Accountant Disengagement Letter (Gibraltar Template)

A cut-off date per service, because CT1 and the accounts filing don't share a clock

The practice may have filed the CT1 return for the last accounting period, prepared last year's annual accounts, run the final payroll cycle, and be mid-way through a bookkeeping period. "The engagement ends immediately" leaves every one of those threads open — and the mismatch in Gibraltar is unusually sharp because the two statutory clocks run on genuinely different lengths from different starting points.

The CT1 return is due nine months after the end of the month in which the accounting period ends; annual accounts are due to Companies House thirteen months after the financial year end. A letter that states one termination date for "tax and accounts" together obscures which of two different registrars, with two different deadlines, still needs a filing — and from whom.

The template asks, for each service ticked, for two pieces of information: the last period actually handled and the date of filing or delivery. Each service writes its own cut-off date with an explicit note that later periods are not covered, and a separate section lists the deadlines that fall after the cut-off.

There is no VAT to hand over — don't invent a clause for it

A disengagement letter adapted from a UK or EU template will often include a line about the final VAT return or de-registration. Gibraltar has no VAT system, so there is nothing of that kind to hand over, and including such a clause introduces a false obligation into an otherwise accurate document.

What does need to be handed over instead is the corporate tax position: the CT1 filing history, the current accounting period's status, and the authority to act with the Income Tax Office going forward. The template's tax section reflects that substitution directly rather than relabelling a VAT clause.

Records, access, and the six-year floor

The retention obligation sits with the company, not the practice, and a change of accountant does not alter it. Accounting records must be kept for at least six years, sufficient to demonstrate the company's financial position and track all underlying transactions.

When the records are electronic, the decisive question is access. If the subscription to the bookkeeping system is held in the outgoing practice's name, its lapse can cut off access to records the company is legally obliged to retain and, if required, produce. This is the worst possible combination, and it usually surfaces only months later.

The letter has a dedicated section for this: which files are handed over and in what format, whose name the subscription is in, and what happens to access to historical data.

Handover of records, suspension of work, and confidentiality

Records the client supplied are the client's property and are returned. The practice's own working papers, calculations and internal notes remain the practice's property. Deliverables the client has paid for belong to the client. A single sentence in which the practice claims the whole "file" gets all three of these points wrong.

On non-payment, the right tool is to suspend work after notice, not to withhold records. The client's own records are not security for a fee, and withholding them just as a CT1 or accounts deadline approaches moves the argument onto ground where the practice cannot win.

Confidentiality continues after termination. Handing information to the incoming accountant therefore requires the client's consent, and the acknowledgement at the end of this letter obtains it. A signed copy is far more durable months later than the memory of a phone call. The incoming practice's own client due diligence under anti-money laundering rules is its own separate obligation and does not transfer with the engagement.

Clauses explained

Direction of the letter

Termination by the client, or ending by the practice. All differing clauses — reason, requests, consents, signatures — switch automatically.

Reason and termination date

States which engagement is ending, the agreed notice period, and the termination date that follows from it.

Method of termination

Termination on the date, or termination once expressly listed outstanding work is completed. The second option opens a list field — the only way to commit to completion without contradicting the termination date.

Services and cut-off date for each

One toggle per service — annual accounts, CT1, payroll, bookkeeping, company secretarial filings — each with the last period handled, the filing date, and the note that later periods are not covered.

Upcoming deadlines

What falls due after the cut-off date and with whom it now sits, with a note that the incoming practice should carry out its own review of deadlines.

Records, systems and retention

Which files are handed over and in what format, whose name the subscription is in, and what happens to access to historical data, alongside the six-year retention floor.

Handover of records

Return of the client's records, the practice's working papers as its own property, a collection period, and notice before disposal.

Outstanding fees (optional)

Amount and payment term, with suspension of work as the tool rather than withholding the client's records, in its own section.

Handover and waiver of confidentiality

Written consent to speak with the incoming practice, with a note that its own client due diligence is its own obligation.

Confidentiality, liability and governing law

Confidentiality continues, agreed liability limits still apply to work already performed, Gibraltar law.

Recipient's acknowledgement

Signature block that turns the consent and the cut-off dates into an agreement rather than a one-sided statement.

What not to overlook

Check the engagement letter and current guidance before sending.

• Set a cut-off date per service, not one date for everything

  The CT1 corporate tax return is due nine months after the end of the accounting-period month, while annual accounts are due to Companies House thirteen months after the financial year end. A letter that states one termination date for both obscures which registrar still needs a filing.

  Gibraltar Income Tax Office — Guidance Notes for Companies

• Don't include a VAT hand-over clause

  Gibraltar has no VAT system, so there is no final VAT return or de-registration to hand over. A disengagement letter adapted from a UK or EU template should drop that clause entirely rather than relabel it.

• Clarify whose name the bookkeeping system subscription is in

  If the electronic records system is subscribed in the outgoing practice's name, its lapse can cut off access to records the company is legally obliged to retain for at least six years and to produce if required. The letter should state which files are handed over, in what format, and what happens to historical access.

• Keep the six-year retention obligation with the company

  Accounting records must be retained for at least six years regardless of a change of accountant. A short collection period for the outgoing practice's own copies is not a reason to destroy anything the company itself must still keep.

  Gibraltar Corporate Obligations guidance

• Don't withhold records instead of suspending work

  On non-payment, the correct tool is to suspend work after notice. Records the client supplied are the client's property, and withholding them just before a CT1 or accounts deadline moves a fee dispute onto ground where the practice cannot win. The practice's own working papers remain its property regardless.

• Obtain consent to the handover in writing

  Confidentiality continues after termination, so handing information to the incoming practice requires the client's consent; the acknowledgement at the end of this letter is designed for exactly that. The incoming practice's own client due diligence under anti-money laundering rules is its own obligation and does not transfer.

How to write the letter

1. Choose the direction. Termination by the client, or ending by the practice. This decides the reason, requests and consents.
2. Read the engagement letter first. Note the date and the agreed notice period, so the termination date is correct rather than just the date of this letter.
3. Fill in the parties and the method of termination. Sender, recipient, date, reference, and termination on the date or after completion of listed outstanding work.
4. Set a cut-off date per service. The last period handled and the filing date for each service. Then list the deadlines that fall due later.
5. Sort out records, systems and access. Which files are handed over, whose name the subscription is in, and what happens to access to historical data.
6. Send and keep the signed acknowledgement. Download as Word or PDF, send with a request for signature, and keep the acknowledgement — it's the consent that makes the handover possible.

Frequently asked questions

Related templates

• Accountant's Terms of Business (Gibraltar Template)