So I've seen quite a few threads on the correct tax treatment for directors' tax returns charged to the company but no-one seems to be answering this basic question:
If your engagement letter is with the company to prepare the directors' SA (which means your contract is with the company, not them) and the directors subsequently sue you for messing up their personal return, how does this play out liability wise?
On the one hand, your engagement is with the company, so it would have to be the company that sues you. Unless there is a duty of care to the directors (which it seems safe to assume there is), in which case you are completely unprotected by your engagement letter as you don't have one directly with them, just the company.
Really interested in your thoughts on how to manage this?
Could you address the letter to both the company and the directors, or specify that the directors, in relation to their personal tax are party to the engagement letter.
I know the gold standard method is to have an engagement letter directly with directors personally, although then it would be more difficult to bill the company for the entire bill such as the case in packaged services.
Am I over thinking this?