Letter of engagement template for UK accountants

What an engagement letter is for

A letter of engagement records what you have agreed to do for a client, what the client has agreed to do for you, and the terms that govern both. It protects the practice when a client later assumes a service was included, and it gives the client a clear view of fees and deadlines before any work starts.

Most practices use one core letter with a schedule for each service, so the same template works for a sole trader who only needs self assessment and a limited company with accounts, corporation tax, VAT and payroll.

Engagement letter template: section by section

Use this outline to check your own letter. It is a structure, not wording to copy.

1. Parties and date. The practice, the client (individual, partnership or company and its registered number) and the date the letter takes effect.
2. Scope of services. Each service in its own schedule: annual accounts, corporation tax return, self assessment, VAT returns, payroll, bookkeeping. Say what is included and, just as clearly, what is not.
3. Responsibilities. What the client must provide and by when (records, information, approval of drafts), and what the practice is responsible for. Directors' responsibility for the accounts belongs here for company clients.
4. Fees and billing. Fixed fees or the basis of charging, when invoices are raised, payment terms, and how extra work outside the agreed scope is quoted.
5. Deadlines. Filing dates the practice works to and the date by which the client must supply information for those dates to be met.
6. Limitation of liability. Any cap on liability and to whom the practice owes a duty of care. Check the wording with your professional indemnity insurer.
7. Anti-money laundering. The client due diligence the practice must carry out and the fact that it may need to make reports without telling the client.
8. Data protection. How client data is processed and stored, with a link to your privacy notice.
9. Complaints. Who to contact, and the client's right to refer a complaint to your professional body.
10. Terms of business. Standard terms that apply to every engagement, usually attached as a separate document in the same signing pack.
11. Signature and acceptance. Signature and date fields for the client (each director or partner who needs to agree) and for the practice.

Your professional body publishes model letters and schedules for its members. Start from those and adapt them, rather than from a generic template.

Who needs to sign

For an individual, the client signs. For a partnership, a partner with authority to bind the partnership signs. For a limited company, a director signs on behalf of the company. Where several directors or partners must agree, send the letter to each of them in the same request so nobody signs a different version.

The practice countersigns, usually after the client, so the final copy carries both signatures.

Sending engagement letters for e-signature

In PractiSign an engagement letter is sent as a pack: the letter, the service schedules and your terms of business together, with signature and date fields already placed from a template.

• Save your letter as a template with named roles, such as Client and Practice.
• Choose which documents each recipient can see, and whether they sign, approve or only view.
• Automatic reminders chase unsigned letters and stop as soon as everyone has signed.
• The completed pack includes an evidence record of who signed which version, and when.

See the engagement letters workflow for the full process.