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Regulation in the tax industry
The feedback on page 20 from Heather Self and Dan Neidle on the background to the Advertising Standards Authority (ASA) ruling on the CDP Tax and Wealth (trading as Fiducia Wealth and Tax) stamp duty land tax arrangement raises important issues on consumer protection in taxation. As tax practitioners, we operate in what historically has been an unregulated environment with professional judgement being the sole check on the way we do businesses. There are some powerful voices in our profession who would argue strongly that this is still the most effective way of ensuring the highest standards and protecting the public. But, as the ASA ruling shows, there are different ways in which that professional judgement can be exercised. The key question for tax professionals is not so much about the efficacy of an arrangement as the way that it is explained to clients, in particular the true level of risk. The approach set out in Professional Conduct in Relation to Taxation is deliberately focused on behaviours rather than outcomes.
We are moving ever closer to regulation of our profession on a piecemeal basis without any overarching framework. In my view, it would be better to seize the initiative and for the profession as a whole to take a serious look at what regulation of the tax industry might look like. The red line on which I would insist is that HMRC would not be the regulatory body. Indeed, if there were to be regulation in tax, HMRC would need in some way to be brought into the same regulatory regime. I would like to be part of a profession that operates to the highest possible standards and commands the confidence of the public. I am sure that all of those working in HMRC feel the same way.
If you do one thing…
Read the updated guidance on missing trader fraud on the HMRC website (tinyurl.com/pket2sr). Fraudsters are known to use the services of reputable accountants to add credibility to their activities. Have you recently trained your staff about what to look for when taking on new clients to ensure you do not inadvertently become caught up with a fraudster?
Andrew Hubbard
