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HMRC's failure to offer a clear definition of a tax professional could be detrimental to taxpayers who make innocent mistakes on their tax returns, UHY Hacker Young has claimed.
Under new rules, taxpayers will not be penalised if they take 'reasonable care' when completing their returns — but the taxman defines such care as taking advice from a tax specialist.
This, said Hacker Young, would exclude the majority of high street accountants, from whom most members of the public seek advice.
When UHY asked HMRC for a definition of 'tax professional', the department replied it 'cannot and do not specify that an adviser should have certain qualifications. That is for the taxpayer to consider when choosing who to seek advice from.'
Hacker Young tax partner Roy Maugham said the Revenue's stance is 'unrealistic'.
'HMRC seem to be suggesting that the taxpayer should be in a position to determine whether the accountant is… experienced enough in tax matters to handle affairs without making a mistake,' he remarked.
Hacker Young also pointed out that not only does the Revenue require the taxpayer to instruct a tax professional, but it also demands that people find experts with very specific experience.
For example, if a calculation involves the valuation of a property, clients must ensure that their tax accountant is 'competent' in dealing with property issues.
Hacker Young VAT partner Simon Newark remarked that this could prove to be 'a real problem for taxpayers [who]… want to employ a small high street accountancy firm or a sole practitioner'.
