Threats to principles
Self interest - professional competence
Self review - integrity
Familiarity - confidentiality
Intimidation - Objectivity
Advocacy- professional behaviour
Conflict of interest
Notify all relevant parties
Obtain consent from relevant parties
Use separate engagement teams
Secure data filing
Confidentiality agreements signed by staff
Must not work on clients during and immediately after secondment to HMRC
Client procedures
Ensure relevant skills to undertake work
Client due diligence (CDD) based on risk
- Engagement letter sets out scope of client /advisors responsibilities :
- client responsible for their tax; advisor calculates based on information provided
- should include authority to disclose HMRC errors
Errors
Check engagement letter to see if authority to disclose to HMRC
Ask client permission to disclose if no authority in engagement letter
Advise client of potential penalties, interest and criminal proceedings
If permission refused: cease to act and notify HMRC that no longer acting for client
Consider if report should be made to MLRO
Money laundering
Tax evasion is a criminal offence so the proceeds are from a crime
Advisor must report to MLRO if reasonable grounds for suspicion
MLRO decides whether a report should be made to NCA
Disclose confidential information without client consent
Defences for failing to report
No suspicion
Threat to safety
Offences occurred outside of UK
Privileged reporting exemption when giving legal advice
Procedures for money laundering
Register with ICAEW
Appoint MLRO
Train staff
Internal procedures
CDD
Professional indemnity insurance
Gross fee income < £600,000 : P11 is 2.5 times income (£100k minimum)
Gross fee income > P11 is £1.5m minimum
Maintain for 2 years after retirement
Data protection
GDPR for personal data
Data security : passwords changed every three months, suspicious activity reported
Data protection officer (DPO) should be appointed
Breaches should be notified to the DPO
DPO should notify ICO within 72 hours
Affected individuals should be notified of the breach
Professional conduct in relation to taxation
Client specific - tailored to specific facts, not mass marketed schemes
Lawful- highlight areas where law is uncertain
Disclosure and transparency-HMRC must have relevant facts
Tax planning arrangements- must not be :
- Contrary to what parliament intended
- highly artificial or contrived
Profesional judgement and appropriate documentation
Planning avoidance evasion
Planning :
- Legal
- Using reliefs as intended
- uncontroversial
- eg pension contributions, ISA, BADR claim
Avoidance
- legal
- taking advantage of unintended loopholes
- often challenged by HMRC in courts
- uses artificial transactions
Evasion
- Illegal
- Misleading HMRC
- Criminal finances act offences for businesses failing to prevent tax evasion
- Understating income/gains
- overstating expenses/losses
- not filing returns
