HMRC to raise standard of conduct among tax advisers

Pedro Gonçalves
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HMRC to raise standard of conduct among tax advisers

The HMRC is set to raise standards among tax advisers after an independent review slammed the "reprehensible" behaviour of some professionals.

In an independent review of the loan charge, Sir Amyas Morse, the former head of the National Audit Office, concluded the schemes were a form of tax avoidance but made a series of recommendations about the design of the charge and its impact on those in its scope.

The review into the loan charge criticised the conduct of promoters and professional advisers who are continuing to sell loan schemes, despite knowing they will not deliver the tax benefits promised.

Bad advice is not only harmful to the tax system, it damages taxpayers who often find they have no effective remedy against it"

Sir Amyas' investigation added: "While the review has set out its position that responsibility for tax affairs must ultimately rest with the individual, it is to be expected that people will want expert advice on their tax affairs, and will turn to professionals for that advice.

Tactics used by promoters included misrepresenting the DOTAS (disclosure of tax avoidance schemes) system to claim that schemes had been approved by HMRC, or providing opinions from Queen's Counsel suggesting that HMRC would be unsuccessful if they tried to claim the tax.

The government has confirmed that it will implement all but one of the recommendations made by Sir Amyas Morse in his review of the loan charge rules. The legislation will have effect retrospectively to 5 April 2019, which is the relevant date for the purposes of applying the loan charge.

A HMRC spokesman told The Yorkshire Post: "The call for evidence is open to the public and we are particularly interested in hearing from anyone who provides or receives tax advice or services.

"The aim is to gather evidence, expertise and opinions on improving standards which will help us decide the best way forward on this matter.

"We will be giving thorough consideration to the evidence presented to us, which will help us assess the range of options for improving standards.

The spokesperson said: "We are seeking views on what can be done to raise the standards, ethics and behaviours of those who provide tax advice and services.

"We recognise that the majority of people who provide tax advice are professional and provide valuable support to taxpayers, which also benefits HMRC.

He added: "We also know that some tax advisers do not act professionally.

"This may be because they're not qualified or lack expertise, and for some it's deliberate dishonesty, such as knowingly promoting tax avoidance schemes and misleading their clients.

"Bad advice is not only harmful to the tax system, it damages taxpayers who often find they have no effective remedy against it."

HMRC has also said it is not currently increasing its staff recruitment, despite being burdened with a number of new responsibilities as part of the government's plan to help businesses and the self-employed through covid-19.

 

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