DISCIPLINARY PROCEEDINGS AGAINST TAX ADVISERS
TAX PLANNING AND TAX ADVISERS
Tax advisers must be particularly vigilant to ensure that the tax advice they give correctly falls within the ambit of the applicable legislation as to the scope of any tax liability, any exception to such a liability, including the availability of any applicable relief, such as capital allowances, expenditure in calculating trading profits or chargeable capital gains.
The regulation of tax professionals is designed to ensure that only tax mitigation is adopted by clients and not unlawful tax avoidance (to the extent it is regarded as not being within the spirit of the tax legislation).
As a tax adviser, if you provide advice on matters which trespass into the category of tax avoidance then you must ensure that your advice is clear as to why the tax legislation operates in the way which is being advised on to the particular facts/transaction, and to identify why, as a matter of statutory interpretation, the rules apply to give the tax result which is being advised on.
Enquiries are usually opened for one of two reasons:
Tax enquiry for cause, namely:
- There is something wrong on the face of the return that gives HMRC some cause for concern;
- HMRC has information from other sources that conflicts with what is shown on the return (e.g., information disclosed under a tax treaty, tip-off, ex-partner, trading platform);
Tax enquiry on a random basis:
- The taxpayer’s return is randomly selected for enquiry by an HMRC computer.
Tax advisers must comply with the following principles:
Meet the standards required by their governing professional body (e.g. the Professional Conduct in Relation to Taxation (PCRT) (see 200601 Professional_Conduct_in_Relation_to_Taxation_2019.pdf);
The PCRT has been produced by:
- Association of Accounting Technicians (AAT)
- Association of Chartered Certified Accountants (ACCA)
- Association of Taxation Technicians (ATT)
- Chartered Institute of Taxation (CIOT)
- Institute of Chartered Accountants in England and Wales (ICAEW)
- Institute of Chartered Accountants of Scotland (ICAS)
- Society of Trust and Estate Practitioners (STEP)
Adhere to the requirements of the law both as:
- to the efficacy of the tax advice given to a client; and
- to ensure that it is not negligent advice.
Broadly, the regulation of tax professionals has developed across each of the following areas:
- Legislative regulation of tax schemes or planning thereby controlling the scope of what any tax professional can advise a client to consider in order to mitigate tax.
- Court regulation of ‘tax schemes’ through the interpretation of tax legislation has effectively determined the limits of what a tax professional can advise a client to implement when advising on the scope of tax legislation and the interaction of tax reliefs and charges.
- General law, such as contract and tort law: each tax professional is subject to their contractual terms of engagement with a client as to the nature, content and quality of the advice to be provided, which generally ensures that a competent level of service is provided which does not fall below professional standards.
- Professional standards: each tax professional referred to in this book is the subject of minimum professional standards imposed by their governing body. Failure to comply with such rules may result in financial penalties, public admonishment or even expulsion (e.g. see the powers of The Taxation Disciplinary Board (Guidance for the Public | The Taxation Disciplinary Board (tax-board.org.uk))over tax professionals regulated by CIOT, ATT)
HOW TAX BARRISTER JULIAN HICKEY CAN HELP
Julian can help you by:
- Advising on the nature and scope of a tax adviser’s obligations (whether under tax law, contract, laws of negligence or professional rules such as PCRT);
- Advising on the validity of claims made in respect of a tax adviser (and the nature of any compensation);
- Advising on and representing a tax adviser in respect of complaints made to their professional body and/or representing the adviser before The Taxation Disciplinary Board Tribunal.
Julian is also the General Editor of the Law and Regulation of Tax Advisers published by Bloomsbury:
Law and Regulation of Tax Professionals: Julian Hickey: Bloomsbury Professional
Access specialist legal advice for tax professionals today. Call the clerks on 020 8148 8536