The Association of Taxation Technicians (ATT) has welcomed today’s publication by HMRC of a thought-provoking call for evidence1 on raising standards in the tax advice market.
The Government promised this call for evidence in its response2 to the independent review of the loan charge but the ATT, along with other professional bodies, had already been working with HMRC on the issue of regulation of tax services.
Jeremy Coker, President of the ATT, said:
“We welcome this call for evidence which poses some very thought-provoking questions. What is the distinction between tax advice and tax services? What are the characteristics of good and bad tax advice? How can consumers be best protected from poor advice?
“It offers the opportunity to tackle a wide range of issues, central to which are the professional standards that can rightly be expected of tax advisers by their clients, HMRC and the public as a whole. ATT members – like members of similar professional bodies - are required to comply with a set of strong and enforceable professional rules. Those govern obligations both to a member’s clients and to the wider society. That seems to us to be the right starting point but a lot of work will be needed to identify a route which brings all tax advisers up to acceptable common standards and ensures that those standards are rigorously enforced.
“We are very keen to work with other professional bodies and HMRC. A particular challenge will be how to design pathways which enable tax advisers who are not currently members of any professional body to progress to membership. It will also be essential to strengthen consumer rights of redress. The loan charge review identified that users of loan schemes had often trusted their advisers when they were told that they would not have to pay tax on their loans. There must be no place in the tax profession for those who devise, promote or sell tax avoidance schemes. Clients who unwittingly follow misleading advice must have clear and enforceable rights of redress against their misleading advisers.”
The call for evidence recognises a whole range of differences in the tax advice market – who the advisers are, whether they are being paid, whether they are members of a professional body, the nature of the service being provided and so on. It identifies six options for consideration.3
Jeremy Coker said:
“The HMRC paper recognises that the six options set out are not mutually exclusive. That seems very sensible. The wide range of differences in the tax services market explains why no single, simple quick-fix route to raising standards has been - or ever could be - identified. It also explains why a range of different solutions is required. The ATT looks forward to playing a leading role in identifying which routes to raising standards merit more detailed public consultation.”
Notes for editors
1. The HMRC call for evidence Raising standards in the tax advice market is available here.
2. The Treasury response to the Independent Loan Charge Review is available here . Section 2.49 of the response says: “Furthermore, the Government will consider carefully the wider implications of the Review for the market for tax advice. The Government will launch a call for evidence on what steps it can take to raise standards in this market to give taxpayers more assurance that the advice they are receiving is reliable.
3. The six options identified in the HMRC paper are:
A. Better use of existing HMRC/government powers
B. Improve consumer rights of redress
C. Improve transparency – helping consumers to make better choices
D. Penalties for tax advisers
E. Maximising the regulatory/supervisory role of the professional bodies
F. External regulation requiring registration of tax advisers with a statutory body.