The Disengagement Process

Introduction

The form in this link needs to be completed by the client, in conjunction with reading the article below, to instigate the formal disengagement process.

The Approach to this and all Articles is consistent with our Standard System and Procedure. 

The engagement process involves agreeing the disengagement process as part of the engagement, at the outset.

The link in our email signatures takes you to the News Flash which identifies the last 5 articles that have been updated. The user can change this selection to more than 5 or all.

Likely reasons for disengagement:

• Deciding to Change Advisors for many reasons.
• Death.
• Retirement.
• On completion of a specific fixed assignment.
• Sale of Business.
• Changes in circumstances.
• Divorce between Partners.
• Company being liquidated or in receivership.
• For many other reasons.

The “disengagement process” is recommended and prescribed by the Institute of Chartered Accountants in England & Wales (ICAEW).

It is good practice and is mandatory in our Terms & Conditions by the Institute of Chartered Accountants in England & Wales,  by our Professional Indemnity Insurers, and by our Tax Investigation Insurers (to whom we have to notify all disengagements) that we bring rapid closure for the best interest of the Client as there are time limits for which action needs to be taken.

For these purposes, the date of the notification to Avar, will act as the effective date of termination of engagement, although time is generally extended by 7 working days to complete all matters. Any engagement after 7 days is subject to a new basis of engagement at our existing standard charge out rate, at that time. At the moment, this stands at £350 per hour for the Avar Team and at £700 per hour for Ash.

This article explains the stages for both Avar, New Agents and Outgoing Clients, as well as the legal, professional requirements and the rationale.

Guidance for New Agents

Unless specifically stated otherwise, to our knowledge, there are no professional reasons why you should not accept the appointment.

It is advised that the Client writes to the new agents with a copy to Avar advising us of their appointment. They must also advise Avar so that they can react within specified time. 

All replies will be made by emails, so Avar needs to be provided full contact details including email address.

Please note that no request for information will ever be provided, directly by Avar to the new Agents for legal, professional reasons and due to the fact, that all information is given to the client contemporaneously by email, or Telegram, or saved in DropBox or by all the aforementioned methods.

So please be advised that you should not request information from Avar as it will be met with a response “As part of the disengagement process, it is agreed that we do not enter into any correspondence with the new agents for requests for information.”

Guidance for Outgoing Clients

If in doubt, please refer to the Avar Team and specific disengagement process will be agreed, which will be recorded in MS Teams or Telephone Recording.  Such recordings will be provided to you for the record.

Individuals, Sole Traders and Partnerships

Avar do not have and have never had access or log in details to client’s personal Gateway account with HM Revenue & Customs.

As an agent, Avar uses only our Agent Gateway for client’s self-assessment matters.

Limited Companies and Organisations – HMRC

Avar will require this form to be completed first.

If Avar have created the client’s Gateway credentials in the capacity as Company Secretary, with Companies House, we will provide by email to the client with the Gateway ID and Password but the above form must be completed by The Client, first.

If the client has created the Gateway credentials, Avar do not and have never had access to these.

As an agent, Avar uses only our Agent Gateway for submission of VAT, PAYE, Corporation Tax returns and accounts.

This is used by Avar for all Clients and will not be given to  any Client.

Limited Companies and Organisations – Companies House

Avar will provide the Companies House authentication code to the client in our capacity as Company Secretary, in line with the above.

Professional Clearance

As part of the disengagement process, your confirmation is required to confirm that all assignments have been completed satisfactorily.

In addition, you must confirm that nothing is outstanding.

Alternatively, advise if any agreed assignments are to be carried out before disengagement process is complete.

You must confirm and agree that all commercial matters have been settled satisfactorily.

We will deal with the following:

For Legal and Professional Clearance (and nothing else)

There will be two types of professional clearance:

No Information Given Directly

For legal, professional and PI Insurance reasons, we will not give any information directly to your new advisors.

This is to ensure that such information provided, does not infer any legal liability on Avar, if relied upon and proves to be incorrect.

This information will be supplied only to you at our current charge out rates, payable in advance or as may be agreed with as part of the “Disengagement Terms”.

The reason for the above charge is that all information agreed in the letter of engagement would have been supplied to you in its entirety, in a contemporaneous manner.

Therefore, you should have access to all the information either in Telegram, Email or Dropbox.

Your Information and Records

All information is handed to you at the time the activity is carried out or is provided by you using Dropbox, Telegram or Email (as above).

Further, all filing at Companies House and HM Revenue & Customs (HMRC) is done with your approval (following the forwarding of all documents to you, beforehand).

As a result, no information will be provided to you or the new advisors again.

This includes information relating to your accounting records, books, accounts, tax and statutory matters.

All documentation required must be requested within seven working days from the date of commencement of disengagement.

Where you require (not your new advisors) the above information once again, we may be able to provide this to you, subject to an additional charge, agreed before the event.

From 1 February 2024, we will create a handover pack for all clients, to include:

• All emails converted to PDF
• Telegram History
• Dropbox Files
• SharePoint Files
• All other files held on our servers and databases.

Avar’s Responsibilities

The following matters will be dealt with by us at no additional cost, relating to companies provided this form is completed with 7 days:

Unless you advise us otherwise, at the point of disengagement, we will use your last known home address as your new address.

We will release your company’s HM Revenue & Customs (HMRC) Gateway credentials if we set it up on your behalf.

Avar do not maintain your personal (SATR) credentials with the HM Revenue & Customs (HMRC) as all affairs are handled via our agent’s Gateway account.

Using our Agent’s gateway, we will remove ourselves from all communication being sent to us by HM Revenue & Customs (HMRC).

As a result, we will not be party to, nor be responsible for any action required to be taken within any time limits.

Further, Avar will not be liable, nor held responsible, for any action undertaken by government bodies, customers, suppliers nor other third parties. This includes any tax investigation or enquiry raised by HM Revenue & Customs for any periods that Avar were acting as agents.

If the company is to be closed, we will commence the striking off application to Companies House.

You will need to settle the company’s PAYE, NIC, VAT and Corporation Tax obligations and settle any other outstanding liabilities.

You will also be responsible for closing down all company bank accounts and credit card accounts.

Finalising Disengagement

A member of the Avar Team will then telephone to bring our engagement to a close and ensure that all your issues are addressed.

The disengagement process will then be complete.

All information is archived to our external servers and will be retained for six years (as required by law).

Thereafter, this data is deleted automatically without further notification.

Retrieval of any information after the disengagement date is subject to additional charges at the standard rates prevailing at the time.

At that point, we will carry out our internal disengagement checklist and clean up our databases, amend our professional indemnity insurance to exclude you and take you off the Tax Investigation Cost Protection Service (TiPS).