “all relevant taxation information” in a timely manner.

You must provide all information and documents relevant to the proper performance of your work from the start of this engagement, and during the engagement. This includes promptly advising us of anything that occurs subsequently to render any previous information incorrect, misleading, or incomplete.

Any failure by you to provide: all information and documentation, respond to our requests for information, or to advise us of any changes in circumstances may affect your ability to access the safe harbour provisions.

30. Cloud based subscriptions

If you take advantage of the discounts offered for various cloud based services available through Nexis, you will be billed up to 30 June each year 12 months in advance. If you take advantage of the subscription discounts we pass on to files subscribed by Nexis, the following conditions apply:

1. As the subscriber Nexis has the principal login to the data;
2. You own the information once we pass on the subscription to you;
3. If you leave Nexis during the subscription period, Nexis will refund on a pro rata basis the balance of subscriptions paid provided all other invoices for the company or group have been paid in full.
4. Approval

Before we lodge any forms or income tax returns on your behalf, we will forward them to you for approval and signing. We will endeavour to ensure the returns are lodged by the due dates and will have confirmed when documentation should be provided to us. If you are late in providing information, we will do our best to meet the time limits, but we will not be responsible for any penalties you may incur. Depending on the form and the relevant laws, approval may be in the form of:

1. Written signatures;
2. An email stating approval;
3. A facsimile with a written signature; and
4. A digital signature using an approved digital verification process.
5. Right to vary terms and conditions

We reserve the right to change any of the above terms and conditions for the purposes of clarification and changes to technology. These terms and conditions can be varied or amended in writing from time to time without notice. A current copy of these terms and conditions is available from our website at www.nexis.com.au/terms-of-engagement

33. Period of engagement

These terms and conditions will be effective for future years unless we advise you otherwise. Whilst you are a client of Nexis you are bound by these terms and conditions. If you cease to be a client of Nexis, these terms and conditions will still apply to all worked performed and fees charged. These terms (and any amendments) are not required to be sent out each year as they are available from our website at www.nexis.com.au .

Schedule A
Nexis Charge Rate Table

Schedule B
Nexis Business Services