The importance of a letter of engagement

A member recently contacted the AAT team advising that they had completed work for a relatively new client and the client was disputing their invoice. Worse than that, the client was also making accusations about the member's competence in a particular software product. The member had followed instructions and completed work requested by the client, unfortunately no letter of engagement in place specifying the terms of the working relationship and the service engagement.

Whilst it is not a requirement to hold a letter of engagement under the Tax Agent Services Act (TASA) or the TPB Code of Conduct, AAT strongly encourage members to protect themselves and their clients by having an engagement agreement in place prior to commencing work with a business. This helps providing clarity and avoiding the possibility of miscommunication and misunderstandings.

The TPB recommends that a letter of engagement should cover:
  • The work to be completed
  • Who will complete the work
  • How the work will be completed
  • When it will be done
  • The cost of the services to be provided.

AAT Australia provides a sample letter of engagement in the resources section of the website for members. For more information related to letters of engagement and the TPB’s recommendations you can read more here.