Contracts
The ten clauses in an engagement letter that decide what you pay, who carries the risk and how you leave, each with a sample clause written for this guide, a plain English reading and what to look for.
This page explains a common clause in general terms. It is not legal advice, and contract law differs between countries. Ask a lawyer to review your own engagement letter.
An engagement letter is where the proposal becomes the deal. The headline percentage is the line you will read first. Read the others as closely. They decide what that percentage applies to, what happens if the claim is reduced, who helps with a review, what ending costs and who keeps the records.
Each page here takes one clause. It shows a sample clause written for this guide, in neutral wording and not taken from any real firm's terms, with numbered notes on each part. It then says what the clause means in plain English, what a fair version and a less fair version look like, and which questions to ask. Each page links to the script that puts the question in writing.
How to use these pages
Read your own letter with these pages beside it. Where your letter is silent on a point, that is worth asking about: you do not yet know what applies, and a lawyer in your country can tell you. Where your letter says something different from the sample, that is not a problem in itself. The question is whether you understand it and can live with it.
- Fee basisThe clause that says what you pay and what the fee is worked out on. If you cannot calculate the fee from this clause and your own figures, ask for it to be rewritten until you can.
- What counts as the benefitThe definition that decides what a percentage fee is a percentage of. Cash, a reduction in tax, a loss carried forward and the amount claimed are different numbers, and the letter chooses one.
- Review and audit supportThe clause that says who helps if the tax authority asks questions, what the help covers, for how long and at what cost. Help is not the same as paying any tax that becomes due.
- Fee refund if the claim is reducedThe clause that says what happens to the fee you have already paid if the tax authority reduces the claim. Without it, nothing in the letter brings the fee down while you repay the difference.
- Termination and exit feesThe clause that says how either side can end the engagement, what is owed when it ends, and what happens to a claim in progress. It decides whether leaving is a notice period or a bill.
- Ownership of records and workThe clause that says who owns the claim file: your records, the technical report, the calculations and the working papers. It decides whether you can defend the claim, or move it, without the adviser.
- Liability and indemnityThe clause that limits what you can recover from the adviser if something goes wrong, and what you promise to cover for them. Read it with the review and refund clauses: together they say who carries the risk.
- Who signs the claimThe clause that says whose name goes on the claim, who approves the final version and whether the adviser is named where the form asks. It is where responsibility for the claim is written down.
- ConfidentialityThe clause that says what the adviser may do with your technical and financial information: who they can pass it to, what they can say about you, and for how long the promise lasts.
- Multi-year and renewal termsThe clause that says how long the engagement runs, whether it renews by itself and what you owe for a year in which you do not claim. It is easy to miss and expensive to get wrong.
KnowYourFees.org is published by Swanson Reed, an R&D tax advisory firm that competes with other advisers. This site does not recommend any adviser, including Swanson Reed.
© 2026 Swanson Reed. You may use the templates and checklists for your own business. Official material is used under the terms set by its publisher.