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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
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How to do a compliance check: information powers: rules that apply to all notices: accountants’ working papers: definitions

Working Papers

Working papers are the documents that an accountant draws up in preparing the accounts or completing a person’s return. They are likely to be extensive and you should focus your request for information on the items that will help you understand the accounts or returns to keep the agent’s costs to a minimum.

Auditor’s Papers

Auditor’s papers are papers that are the property of an auditor appointed under a statutory provision (for example, the Companies Act or the Building Societies Act) and which have been prepared by or for him to enable him to carry out his duties as an auditor.

This definition is extended to papers that are the property of an accountant appointed under a contractual obligation to carry out a non-statutory, third party, independent audit. This work must be distinct from that relating to the preparation of accounts and for a Companies Act audit. Examples are an audit under the terms of a partnership deed or the rules of a professional body.

You are not entitled to request audit papers from the auditor who created and who owns them except as explained at CH231400.

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Tax Adviser’s Relevant Communications

A tax adviser is any person appointed either directly by his client or indirectly through another tax adviser, to give advice on the client’s tax/duty affairs.

Relevant communications are the property of the tax adviser concerned. They are communications between a tax adviser and his client (or another tax adviser of the client) made for the purposes of giving or obtaining advice about the client’s tax/duty affairs. It includes such things as letters, emails, internal memoranda, faxes and notes of meetings or telephone conversations. Relevant communications do not include factual information such as the dates on which transactions took place or instructions to undertake transactions. Marketing information is not covered by the restriction as it is not specific to one client and is not therefore advice.

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Link Documents

Link documents are part of the working papers and contain information which provides the link between the person’s books and records and the accounts, return or other information submitted to HMRC. They show what adjustments the accountant made to the figures in the prime records and explain how the figures appearing in the final accounts, return or information came into being.

In many small businesses with incomplete records (perhaps comprising no more than a sheaf of bank statements and a bundle of invoices) the accountant’s linking documents may become documents that the client is legally entitled to retain and thus become, in effect, part of the records of the business.