A client of mine wants a letter from me stating that he is self employed.
I am happy to provide this, however does any one have a template to use particularly to cover myself in the event that this letter is misused.
Many thanks
Saima Wahid
Replies (9)
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When other authorities
need to know about a clients situation they contact me directly, usually with a form to complete.
Are your clients really self-employed
Saima
The AAT (0845 863 0798) are putting on an afternoon course in Ipswich on 21.10.2008 `Are your clients really self-employed`. presented by Tim Palmer of Francis Clark Tax Consultancy Ltd. The course content includes a review of whether your client is really self-employed and the questions to ask, mutuality of obligations; 30 factors to consider, model contracts etc.
I am sure that if you contact the AAT they would confirm if the course will be available in your area if Ipswich is too much out in the sticks for you.
Use the model recommended by your Institute
Do bear in mind that these kinds of accountants certificates are frequently litigious.
You will only use something that is acceptable to your PI insurer, so you may wish to check with them.
I don't know which Institute you are a member of, but the ICAEW & CIOT both have some aging but standard templates for mortgage references & if you are comfortable you might model your response from one of these.
Self Employment Letter
Hi, I have never had to issue a self employed letter however I do give out letters of engagement which then show you are self employed rather than employed. Hope helps
Factual
In these cases, I never make a comment to the effect that a person is self employed as that places a burden on me that I have considered their employment status.
I would say that I can confirm that the client is registered as a self employed indvidual with HMRC and confirm that s/he submits self assessment tax returns declaring their self employed profits in accordance with the business accounts.
You'll notice the subtle difference. In the second case, I am making no comment as to whether he is self employed or not, just confirming he submits tax returns as a self employed person.
I don't want to get into the argument of employed versus self employed - it would be very easy to make a statement of self employment, only for a status inspector to claim otherwise at a later date.
Self Employment Letter
Please do not consider Saima is being in any way paranoid.
I work as an auditor in local government and during audits I have frequently had to test the self employment status of the self employed applicants for Housing Benefit/Council Tax Benefit. Sums of money granted over a period fo time can be considerable..
I have expected to see, inter alia, the applicant's:
Accounts
Records of NI contributions showing Class 2 and/or Class 4 contributions paid
Tax record showing tax paid under Schedule D or E
HMRC form CWF1
An assurance from the accountant that HMRC IR56 has been applied by the client would greatly assist the applicant and the Housing Benefit/Council tax staff in speedy resolutions of applications.
I suspect that this site has a predominantly practice and industry viewpoint, and can easily overlook the use that Local Government makes of accounts for grants, tenders and Benefits. .
Paranoid?
Saima - are you perhaps being a little paranoid?
Is it really necessary to have a disclaimer for something such as -
''I can confirm we act for xxx and that xxx is a self employed individual''
Do you have a specific concern with this client?
Have you asked what the letter is required for?
no problem - see template below
dear sir or madam,
i am writing to confirm you are officially self-employed. However, we would like to draw to your attention the warning and disclaimer below.
best regards
a n other accountants
warning: this letter should not be misused in any way shape or form.
we have had cases of abuse in the past where clients have run out of toilet paper and used one of our letters in an emergency.
we specifically prohibit this practice.
disclaimer: if despite the warning above, this letter is misused, then we disclaim liability for any issues arising, pour exemple, allergic reactions due to misuse etc.