There can be many challenges when accessing tax advice for your clients, such as back-and-forth requests for information, inaccurate quotes, and long delays, to name a few. But at Diagnostax, we’ve built out a process to improve the client experience radically, increasing the probability of clients engaging for tax advice.
The linchpin to the success of this process is an accurate scope of work that meets all the clients' needs and provides clarity over the cost of the work involved. Poor scope of work can be detrimental to your client and your client relationships, so it’s critical to ensure your clients understand exactly what is and why it is so important.
Read on for a detailed description of what is included in a scope of work, why it is essential, and a checklist you can share with your clients.
What is a scope of work?
A scope of work is a detailed account of work an appointed tax adviser delivers as part of a tax advice engagement. It is a comprehensive list of all the tax advisers' responsibilities that will be set out in the tax work proposal.
This could include details of:
Specific tax advice
Tax advice implementation – this can include legal paperwork, submissions to HMRC, submissions to Companies House, etc.
Annual compliance
Enquiries support
Sometimes, the tax adviser may also set out what isn’t included in the engagement. Once the client is happy with the scope of work, they would move on to review and sign the letter of engagement (a contract for the work set out in the scope of work). Both the client and the tax adviser must sign the letter of engagement to confirm they agree to the terms.
Why is a scope of work essential?
The scope of work is more than just a formality in the tax advice process. It’s essential.
A letter of engagement that includes the scope of work is a contractual agreement. It goes without saying, like with every contract you enter into, you need to be clear on what you will get for your money and whether it is what you need.
A scope of work should ensure understanding between you and the tax adviser BEFORE you pay and sign the engagement letter. It is a way of double-checking that the tax adviser understands what you have said/ the information you have provided.
If you agree to a scope of work and the outcome turns out to be what you didn’t expect, i.e., something wasn’t included, or the advice didn’t cover something you wanted it to. You cannot obtain a refund as you signed a contract to say that you wanted the tax adviser to carry out the work. If the scope is unclear or there has been professional negligence etc., there is legal recourse against the tax adviser.
You may incur unexpected costs – more work is needed, which you didn’t expect or know about. Would you have proceeded with the quote if you had known the total cost of the work, not just one part? Is it within your budget? Does the benefit of the advice exceed the price of the advice?
Your scope of work checklist
When reviewing a scope of work, ask yourself the following questions:
Does it cover everything I discussed with the tax adviser? Do they understand what I want? Ask the adviser to explain the scope of work concerning your needs.
Does it set out the work the tax adviser will do? Is anything unclear? If so, ask for clarification before proceeding.
Do I understand what each line of the scope of work means? If no, ask for an explanation. This should have been explained before the letter of engagement was issued.
Are there any exclusions I need to be aware of? If there is, find out the price for this work, as you may be subject to additional costs later.
Is annual compliance needed? Can you (or your accountant) do all of it yourself? If so, you need to find out if the engagement covers this. If not, how much would it cost annually?
Do I need to obtain any separate quotes for extra work? If so, ask for a quote and make sure you are clear about when it could be relevant to you to calculate the total cost.
Will I be supported if HMRC enquires about the transaction I am undertaking? This is not always needed but worth asking. If so, you need to find out how much time this covers, what is included, and whether there will be any additional costs.
Are there any differences in comparison to other quotes? If so, ask why something has been included or not included to ensure you are 100% clear on the scope.
Tips from a Tax Adviser
Here are five tips to ensure you receive an accurate scope of work for your subsequent tax advice enquiry:
Always ask questions if you don’t understand the scope to clarify your understanding – arrange a call or email questions over.
Ask the tax adviser to amend the scope of work to reflect any agreed-upon changes – you need this in writing.
Ask for the additional costs and additional work to be set out in writing for future reference.
Do not proceed if the scope of work isn’t provided or comprehensive until resolved, even if it is an urgent matter, as you may have issues later.
Ask your accountant if you need clarification on anything post speaking to the tax adviser.
Don’t run the risk of an inaccurate scope of work. It can be detrimental to your client and your client’s relationships.
DTX’ers, get in touch if you have a tax advice enquiry you need help with, or log in to complete the Tax Panel enquiry form.
Diagnostax, A-Z Tax Advice & Consultancy function
New to Diagnostax? Our A-Z Tax Advice & Consultancy function will integrate seamlessly with your business. Our services, tools, resources, products, and tax experts cover the A-Z of tax advice and consultancy. Whether you want to engage with clients to start talking about tax, diagnose what tax advice they need, or deliver that advice, we can help.